Spokane, Tempe and Peoria clear the 60% screen; only one permit fits a tenant
Three mid-sized metros clear a 60% occupancy screen with full 2BR economics: Spokane models +$291 a month with a permit a renter can hold, Tempe +$220 with a licence the owner must hold, and Peoria +$93 behind a discretionary special use.
Spokane, Tempe and Peoria all clear this week's 60% screen, and after the full cost stack each one is left with less than $300 a month. In Spokane a renter can hold the permit. In Tempe the licence sits with the owner, who is allowed to hire a manager. In Peoria a leased unit in a residential district needs a discretionary approval first.
Regulation weather: October 11 – 18
Five dated changes landed this week. One of them went the operators' way.
Santa Barbara, California. The city posted on October 12 that its two rental ordinances are introduced and scheduled for final adoption on October 27. The inland chapters in Title 30 add a two-night minimum, one licence per owner citywide, and one rental per multi-unit parcel. 1
Madison, Alabama. The city reported on October 15 that 42 of the 57 active listings it found are now in violation. The October 1 deadline produced 27 applications, 11 permits and 5 failed inspections. Ordinance 2026-201, passed June 23, carries a 190-permit cap, a $350 fee and a 10% lodging tax. 2
Ganges Township, Michigan. The township board passed a short-term rental ordinance on October 13, and it takes effect November 12. 3
Dunes City, Oregon. Measure 20-386 goes to the November 3 ballot. It would stop permits for new rentals and require an on-site host, a one-hour complaint response and HOA compliance at each renewal. 4
Sandpoint, Idaho. Idaho House Bill 583 erased the city's cap. Mayor Jeremy Grimm told KHQ on October 12 that Sandpoint had allowed about 35 rentals in its neighborhoods, with a waiting list past that. 5 Sandpoint now regulates none of them, and the statute bars any city or county ordinance with the practical effect of prohibiting short-term rentals. 56
Three of the five make access tighter, one sends the question to a ballot, and one removes a cap outright. The tightening all landed at the neighborhood level, in places that had no rule before.
What cleared the screen
The filter is unchanged. Population between 100,000 and 800,000, market nightly revenue at 60% occupancy above 1.35 times the two-bedroom asking rent, a light of green or yellow, and at least one disclosed operator running three or more units profitably in the past year.
| City | Population | 2BR asking rent | Market ADR | Occupancy | Revenue at 60% | Rent × 1.35 hurdle | Market score | Light |
|---|---|---|---|---|---|---|---|---|
| Spokane, WA | 230,783 7 | $1,400 8 | $154 9 | 62% 9 | $2,772 | $1,890 | 67 | GREEN |
| Tempe, AZ | 190,571 10 | $1,573 11 | $161 12 | 69% 12 | $2,898 | $2,124 | 71 | GREEN, owner-held |
| Peoria, IL | 110,920 13 | $1,000 14 | $114 15 | 69% 15 | $2,052 | $1,350 | 98 | YELLOW |
Two more markets cleared the top line and were set aside.
Grand Rapids, Michigan posted the widest spread anything screened this week: $2,844 against a $2,025 hurdle, 66% occupancy and an AirDNA score of 92, with 201,183 people inside the population band. 161718
The zoning code lists short-term lodging in its commercial use tables. In residential districts the city runs a one-room home occupation, limited to the operator's own principal residence. 1920 A leased flat has no residential route, so the best headline number in the set goes in the bin.
Durham, North Carolina reached $2,538 against a $2,038 hurdle and then lost the margin to rent. 2122 At $1,510 for the two-bedroom and 63% occupancy, the same cost stack comes out at zero before any city permit fee.
The assumptions behind every figure
One two-bedroom unit, listed 365 nights a year, at 18 booked nights a month. The nightly rate is AirDNA's market average daily rate across all bedroom counts, because the public market page reports one rate for the whole market.
Rent is Zillow's average asking rent for a two-bedroom apartment. Cleaning fees stay out of revenue and are matched against the cleaner's invoice. The unit is furnished for $6,000 and amortised over 24 months.
The platform fee is Airbnb's host-only 15.5%. Insurance is a commercial host policy. Lodging tax is a pass-through collected from the guest.
AirDNA's public pages publish a seasonality score for each market and name no trough month, so each city below reports its score and declines to name a collapse month.
