The recommended Council action will amend the Goodyear City Code of Ordinances to establish Short-Term Rental (STR) regulations as a new Article 8-2 of Chapter 8 Business Regulations, in order to comply with SB 1168 which will become effective as a new State law on September 24, 2022.

1. ADOPT RESOLUTION NO. 2022-2266 DECLARING A PUBLIC RECORD THAT CERTAIN DOCUMENT FILED WITH THE CITY CLERK AND TITLED “AMENDMENT TO CHAPTER 8 OF THE CITY OF GOODYEAR CODE OF ORDINANCES TO ESTABLISH A NEW ARTICLE 8-2 ENTITLED SHORT-TERM RENTALS (STRS),” AND ESTABLISHING AN ANNUAL STR LICENSE FEE IN LIEU OF A BUSINESS LICENSE FEE.

2. ADOPT ORDINANCE NO. 2022-1555 AMENDING CHAPTER 8 OF THE CITY OF GOODYEAR CODE OF ORDINANCES TO ESTABLISH A NEW ARTICLE 8-2 ENTITLED SHORT-TERM RENTALS (“STRS”); PROVIDING FOR CORRECTIONS; SEVERABILITY; PENALTIES; AND AN EFFECTIVE DATE. (Jay Karlovich, Assistant City Attorney)

There is no anticipated fiscal impact on the City for FY2023 or future years with the adoption of this new provision. The new annual STR license fee will be charged in lieu of a business license fee and shall be commensurate with the cost to administer and issue STR licenses.

In 2016, the Arizona Legislature passed its initial STR law which essentially preempted municipalities from regulating or restricting STRs, with the exception of enforcing public health and safety regulations.

In 2019, the Arizona Legislature passed a revised STR law requiring STR owners to include a lodging tax license number in advertisements and prohibiting STRs from hosting non-residential uses/events. This revised law also allowed cities to require STR owners to provide contact information for someone who can respond to complaints about the STR in a timely manner.

On February 28, 2022, City staff introduced a draft STR Ordinance which included:

• A requirement for a 1-hour Emergency Contact Response;
• A requirement for a 24-hour Complaint Contact Response;
• A requirement for STRs to comply with public health, safety, Sanitation, property tax registration, and property maintenance laws; and
• A requirement that STRs not be used for non-residential uses.
• A requirement that STRs may not be used to house sex offenders, operate, or maintain a sober living home, sell illegal drugs, and liquor or allow adult-oriented business activities.

The City paused the STR ordinance effort since the 2022 State legislature began passing bills to overhaul the State's STR law. On July 6, 2022, the Governor signed a new revised STR law that will become legally effective on September 24, 2022.

This new STR law allows for:

• Permitting or License Regulation Process
• Emergency Contact Requirements and Penalties
• Neighborhood Notification
• Verified Violations and Penalties
• License/Permit Suspension up to 12 months if needed
• Sex Offender Background Checks
• Liability Insurance Requirements
• License Number Displayed on Advertisements

As Goodyear continues to grow, the number of short-term rentals (STRs) listed on online platforms such as Vacation Rental by Owner (VRBO) and Air Bed & Breakfast (Airbnb) will continually increase. At a July 18, 2022 work session, city staff presented Council with the new legislative provisions for STRs that will become effective on September 24, 2022. Council provided direction and recommended that staff prepare a new draft STR Ordinance that complies with the new state STR law and the allowable provisions.

The new Article 8-2 attached as Exhibit A to Resolution No. 2022-2266 complies with the new state STR law and includes the following provisions and requirements:

• Required License Registration
• Emergency Contact Requirements and Penalties
• Neighborhood Notification
• Verified Violations and Penalties
• License Suspension Process (for up to 12 months)
• Required Sex Offender Background Checks (by the STR Owner or by an Online Marketplace)
• $500,000 Liability Insurance Coverage Requirements (provided by the STR Owner or by an Online Marketplace)
• Required City STR License Number Displayed on Advertisements

It is in the best interests of the City and the residents of Goodyear for the City to establish STR regulations and recommends the adoption of Ordinance No. 2022-1555 to establish Article 8-2 of the Goodyear City Code of Ordinances.