Short-Term Rental Regulations in Tempe

This article serves as a comprehensive guide for property owners who need to navigate the new short-term rental regulations in Tempe effectively. From obtaining the necessary Tempe Short-Term Rental License with its associated fees to adhering to strict community, safety, and tax compliance standards, this guide offers essential insights into what is expected of short-term rental operators in Tempe, ensuring they conduct their rental activities responsibly and in accordance with city laws.

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Why Tempe is a Great Place to Invest in Airbnb

Tempe, Arizona, stands out as a prime location for investing in Airbnb properties due to its vibrant community, thriving economy, and appealing attractions that draw a consistent flow of visitors. Below are several compelling reasons why Tempe is an ideal choice for Airbnb investments:

University-Driven Demand: Home to Arizona State University, one of the largest public universities in the United States by enrollment, Tempe experiences a steady demand for short-term rental properties. Visitors include not only prospective students and their families but also guest lecturers, alumni, and attendees of university-related events.

Robust Tourism Sector: Tempe is rich in cultural and recreational attractions, including Tempe Town Lake, the Tempe Center for the Arts, and a bustling downtown area filled with shops, cafes, and restaurants. The city also hosts numerous festivals and events throughout the year, such as the Tempe Festival of the Arts and Ironman Arizona, which attract both domestic and international tourists.

Business Hub: With a growing business community that includes major corporations and an expanding startup ecosystem, Tempe attracts business travelers in addition to leisure visitors. This makes it a strong market for Airbnb rentals, particularly those that cater to professionals looking for convenient, short-term accommodations.

Public Transportation and Accessibility: The city boasts excellent public transportation options, including light rail connections that make it easy to explore the wider Phoenix metropolitan area. This connectivity is a significant draw for tourists who prefer to travel without a car and rely on public transit to navigate around their destination.

Favorable Climate: Tempe enjoys a warm climate year-round, which is ideal for travelers from colder regions looking for winter getaways. The city’s weather is particularly appealing for outdoor activities, enhancing its attractiveness as a vacation destination.

Community and Lifestyle: Tempe is known for its vibrant lifestyle and community-oriented atmosphere, which is highly appealing to visitors. The city’s focus on arts, education, and sustainability creates a welcoming environment that enhances guests’ experiences, making them more likely to return or recommend the area to others.

Investing in Airbnb properties in Tempe offers a unique opportunity to capitalize on these diverse attractions and demands. The combination of a large student population, a regular influx of business travelers, a rich cultural scene, and supportive local policies creates fertile ground for short-term rental investments, promising both high occupancy rates and the potential for appreciable returns.

Overview of the Updated Short-Term Rental Regulations in Tempe

Effective March 6, 2023, the City of Tempe has introduced new regulatory measures for short-term rental properties. These changes aim to balance the rights of property owners with the need to maintain public health, safety, and peace within the community. Below is a detailed guide to understanding these new requirements.

Obtaining a Tempe Short-Term Rental License

Owners are required to secure a Tempe Short-Term Rental License for each property or unit they wish to rent out short-term. This license comes with an annual fee of $250. The fee is non-refundable and is utilized entirely to manage the costs associated with the licensing of these properties. The application must include the owner’s contact details and, if applicable, the details of the property management entity. It should also contain the contact information for an emergency point of contact, available 24/7.

Tax and Registration Compliance

Every short-term rental property must be registered with the Maricopa County Assessor’s Office, and owners must provide proof of a valid sales tax license. It’s mandatory to include the license number in all property advertisements to ensure transparency and regulatory compliance.

Community Relations and Emergency Contact Information

Property owners must notify all residential properties in close proximity—adjacent to, directly across, and diagonally opposite—the rental property. This includes providing them with emergency contact information. The designated contact must be able to respond to emergencies within 30 minutes and to other issues within 24 hours.

In addition to notifying neighbors of emergency contact details, if the property is in a multi-residential building, all units on the same floor must be informed. This notice should include the rental’s license number, the physical address, and the emergency contact’s details.

Insurance Requirements

Owners need to maintain liability insurance coverage of at least $500,000. Alternatively, proof that the rental transaction will be insured through an online lodging marketplace that offers equal or greater coverage can be provided.

Safety Measures: Sex Offender Background Check

A mandatory sex offender background check is required for the person booking the rental. This check must be carried out using the U.S. Department of Justice’s online national sex offender public website. Records of these checks must be retained for 12 months post-booking.

Transaction Privilege Tax (TPT) and Lodging Tax Compliance

Owners must register for a TPT license through the Arizona Department of Revenue, regardless of whether the property is self-managed or handled through a property management company. Short-term rental properties are subject to a transaction privilege tax of 1.8% and a transient lodging tax of 5.0%, with the total effective tax rate combining local and county taxes amounting to 14.07%.

Compliance and Enforcement

Failure to adhere to Tempe’s short-term rental regulations can lead to significant fines, and persistent violations may result in the suspension of the short-term rental license. The city is committed to ensuring that rental activities do not disturb local communities and that safety standards are upheld.