Spokane, Washington
Snapshot. Population 230,783. Two-bedroom asking rent $1,400. Market ADR $154, occupancy 62%. Active listings 1,274, down 20.6% year over year, with revenue up 82.2% and the rate down 8.8%. AirDNA Market Score 67, seasonality 75. Light: green. 789
Where to look. Downtown and Riverside, where the convention floor and the hospital district sit a few minutes apart. Furnished Finder listings in the city sell hospital distance directly; one is titled "Cozy Home Just Minutes From Hospitals." 23
Second, the South Hill around the Perry District, where the housing stock is single-family and duplex. Those two structure types get one permit each, without a building-level cap.
The numbers on one 2BR, per month.
| Line | Amount |
|---|---|
| Gross nightly revenue, 18 nights × $154 | $2,772 |
| Airbnb host-only fee, 15.5% | −$430 |
| Net platform revenue | $2,342 |
| Base rent | −$1,400 |
| Utilities and internet | −$240 |
| Furnishing amortisation, $6,000 over 24 months | −$250 |
| Cleaning and restock, net of guest cleaning fee | −$45 |
| Host insurance | −$75 |
| Pricing software | −$25 |
| Permit, $200 application over 12 months | −$17 |
| Net monthly cash flow | +$291 |
Regulation gate. Chapter 17C.316 of the Spokane Municipal Code governs the use, and the city's own page states that owners and tenants may apply. 2425 The permit costs $200 in residential zones with a $100 renewal, and $300 elsewhere.
An application needs a city and state business licence, a notarised life safety form, liability insurance, a floor plan and site plan, and a notification letter to abutting owners. Read §§ 17C.316.020 and 17C.316.040.
Two clauses decide the arbitrage. The definitions separate "operator", anyone paid to run the unit, from "owner", and exclude a lessee from the owner definition; the tenant applies with an Owner Authorization Form from the landlord. 26 The city also says plainly that a permit does not override a lease that forbids subletting, so the right has to be written in.
The cap binds in multifamily buildings. One rental is allowed per single-family house, per attached house and in one unit of a duplex. Other multifamily and mixed-use buildings may rent 20% of units, rounded up, where the building is sprinklered; the city's application form notes that multifamily buildings must have sprinklers. 24
Mid-term signal. Furnished Finder lists 482 furnished rentals in Spokane, 232 available now. 23
Risks. The rate is falling: ADR dropped 8.8% year over year while occupancy rose 17.2%, which is what a market looks like when supply leaves. 9 Seasonality scores 75, mid-pack. The multifamily cap is address-specific: in a sprinklered building at 20%, a 25-unit building gets five rentals, and the sixth applicant waits.
First 90 days. Weeks 1–2: pick two or three addresses in single-family or duplex stock and confirm zoning. Weeks 3–4: write the subletting right and the permit cooperation into the lease, and get the Owner Authorization Form signed. Weeks 5–8: apply, post the notification letters, furnish. Weeks 9–13: list at $145 and hold 62% occupancy before raising the rate.
Is this safe to start in the next 30 days? YES, conditional. The permit is administrative, a tenant can hold it, and the margin keeps its sign on a 10% rate cut. Two conditions: rent at or below $1,300 on the unit, and a lease that names subletting in writing.
Tempe, Arizona
Snapshot. Population 190,571. Two-bedroom asking rent $1,573. Market ADR $161, occupancy 69%. Active listings 1,093, down 53.2% year over year, with revenue up 106.2% and the rate down 15.0%. AirDNA Market Score 71, seasonality 69. Light: green, with the licence held by the owner. 101112
Where to look. Downtown Tempe around Mill Avenue, where the university campus, the lake and the event calendar overlap. Second, North Tempe along the Scottsdale line, where furnished listings advertise the Scottsdale border and the rental stock is houses rather than apartments. Furnished Finder lists a two-bedroom condo six minutes from campus at $2,100 a month. 27
The numbers on one 2BR, per month.
| Line | Amount |
|---|---|
| Gross nightly revenue, 18 nights × $161 | $2,898 |
| Airbnb host-only fee, 15.5% | −$449 |
| Net platform revenue | $2,449 |
| Base rent | −$1,573 |
| Utilities and internet | −$240 |
| Furnishing amortisation, $6,000 over 24 months | −$250 |
| Cleaning and restock, net of guest cleaning fee | −$45 |
| Host insurance | −$75 |
| Pricing software | −$25 |
| Licence, $250 a year | −$21 |
| Net monthly cash flow | +$220 |
Regulation gate. Tempe licenses short-term rentals under Ordinance O2023.01, effective March 6, 2023. 28 The licence costs $250 a year per unit, or $187.50 if issued after July 1, and expires on December 31.
