Kaitlin used to lived in the Village of Oak Creek for more than two years when she received the notice. It is June 2022 and her landlord has decided to increase the rent of her three bedroom house from $800 to $3,000, which is a 36% increase. For Kaitlin, who has been living alone since her sons moved out, the cost of staying is high. She invested her hard-earned money into property improvements, addressing the persistent clay stains that the desert monsoon sweeps from the surrounding red rocks in Sedona, Arizona. Kaitlin, who requested anonymity to protect her pending rental applications, was devastated to have to leave the property she made her own. But she is not alone. Across Sedona, rental prices skyrocketed—and a new kind of Airbnb gold rush was to blame.
For years, short-term rental companies like Airbnb have been tearing down cities. Some, like Mexico City, hugged rental platform to attract tourists and digital nomads. Others, like Amsterdam and London, have moved to restrict or ban the platform, citing concerns about overtourism; strain on housing supply; or in the case of Torontothe rise of the “ghost hotels” Airbnb.
Three years after the pandemic, with flexible working becoming the new normal for many and urban rental supply taking longer to recover, short-term rental entrepreneurs have shifted focus. from major cities to tourist-friendly towns and resort destinations. And Sedona, a small city set among dramatic crimson rock formations in central Arizona, was one of the hardest hit. “Everybody wants to go to those markets,” said Jamie Lane, vice president of research for AirDNA, a short-term rental analytics firm. And with the influx of foreigners, local residents like Kaitlin are being forced to leave.
Sedona has banned short-term rentals since 1995. But in 2017, Arizona state law, SB1350, blocked such restrictions. The legislators introduced the law like a hug of the new sharing economy and a benefit for Arizonans who want to earn extra money by renting out their spare bedroom. But when the law was passed, investors flooded the market. More than 15 percent of the homes available in Sedona are currently listed on short-term rental sites like Airbnb or Vrbo, According to a 2021 study by local company Elliott Packer & Co. As in many cities around the world, home prices in Sedona skyrocketed during the pandemic: The median price for a single-family home rose 64% in the two-year period from October 2020 to 2022. Story Shannon Boone, City of Sedona’s housing manager, says it’s becoming increasingly common for people to live out of cars. Camping on the outskirts of the city as a way of living—not vacationing—is harm The pristine national forest surrounds it.
Tourists flock to Sedona for its breathtaking scenery and walking trails, and the city has established itself as the new-age spiritual center of the American West. Along its main road, healing centers and crystal shops are nestled between bars and restaurants. “Tourism will always be our economic engine, whether we like it or not,” said Sandy Moriarty, former mayor of Sedona. But those tourists are increasingly strangling the life of a city that depends on them for survival.
“Airbnb allows twice as many tourists to come here, which means more workforce, while reducing the amount of housing available,” Boone said. It’s a brutal combination. More tourists means more money and more job opportunities in Sedona’s hospitality and entertainment industry. But with housing shortages, everyone ends up competing for the same tiny pool of rental properties. And in Sedona, more and more of these rentals are now Airbnbs.
