City declares war on renegade rentals

Sep. 3—Some cities are terrorized by deadly drugs, others by rampant crime.

In Scottsdale, with a population of 243,050, ranking seventh-largest in Arizona and 92nd in the country, the demon is represented by three letters:

STR.

That stands for short-term rentals, better known as "the Airbnb crowd."

Though VRBO and other companies list homes, condos and apartments for periods as short as one night, Airbnb is by far the giant of the bunch. A simple search on Airbnb for Labor Day weekend listings returned "Over 1,000 places in Scottsdale."

With many of the estimated 4,300 short-term rentals already booked, that means a laborious holiday weekend for Sgt. Eric Bolles, who heads the new Scottsdale Police Department task force dedicated to tracking short-term rentals.

Bolles, who was raised in Indianapolis and came here to play tennis at Arizona State University, will ultimately lead four officers — but he's a one-man band for now.

Hired in 2006, he worked on bike patrol units and covered downtown Scottsdale before asking to head the new task force.

"I was looking for a challenge," Bolles said.

He got it.

Bolles had hardly settled into his new position when he handled a riotous July 4 short-term rental party that ended with gunshots. While there were no injuries here, a deadly shooting at a Phoenix party was linked to the Scottdale party.

While the Phoenix homicide investigation continues, Scottsdale officers made one arrest and handed out citations to the Scottsdale homeowner and party promoter.

Leading up to Labor Day weekend, Bolles was investigating and preparing for a potential party storm.

"The strategy really is we've upped staff for the weekend. So it won't just be me," Bolles said a few days ago.

Without giving specifics, he said he has been using "investigative means" to find party promoters using social media to stage parties — which is how the July 4 party on East Kimsey Lane was advertised, he noted.

"We're really trying to crack down on (party promoters) and really send the message that Scottsdale is not going to tolerate that," Bolles said.

Using social media posts as evidence, Bolles was able to issue citations for illegal gatherings at short-term rentals before they even happened.

"Over the last few weekends, we've actually intercepted them — blocked them before they even got started."

Meanwhile, Bolles helped make sure the hyped "Scottsdale mansion parties" at short-term rentals never happened.

"One of our really good strategies is to call the emergency contact or the owner (of the rental) and say, 'Hey, do you know there's a giant party advertised this Friday at your house?'

"And they're like, 'Whoa, whoa, stop the presses.' And they will call (the renters) and say 'Your contract's terminated. We will not have this.'"

State laws allow private individuals — as well as conglomerates that are pouncing on STR profits — to rent dwellings with no minimum length of stay.

But cities now have a little more leverage, compared to when the Airbnb craze started.

At the end of 2022, a new state law allowed cities to demand short-term rental owners to be licensed with cities, with a one-time fee of up to $250.

Owners must have at least $500,000 worth of liability insurance, are required to notify their neighbors before offering their properties for short-term rentals — and can get their licenses suspended for up to a year if they are cited for three health, safety, noise, nuisance or other violations.

War on STRs?

The city seems to have a love-hate relationship with short-term rentals.

In a mass emailing titled "My Recent Accomplishments for Scottsdale," Councilwoman Tammy Caputi led off with:

"First, and most importantly, we've turned the tide on short-term rentals disrupting our neighborhoods. Nearly 90% of the STRs have applied for licenses, and nearly three-fourths are in compliance."

But, compared to Caputi's rosy outlook, Mayor David Ortega's view is dark and gloomy.

"Scottsdale neighborhoods have been shattered by short-term rentals, which are commercial businesses in residential zoned areas," Ortega said in a press release last week.

"Our residents are clamoring for peace and quiet, free from late-night disruptions and party house annoyances — we want our neighborhoods back."

At a July City Council meeting, Ortega delivered a soliloquy about STRs:

"There have been some tragedies (at) short-term rentals. There have been some shootings. There has been one of the largest drug busts in Arizona at a short-term rental in Scottsdale."

Ortega was referring to an incident in December that Scottsdale Police shared with the public two months later.

After cleaning crews at a short-term rental reported finding suspicious substances, Scottsdale officers identified 1.7 million fentanyl pills, 110 pounds of methamphetamine, 7.5 pounds of cocaine "and numerous weapons."

