Phoenix City Council Approves New Regulations for Short-Term Rentals and Accessory Dwelling Units

📋 Overview

In response to Arizona's evolving housing landscape and state legislation, the Phoenix City Council has enacted new regulations affecting short-term rentals (STRs) and accessory dwelling units (ADUs). These measures aim to balance the city's housing needs with community concerns.

🏠 Short-Term Rental Regulations

Permit Requirement

As of November 6, 2023, all short-term rental properties in Phoenix must obtain a permit from the Planning and Development Department. This replaces the previous registration system. 

Application Process

• Timeline: The city must issue or deny a permit within 7 days of application.

• Appeals: Owners may appeal denials, non-renewals, or suspensions.

• Fees: An initial and renewal fee of $250 is required for each permit.

Operational Requirements

• Notification: Owners must send a Notice of Intent via certified mail to abutting neighbors and any registered homeowners associations within a 600-foot radius.

• Advertising: The STR permit/license number must be displayed on all advertisements.

• Insurance: Proof of liability insurance coverage of at least $500,000 is mandatory.

• Response Time: Operators must respond to police calls within one hour.

Prohibited Uses

• ADUs as STRs: The use of accessory dwelling units as short-term rentals is prohibited.

• Events: Hosting events such as parties or weddings in STRs is not allowed.

Enforcement and Penalties

• Violations: Penalties range from a minimum of $500 for the first violation to $3,500 for the third.

• Suspension: A permit may be suspended for 12 months if there are three court-adjudicated violations within a 12-month period or one conviction of a felony or other serious crime.

• Enforcement Agency: The Neighborhood Services Department is responsible for investigating unpermitted STRs and issuing violations. 

🏡 Accessory Dwelling Unit (ADU) Regulations

Permitted Units

In late 2024, the Phoenix City Council approved ordinance changes to comply with new state laws for ADUs: 

• Number of Units: Two ADUs are permitted per lot with a single-family home. A third ADU may be permitted on lots over one acre if at least one ADU is designated as affordable housing.

• Size: Each ADU may be up to 75% of the gross floor area of the main house, not to exceed 1,000 square feet for lots up to 10,000 square feet or 3,000 square feet for larger lots.

• Setbacks: Reduced to five feet where adjacent to a side property line.

• Design Review: ADUs no longer require matching the exterior design, roof pitch, or finishing materials of the primary dwelling.

Owner Occupancy

If an ADU is used as a short-term rental, the city may require owner occupancy of either the main house or the ADU to address concerns about out-of-state investors and neighborhood nuisances.

🏘️ Community Impact and Considerations

These regulatory changes aim to increase housing options and affordability in Phoenix while addressing community concerns about neighborhood character and infrastructure strain. The city encourages residents to stay informed and participate in local planning discussions.

🔍 Resources and Contact Information

• Short-Term Rental Permits: City of Phoenix STR Registry

• ADU Guidelines: City of Phoenix ADU Information

• Planning and Development Department: For questions about STR or ADU regulations, contact the Planning and Development Department at 602-262-7811 or visit their website.