Turn your backyard shed into a rental house if a new Phoenix code passes

Some fear the proposal would allow corporations using AirBnB or Vrbo to worsen the housing market by making homes even more expensive.
Published: Jul. 5, 2023 at 10:49 PM MST
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PHOENIX (3TV/CBS 5) — If you have a shed in your backyard, you might be able to spruce it up and turn it into a rental home.

The City of Phoenix is proposing an ordinance that would allow in-law suites in backyards. The proposal is meant for families to make some extra cash by renting a small unit on their property to an in-law, a grown child or even a stranger. “We are going through a significant housing shortage and adu’s are a low-hanging fruit solution to this issue,” Phoenix Vice Mayor Yassamin Ansari said.

Accessory dwelling units, or ADUs, are secondary housing units on a single-family lot. You might know them as casitas, granny flats or guest houses, and they could be coming to Phoenix. “This idea has been in the works for several years now,” she said.

She says the goal is to provide renters access to affordable housing within city limits. “If the amendment passes as is, it means that anyone who owns a single-family home anywhere in the city of phoenix can build an accessory dwelling unit in their backyard,” she said

Right now, city laws allow storage units, but not all areas allow plumbing or running water. This ordinance would change that, making the spaces liveable.

“This ordinance within the City of Phoenix is a perfect example of why the state needs to return local control of short term rentals to cities and towns in Arizona,” said Kate Bauer, co-found of Arizona Neighborhood Alliance

Bauer says she’s scared this could create more harm than good. “We’re concerned about these turning into short-term rentals and that it won’t help the housing problem at all,” she said.

Bauer says what has really contributed to the lack of affordable housing in Phoenix is short-term rentals, like Airbnb and VRBOs. “I do believe that the ADUs could be very helpful. I absolutely do. it’s just that the cities don’t have the ability to put any sort of cap on short-term rentals,” she said.

According to state law, cities cannot prohibit or ban short-term rentals and she’s fearful some will take advantage of the ordinance to make a profit.

“The city is doing everything that it can to minimize that case through the permitting process,” said Ansari.

There are some requirements to do this: The city says you will need a special permit to build or rent an ADU, they can only be on single-family lots, and the owner has to live in the main house full time. The council is expected to vote on this in early September, and the proposal could change before then.

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