Sedona tackles affordable housing by offering incentives to short-term rental owners

With the Rent Local Program, homeowners who already rent their properties on Airbnb or VRBO can receive between $3,000-$10,000 from the city.
Published: Aug. 11, 2022 at 5:27 PM MST

SEDONA, AZ (3TV/CBS 5) -- Sedona City Council approved to allocate $240,000 to the new “Rent Local Program” in hopes short-term rental owners will instead lease their units or properties to local workers.

“We studied what some other sort of tourist towns have done to address the problems. Several cities and towns in Colorado, California and Montana have tried this,” said Shannon Boone, the Housing Manager. “Just as an example, Big Sky was able to create 30 housing units in three months, which is rapid when you consider how long it takes to construct housing.”

City officials say apartments only make up about 4% of the housing stock in Sedona, whereas short-term rentals make up about 15%. “Over the last five years, we’ve seen tourism increase as many as short term rentals as we can provide. So we ‘re actually experiencing other problems like traffic and environmental degradation as a result of the heavy tourism,” Boone said.

Because there is a lack of affordable housing in Sedona, the majority of the local workers commute from other parts of Verde Valley or unincorporated parts of the county. “We know that there are several homeless people in our workforce currently. Our employers tell us regularly, ‘we have a couple employees living in their cars. What are you doing about housing?’” Boone said. We want our workforce to be able to live here; we want to have full-time, year-round residents.”

An employee at Sedona Crepes says she and her coworkers all commute from Cottonwood, but she’s been trying to find a house in Sedona with no luck. “It would mean a lot honestly because like gas is super expensive now, so putting a bunch of miles on my car, doing a bunch of oil changes and this and that, it would help a lot,” Valeria Lara said. “The housing units in Sedona are super expensive so I’ve been trying to look for something out of town that’s a little less but even there it’s super expensive now.”

With the Rent Local Program, homeowners who already rent their properties on Airbnb or VRBO can receive between $3,000-$10,000 from the city. “The homeowner is still allowed to charge a fair market rent and lease to who they want to so in addition to the rental income they get, they get the incentive,” Boone explained.

However, Boone says they know this might not work for every homeowner. “We know that this program isn’t for everyone. We know some people are making $30,000 a month on their short term rental and we don’t expect a $10,000 incentive to compare,” Boone said. “It’s really to get a small number of units. It would be most appealing to people who are not as successful as a short term rental or who just don’t want to invest the time or energy.”

Boone said they’ve already received interest from some homeowners. However, since it is a pilot program, it is currently only open to homeowners already operating as short-term rentals. The Rent Local Program will begin accepting applications on September 1st.