An application needs a Transaction Privilege Tax licence from the state, proof of registration with the Maricopa County Assessor, $500,000 of liability coverage or platform-provided cover, and a notification letter to neighbours. Running without one carries a penalty of up to $1,000 a month.
Arizona law sets the ceiling on what the city can do. Cities may license and register rentals, cap occupancy at two adults per bedroom plus two, and require a contact who answers complaints; they may not ban rentals or regulate them by use classification. 29
The licence names the owner. The city's page describes the owner renting "themselves or employing a property management company," which is the shape a lease-based operator fits into: the landlord holds the licence, the operator runs the unit on the owner's paperwork. Get the landlord's signature on the application before the lease starts, and put the renewal obligation in the lease.
Mid-term signal. Furnished Finder lists 356 furnished rentals in Tempe, 177 available now. 27
Risks. The rate is the whole risk. ADR fell 15.0% year over year, and a further 10% cut turns +$220 into −$25. 12
Seasonality scores 69, the weakest of the three. The city's authority is set at the state level, where an amendment to ARS 9-500.39 would change the rules without the city voting.
First 90 days. Weeks 1–2: confirm the unit is in a building that allows rentals and get the owner's written agreement to hold the licence. Weeks 3–4: open the TPT account and the county assessor registration. Weeks 5–8: file the licence, send the neighbour letters, furnish. Weeks 9–13: list, and price the summer months separately from the academic year.
Is this safe to start in the next 30 days? WAIT. The licence is cheap and the state protects the use. The margin turns negative on a 10% rate cut in a market whose rate fell 15% last year, so sign only against a rent below $1,400 or after two more months of rate data.
Peoria, Illinois
Snapshot. Population 110,920. Two-bedroom asking rent $1,000. Market ADR $114, occupancy 69%. Active listings 470, up 52.1% year over year, with revenue up 179.6% and the rate up 11.4%. AirDNA Market Score 98, seasonality 86. Light: yellow. This is Peoria, Illinois — a different city from the Peoria, Arizona this channel screened in September. 131415
Where to look. Downtown and the riverfront, around the Civic Center and the museum campus, where business travel and event nights overlap. Second, the hilltop medical district around OSF Saint Francis and Bradley University, where the furnished market already sells hospital proximity; Furnished Finder's Peoria listings include several titled around hospitals. 30
The numbers on one 2BR, per month.
| Line | Amount |
|---|---|
| Gross nightly revenue, 18 nights × $114 | $2,052 |
| Airbnb host-only fee, 15.5% | −$318 |
| Net platform revenue | $1,734 |
| Base rent | −$1,000 |
| Utilities and internet | −$240 |
| Furnishing amortisation, $6,000 over 24 months | −$250 |
| Cleaning and restock, net of guest cleaning fee | −$45 |
| Host insurance | −$75 |
| Pricing software | −$25 |
| Licence, $75 a year | −$6 |
| Net monthly cash flow | +$93 |
The table leaves out the special use permit fee, which the city sets through its zoning fee schedule. Budget for it separately, because in a residential district this unit needs one.
Regulation gate. Peoria licenses short-term rentals through a portal run by Community Development: $75 per unit a year, renewed by January 31, with each unit carrying its own licence. 31 The licence is issued to the owner. The operator also pays the municipal hotel and motel room rental tax.
The zoning is where a leased unit stops. A short-term rental in a residential district that the owner does not occupy needs special use approval from the city as well as the licence. 32
The same record shows a neighbourhood cap: no more than 3%, or 16 rentals, inside the Moss-Bradley Residential Association. The hearing is noticed, neighbours can object, and the approval is discretionary.
Mid-term signal. Furnished Finder lists 140 furnished rentals in Peoria, 66 available now. 30
Risks. Supply grew 52.1% in a year, the only one of the three cities adding listings at speed. 15 The margin is $93, and a 10% rate cut takes it to −$81.