Months later, another disturbing holiday short-term rental incident shocked Scottsdale.

After gunshots and chaos rang out on a normally quiet street early July 5, Scottsdale officers arrested Tyreele Craig for discharging a firearm within city limits.

There were no injuries at the shooting, which took place at a party at a short-term rental on East Kimsey Lane near Hayden Road, not far from Vista del Camino Park in south Scottsdale.

At the July meeting, Ortega noted the Scottsdale STR party was linked to a deadly Phoenix shooting and demanded action — and his staff apparently jumped to it.

According to last week's news release, "The city has delivered three proposals aimed at curtailing the proliferation of short-term rentals to the Arizona League of Cities and Towns and is confident they will become part of the league's legislative agenda for the 2024 session of the Arizona Legislature."

Meanwhile, the city is empowering its residents with an "interactive tool (that) helps you understand the status of short-term rentals in your neighborhood and offers assistance in reporting violations."

At the Short-term Rental Resource Center website (str.scottsdaleaz.gov), residents can see STRs near them — and if the properties are licensed with the city, or rental renegades risking reprisals.

STR stats

According to Assistant City Manager Brent Stockwell, through July 31, 3,888 short-term rental applications were submitted, with 3,443 licenses approved.

In July, there were 38 applications received and 44 new licenses issued.

"Rentalscape currently estimates that there were 4,300 active short-term rentals, which means that 90% have applied, and 80% have received their licenses," Stockwell said.

He noted 29 code enforcement cases were opened for violations related to short-term rentals.

According to the city's quarterly STR report, "The Scottsdale Police Department Intelligence Unit continues to gather and analyze information related to short-term rentals being used to host events.

"It is anticipated additional officers will be added to our short-term rental team in the fall 2023 and spring 2024."

"The priority for nuisance party calls for service at short-term rentals was increased which will significantly shorten required response time to these parties," it adds.

In a recent victory for the city, Halekai Properties entered a guilty plea after being charged with operating a vacation rental at 2802 N. Granite Reef without a city rental license.

The fine was $1,000.

Bolles stressed that the great majority of rentals are peaceful and law-abiding.

Only a small percentage of the thousands of Airbnb and VRBO rentals each weekend lead to neighbor complaints, he said.

In July, police received 93 calls about "nuisance parties" — 59 of those were STRs.

Along with 40 short-term rental party warnings, "five cases were referred to the prosecutor for review for charging," according to the report.

The Progress asked Stockwell about trends in the city's Airbnb crowd.

"We have been watching the number of short-term rental properties decline month over month since the high of the Super Bowl — just as they had increased month over month up to that point," he said.

"We are trying to figure out if this is cyclical or a general trend."

Similarly, the assistant city manager is trying to figure out if the supply of STRs has peaked.

"Anecdotally," Stockwell said, "we have seen properties tell us they are getting out of the market and converting to long-term rentals or selling the properties.

"On the other hand, we are still seeing properties apply for licenses each month."

STRs = big money

While complaints from residents throw short-term rentals in the "hate" category, pulling STRs back to "love" is the bottom line.

According to the city's quarterly report, "In the third quarter of 2022-23 general revenues (privilege/sales tax and occupancy tax) collected from short-term rental activity totaled $5.4 million."

It notes that, from May 2022 to May 2023, the city took in $14.5 million in short-term rental tax money.

Coincidentally, that is almost exactly the estimated $14.7 million the city expects to lose after Gov. Katie Hobbs signed SB 1131, which prohibits cities from imposing residential rental sales tax.

The ban on long-term rental taxes begins January 2025.

As for the short-term scene, Bolles, for one, believes residents and the Airbnb crowd can get along — and not just from the point of view of a cop.

"I live in Scottsdale," Bolles said with a smile, "and I have a short-term rental behind me and another one across the street from me."

He knows every few weeks, social media will blow up with people howling "Airbnbs are ruining the city!"

But numbers put the STR situation in perspective, Bolles believes.

"There are over 4,000 registered short-term rentals in Scottsdale — and I'm sure you know, we find unregistered ones around so there's probably more than that," the STR task force leader said. "And the percentage of call volume relative to that is so low.

"That really means, overall, everyone's really doing a good job."