Scottsdale closes enforcement gap on commercial events at short-term rentals

Scottsdale is adding another tool to its nationally recognized short-term rental enforcement program, adopting a new ordinance designed to crack down on vacation rentals operating as commercial event venues.

The Scottsdale City Council voted June 23 to approve Ordinance No. 4719, which adds a formal definition of "event center" to the Scottsdale Revised Code. The change is intended to strengthen the city's ability to enforce existing state and local prohibitions against using short-term rentals for nonresidential purposes, including weddings, corporate gatherings, large parties and other commercial events.

The action addresses a gap in Arizona law. While state statute prohibits short-term rentals from operating as banquet halls, event centers or similar commercial venues, neither state law nor Scottsdale's city code previously defined what constitutes an event center, making enforcement more challenging.

"This ordinance gives us greater clarity and stronger footing when addressing properties that are operating more like commercial event venues than residential homes," City Attorney Luis Santaella said. "State law is clear that short-term rentals cannot be used for nonresidential purposes. By defining what an event center is, we're providing clear expectations for property owners while strengthening our ability to protect neighborhoods from activities that were never intended to occur in residential areas."

Under the ordinance, an event center is defined as a property used for organized gatherings, parties, receptions or functions that involve a commercial purpose, event-related impacts, or activities requiring a city permit or license. The definition specifically includes weddings, receptions, banquets, corporate events, promotional events and conferences, while excluding ordinary residential gatherings that are incidental to lawful occupancy of the home.

The measure builds on Scottsdale's multi-year effort to address problematic short-term rental activity while working within the limits imposed by state law.

Since Arizona lawmakers largely preempted local regulation of short-term rentals, Scottsdale has developed one of the state's most comprehensive enforcement programs, bringing together the City Manager's Office, Police Department, City Attorney's Office, Constituent Services, Planning and Development Services, Code Enforcement, Tax and Licensing, and Government Relations. The city has also invested in technology and data analysis tools to identify violations and support enforcement efforts.

Those efforts have produced measurable results, including increased compliance, targeted enforcement against nuisance properties and stronger coordination between city departments.

"Scottsdale has consistently been at the forefront of finding innovative and lawful ways to address short-term rental impacts on neighborhoods," City Manager Greg Caton said. "This action is another example of our commitment to protecting residents' quality of life while ensuring short-term rentals operate as intended under state law. When properties cross the line from residential use to commercial event operations, we need the tools to respond effectively."

City officials say the ordinance will also provide greater certainty for responsible short-term rental operators by establishing a clear standard for prohibited event-related activities.

The new definition will be enforced through existing provisions of Scottsdale's short-term rental ordinance, which prohibit rentals from being used for non-residential purposes. City staff indicated that no additional resources are required to administer or enforce the ordinance.

Scottsdale's short-term rental enforcement efforts have drawn attention from communities across Arizona and the nation seeking solutions to neighborhood concerns associated with the rapidly growing vacation rental industry. The latest ordinance reflects their ongoing commitment to balancing property rights, tourism and neighborhood livability.

"Our message remains simple," Santaella said. "Short-term rentals are allowed for residential uses. They are not event venues. This ordinance helps ensure that distinction remains clear."