The special use runs through a public hearing, and the caps are written by neighbourhood association, so the answer differs block by block.
First 90 days. Weeks 1–2: identify the zoning district and the association boundary for two or three addresses. Weeks 3–5: confirm with Community Development whether the parcel needs a special use. Weeks 6–10: file for the special use and attend the hearing; file the licence in parallel. Weeks 11–13: furnish and list.
Is this safe to start in the next 30 days? WAIT. The spread is the widest of the three and the licence is $75, which makes the discretionary hearing the whole decision. Wait for the special use to be granted before signing, and price the rent against the $1,000 average.
The downside case
Net monthly cash flow on one 2BR unit at three occupancy levels, built by this channel from the model above. It is a projection under one assumed cost stack, not an observed result. The line at $0 marks break-even.
| City | 50% — 15 nights | 60% — 18 nights | 70% — 21 nights | 60% with ADR 10% lower |
|---|---|---|---|---|
| Spokane, WA | −$100 | +$291 | +$681 | +$56 |
| Tempe, AZ | −$188 | +$220 | +$628 | −$25 |
| Peoria, IL | −$196 | +$93 | +$382 | −$81 |
All three lose money at 15 nights a month, and two lose money on a 10% rate cut. Spokane is the only city here that holds its sign in both tests.
Before you sign anything
- Read the section, not the summary page. Spokane: SMC §§ 17C.316.020 and 17C.316.040. Tempe: Ordinance O2023.01 and ARS § 9-500.39. Peoria: the special use conditions attached to your address.
- Get the permit holder right in writing. Spokane lets a tenant apply with the owner's authorization. Tempe and Peoria license the owner, so the lease has to obligate the landlord to apply and renew.
- Count the building before the block. Spokane caps sprinklered multifamily buildings at 20% of units; Peoria caps some associations at 3%.
- Price rent below the market average, because every city here loses money at 15 nights.
- Hold three months of rent in reserve, which is the only thing that carries a 50% occupancy month.
One promise this channel keeps and has missed again this week: at least one disclosed operator running three or more units profitably in each city within the past twelve months.
The searches this week looked at city news, management-company disclosures and platform host posts for all three cities. Nothing tied a named operator to a unit count, a profit figure and a date inside the window. The screen's other checks stand on the sources cited above; this one stays open.
References
- 1City Council Recommends Adoption of Short-Term Rental Ordinances
santabarbaraca.gov
- 2Oct. 2026 Update About Short-Term Rentals in Madison
madisonal.gov
- 3Ganges Township passes new short-term rental ordinance
hollandsentinel.com
- 4
- 5
- 6HOUSE BILL 583
legislature.idaho.gov
- 7QuickFacts: Spokane city, Washington
census.gov
- 8Average Rental Price in Spokane, WA
zillow.com
- 9
- 10QuickFacts: Tempe city, Arizona
census.gov
- 11Average Rental Price in Tempe, AZ
zillow.com
- 12
- 13QuickFacts: Peoria city, Illinois
census.gov
- 14Average Rental Price in Peoria, IL
zillow.com
- 15
- 16
- 17Average Rental Price in Grand Rapids, MI
zillow.com
- 18QuickFacts: Grand Rapids city, Michigan
census.gov
- 19Chapter 61 Zoning Ordinance, use tables
library.municode.com
- 20One-Room Rental Guide
grandrapidsmi.gov
- 21
- 22Average Rental Price in Durham, NC
zillow.com
- 23Furnished monthly rentals in Spokane, WA
furnishedfinder.com
- 24SMC 17C.316.040 Short-Term Rentals in Residential Zones
my.spokanecity.org
- 25Short Term Rentals — City of Spokane
my.spokanecity.org
- 26SMC 17C.316.020 Definitions
my.spokanecity.org
- 27Furnished monthly rentals in Tempe, AZ
furnishedfinder.com
- 28Tempe Short-Term Rental license
tempe.gov
- 29Arizona Revised Statutes § 9-500.39
azleg.gov
- 30Furnished monthly rentals in Peoria, IL
furnishedfinder.com
- 31Residential Property Registration — Peoria, IL
peoriagov.org
- 32Special use for a short-term rental in a Class R4 district
peoriail.legistar.com
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