Penalties

Licensing Non-Compliance: Not securing a Tempe Short-Term Rental License for each rental property in Tempe can lead to a penalty of up to $1,000 per month for each property.

Emergency Contact Information: Failure to provide adequate emergency contact information for each rental property also carries a penalty of up to $1,000 per month.

License Suspension: For recurring breaches of the rental ordinance, licenses may be suspended for up to 12 months.

For specific violations within a 12-month period, the penalties are structured as follows:

First Violation: A penalty of up to $500 or an amount equal to one night’s rent of the short-term rental, whichever is greater.

Second Violation: A penalty of up to $1,000 or an amount equal to two nights’ rent of the short-term rental, whichever is greater.

Third and Subsequent Violations: A penalty of up to $3,500 or an amount equal to three nights’ rent of the short-term rental, whichever is greater.

Compliance & Enforcement Technology

Tempe Tax & License employs technology to identify properties listed on online lodging marketplace websites. This system is capable of detecting property owners, parcels, booking dates, and revenues from short-term rental properties in Tempe. The audit and collections staff of Tempe Tax & License are actively monitoring these properties. They may contact owners to ensure compliance, and new licenses issued may include accrued penalty fees due to non-compliance. This proactive approach helps maintain the integrity of residential areas and ensures that all short-term rental operations contribute positively to the community while adhering to established legal frameworks.

Review and Processing Timeframes

The City will decide on the license application within seven business days after receiving a complete application. Licenses may be denied for reasons such as incomplete information, non-payment of the fee, or if the applicant has been convicted of serious offenses.

These updated regulations by the City of Tempe reflect a comprehensive approach to managing short-term rentals, emphasizing safety, community welfare, and operational transparency. Property owners engaging in short-term rental activities are encouraged to thoroughly understand and comply with these regulations to ensure smooth operations and good community relations.

Tempe Homeowners Associations and Condo Boards

In Tempe, Arizona, Homeowners Associations (HOAs) and Condo Boards play a critical role in managing residential communities and condominiums. These organizations are tasked with enforcing community rules, maintaining shared spaces, and managing finances to ensure a cohesive and orderly environment. Membership in an HOA is typically mandatory for all property owners within the boundaries of the development, and members are often required to pay mandatory fees that contribute to the community’s upkeep.

HOAs have the authority to enforce maintenance and design standards that may exceed those established by city ordinances, ensuring that properties adhere to agreed-upon aesthetic and structural guidelines. This can include anything from landscaping requirements to the color of exterior paint used on properties.

For those involved in or looking to establish an HOA or Condo Board in Tempe, the city’s Neighborhood Services Division offers resources and a comprehensive HOA Handbook. This handbook is designed to assist new and existing association chairpersons in effectively managing their associations, and enhancing community meetings, activities, and communications. Moreover, the division provides support through workshops and training sessions that focus on leadership development and effective management practices.

These services underscore the city’s commitment to supporting strong, cohesive communities through well-managed homeowners and condominium associations. For detailed information and access to resources such as the HOA Handbook, individuals and boards can visit Tempe’s official city website or contact the Neighborhood Services Division directly.

Resources and Support for Tempe Airbnb Property Owners

Help Line and Support Contacts

As part of its commitment to serving the community, the City of Tempe’s Tax and License Department strives to provide outstanding service to all taxpayers and to enforce the tax code fairly and equitably. For property owners navigating the regulations of short-term rentals, Tempe offers several contact methods to get assistance and answers to their queries.

Contact Information for Tempe Tax & License Office

Operational Hours: Monday through Friday, 8:00 AM to 5:00 PM, except on City-observed holidays.

Location and Mailing Addresses:

Office Address: 20 E. 6th St., 3rd Floor, Tempe, AZ 85281
Mailing Address: P.O. Box 5002, Tempe, AZ 85280

Communication Channels:

Phone: Property owners can contact the Tax and License office at 480-350-2955 for direct assistance during office hours.
Fax: For sending documents or written inquiries, the fax number is 480-350-8659.
Email: For those who prefer electronic communication, inquiries can be sent to [email protected].

The Tax and License office is equipped to handle all queries related to short-term rental regulations, licensing applications, and compliance requirements. Property owners are encouraged to use these resources to ensure they are fully informed and compliant with local laws. Additionally, by maintaining open lines of communication, Tempe ensures that all property owners have the support they need to successfully manage their rental properties within the city.

Conclusion

This article provides a robust framework for property owners to understand and navigate the complexities of short-term rental regulations in Tempe. It covers essential topics, from the necessity of obtaining a Tempe short-term rental license to adhering to stringent community and safety protocols, and tax compliance standards. This guide is instrumental for owners to conduct their rental activities responsibly, ensuring they align with city laws while capitalizing on the attractive investment opportunities that the vibrant city of Tempe offers. With its strategic location, dynamic community, and supportive regulatory environment, Tempe continues to be a prime location for Airbnb investments, promising significant returns due to high demand and occupancy rates.