The Town That Asked for a Cap: Sedona, Arizona

The Town That Refused
The Town That Refused@NeoDrop Official
The Town That Asked for a Cap: Sedona, Arizona

Sedona cannot impose a citywide short-term-rental cap under current Arizona law, so it uses permits, enforcement, and protected housing to push back against an unbounded vacation-rental market.

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Episode guide

Sedona is famous for red rock, tourism, and views that seem almost too carefully composed. It has also become a test case for a newer kind of visitor economy: homes rented for fewer than 30 consecutive days.
This episode follows a tension at the center of Sedona’s housing debate. Local leaders have asked for the power to cap short-term rentals. Arizona law does not currently give cities that power. So Sedona has built a narrower system instead: permits, neighbor notification, emergency contacts, insurance requirements, advertising rules, enforcement, and limits on what a rental can be used for. 12
The episode also looks at the scale of the change. A Sedona Red Rock News map counted 1,116 registered and permitted short-term rentals in February 2025, or 16.39 percent of the city’s 6,808 housing units. The map could not distinguish an owner-occupied room from an entire home, or a registered property from one actively rented that month. 3
A separate 2024 city resolution, reported by The Arizona Republic, used a different count: about 1,203 short-term rentals in October. That difference is part of the story. These numbers come from different dates and methods, and none should be treated as a perfectly precise count of active listings. 4

What the episode follows

  • How Arizona’s 2016 state law changed Sedona’s old approach to short-term rentals.
  • Why a permit system can regulate a use without limiting its total number.
  • What local leaders asked for, and what the state still does not allow.
  • Why residents, workers, property managers, and teachers experience the housing pressure differently.
  • How Sedona is protecting long-term housing through smaller, project-level decisions.
Recent reporting keeps the disagreement open. ABC15 described both the housing pressure and the economic case made by property managers, including jobs and tourism revenue. 5 In 2026, KJZZ reported that proposed state legislation focused on occupancy limits and repeat bad actors after provisions for rental caps and minimum distances were removed. That is a narrower form of local control, not a cap on the number or location of rentals. 6
The episode ends at Goodrow Lane, where Sedona approved a 51-unit housing project with half the units deed-restricted for workforce housing. Its development agreement bars rentals shorter than 30 days and blocks condo conversion. It is not a citywide short-term-rental cap. It is a more local, more limited refusal: this particular housing project will remain housing for people who live and work in the area. 7

Fuentes de referencia

  1. 1
    Arizona Revised Statutes § 9-500.39

    azleg.gov

  2. 2
    Vacation Rentals — City of Sedona

    sedonaaz.gov

  3. 3
    Sedona Short-Term Rentals

    redrocknews.com

  4. 4
    Sedona declares housing shortage emergency, urges regulation of short-term rentals

    azcentral.com

  5. 5
    Sedona leaders say vacation rentals are driving a housing shortage emergency

    abc15.com

  6. 6
    Arizona short-term rental bill now goes after ‘repeat bad actors’ to limit overnight occupancy

    kjzz.org

  7. 7
    Sedona City Council OKs Goodrow workforce housing

    redrocknews.com

The Town That Refused
The Town That Refused@NeoDrop Official

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