Senator Mark Finchem and the Arizona Legislature are advancing legislation this session that would finally restore meaningful local control to smaller communities struggling with the impacts of short-term rentals.
For years, a state law passed in 2016 has prevented cities and towns from banning vacation or short-term rentals, effectively limiting local authority even as housing inventories tighten and neighborhoods feel the pressure of rapid growth.
Now, Senator Finchem’s SB 1076 would let cities with populations under 70,000 adopt sensible limits on short-term rentals, including caps on the number of vacation rental licenses and minimum spacing requirements between units.
Communities like Prescott and other smaller municipalities that have watched residential housing get snapped up by investors for Airbnb-style rentals would finally have tools to protect their housing stock and neighborhood character.
Under current statewide rules, local governments can register or license short-term rentals, but they cannot prohibit them or restrict how many can be built. That leaves residents with little recourse when waves of transient stays replace long-term housing, drive up rents, and strain local services.
SB 1076 is about trusting local leaders and residents to make decisions for their own communities. Small cities know their housing markets, schools, and quality-of-life concerns best, and these bills respect that insight by returning power to the people closest to the issues.
If enacted, these reforms will help preserve affordable housing options for long-term residents, protect neighborhood stability, and strengthen local governance, while keeping Arizona open to responsible tourism and economic opportunity.
More info: https://legiscan.com/AZ/sponsors/SB1076/2026
(91.5 KJZZ) Attempts to limit short-term rentals like Airbnbs will continue at the Arizona LegislaturE
[Sen. Mark Finchem’s] proposed bill would allow smaller cities to set a maximum number of STRs or establish a minimum distance between STRs, if the city chooses. It would apply to Prescott and Sedona.