Want a Motel Next to Your Home?

Marilyn  is upset… kind of scared too. She just learned there’s a motel going in next to her home. 

Marilyn knows I’m a lawyer and real estate guy so she called me for help. “There must be a law” she screamed. 

I said, “Marilyn, calm down. There is a law. Actually, several laws. Motels in quiet residential communities are perfectly legal throughout most areas of the country. 

“Seriously Greg!” Marilyn exclaimed. “You mean it’s legal to destroy a quiet residential community by opening a motel next door to homes? Isn’t that a business? Don’t you need commercial zoning?” 

“Marilyn, we must trust our lawmakers.” I replied. “In Arizona, where we live, our state legislators enacted a law that prevents communities like ours (Paradise Valley) from regulating daily rentals. So, rejoice you can open a motel too!

The call from Marilyn got me thinking. Maybe I should make extra money renting my spare bedrooms, converting my home to a motel like other people around the country. I’d call it “Hague’s Hotel In Paradise.” (I think “hotel” sounds more upscale than “motel.”) 

I live in the perfect community! One acre lots. Quiet and tranquil. No street lights. And Paradise Valley is a magnetic name for marketing. 

Since my home backs to our local country club, I could install a gate giving my golf loving renters access to the course. I’m sure they’d pay me extra for that. 

Of Course, I’d warn them to stay clear of club members, hoping nobody minds seeing strangers on the course as long as they don’t interfere with play. (I can envision non-resident investors actually doing stuff like this.)  

Over the past year, I’ve heard from many upset homeowners like Marilyn. They are concerned about privacy. They are concerned about security. They are concerned about the value of their home. It’s happening in neighborhoods across the country. 

It started with the Airbnb trend.  Initially, that was about homeowners making a few extra bucks renting a spare bedroom. But now it’s become a profit driven business fueled by large corporations and investors. They pay top dollar for residential homes, converting them to VRBO and Airbnb neighborhood motels. 

This could be prevented by zoning restrictions and rental regulations. But communities better act quickly because constitutional “grandfathering” could make it legally impossible to “outlaw” these neighborhood businesses once they get going. 

The problem has gotten seriously bad in Arizona. Here, the state legislature passed a law preventing Arizona communities like mine (Paradise Valley) from passing any restrictions on short term rentals. If communities rebel, the state cuts off their services. 

• A one-week rental? 
  Allowed by law. 
• A one-day rental? 
  Allowed by law. 
• Multiple bedrooms rented?
  Allowed by law.  
• Owner moves out and rents? 
  Allowed by law. 
• Property owned by an investor? 
  Allowed by law. 
• Food served to each bedroom? 
  Allowed by law. 
• Hague’s Hotel in Paradise?
  Allowed by law. 

The announced reason for the Arizona law was to enable homeowners to make extra income renting a spare bedroom, and keeping small communities from preventing it. But why shouldn’t local government be allowed to  restrict this practice? We elect local officials to keep our neighborhoods the way we want them. 

I was fortunate to have our town mayor, Jerry Bien-Willner, speak at the Hague Partners Team Meeting last week. It’s not my place to share his specific views on short term rentals, but I will tell you that he is dedicated to protecting our community. We are blessed to have him as mayor. 

You may may want to motivate your mayor before it’s too late, and you have a motel operating next to your home. Unfortunately, our mayor has his hands somewhat tied because of the ridiculous state law. Don’t let that happen to your mayor.  

I also know our Governor, Doug Ducey, and believe he had good intentions when he signed the state law. He is a free enterprise guy (as am I), and was probably trying to keep communities from over-restricting short term rentals, thereby preventing homeowners from occasionally renting a back bedroom. 

But the state law was poorly written and could end up ruining the character and property values of neighborhoods throughout Arizona. Don’t let this happen in your state. 

Our governor is seeing the problem this caused, and recently signed a new law regulating special events at homes like weddings, and giving neighbors a way to complain about loud parties. But this new law doesn’t solve the problem of commercial businesses operating in residential neighborhoods.  

So you could make money turning your home into a neighborhood motel. Or you could sell it at a premium to someone who sees motel potential. But if you do, there may be no turning back, and ultimately nowhere you can move without transient traffic and loud parties next door.

Also, as I mentioned above, when neighborhood motels proliferate, they could become constitutionally protected as “grandfathered uses.” This is an informal characterization for the protection of property rights when laws change in a way that takes them away. 

Want a motel next to your home? If not, I encourage you to speak up. Talk with your mayor. Lobby your legislators. Take action before your neighbor is somebody new every day. 

If you agree,  go to Repeal1350.com and sign the petition to Governor Ducey and the Arizona State Legislature.