Kaitlin had been she had lived in the village of Oak Creek for more than two years when she received the notice. It was June 2022, and her landlord had decided to increase the rent on her three-bedroom house from $800 to $3,000, a 36% increase. For Kaitlin, who had been living alone since her sons moved out, the cost of living there was prohibitive. She had invested hard-earned money in improving the property, removing the lingering clay stains that the desert monsoons swept from the surrounding red rocks of Sedona, Arizona. Kaitlin, who requested anonymity to protect her pending rental applications, was upset to leave the property she had called her own. But she wasn’t alone. Across Sedona, rent prices were skyrocketing — and a new kind of Airbnb gold rush was to blame.
For years, short-term rental companies like Airbnb have been devastating cities. Some, like Mexico City, have adopted the rental platform to attract tourists and digital nomads. Others, like Amsterdam and London, have moved to limit or ban the platform, citing concerns about excessive tourism; tensions on the housing supply; or in the case of Toronto, the rise of Airbnb “ghost hotels.”
Three years into the pandemic, as flexible working has become the new normal for many and urban rental deals take longer to rebound, short-term rental entrepreneurs have shifted away from big cities to to cities and tourist resort destinations. And Sedona, a small town nestled between spectacular purple rock formations in central Arizona, is among the hardest hit. “Everyone wanted to go to these markets,” says Jamie Lane, vice president of research at AirDNA, a short-term rental analytics company. And with the influx of outsiders, local residents like Kaitlin are forced to leave.
Sedona banned short-term rentals in 1995. But in 2017, an Arizona state law, SB1350, blocked those restrictions. Lawmakers had touted the law as an embrace of the new sharing economy and a boon for Arizonians looking to make a little extra money by renting out their spare rooms. But when the law was passed, investors flooded the market. More than 15% of available accommodations in Sedona are now listed on short-term rental sites like Airbnb or Vrbo, according to a 2021 study by local firm Elliott Packer & Co. As in many cities around the world, prices Real estate prices in Sedona have skyrocketed during this period. the pandemic: The median price of a single-family home increased 64% over a two-year period from October 2020 to 2022. Stories of people living without a car have become increasingly common, according to manager Shannon Boone of housing in the city of Sedona. Camping on the outskirts of town as a way of life – not a vacation – damages the pristine national forest that surrounds it.
Tourists flock to Sedona for its breathtaking views and hiking trails, and the city has made a name for itself as the spiritual heart of the new age of the American West. Along its main street, healing centers and crystal shops are nestled between bars and restaurants. “Tourism will always be our economic engine, whether we like it or not,” says Sandy Moriarty, the former mayor of Sedona. But these tourists are increasingly stifling the life of a city which depends on them for its survival.
“Airbnb has helped double the amount of tourism here, which means more labor is needed, while at the same time reducing the number of accommodations available,” says Boone. It’s a brutal combination. More tourists equals more money and more job opportunities in Sedona’s hospitality and entertainment industries. But with the housing shortage, everyone ends up fighting for the same small pool of rental properties. And in Sedona, more and more of those rentals are now Airbnbs.
