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The Vanishing Neighborhoods: When Vacation Rentals Squeeze Out Residents in Northern Arizona

Jennifer Conrad is the Founder, CEO, and Editor-in-Chief of Arizona Ascent, a media platform more than a magazine—uniting business, real estate, and community across Arizona. She builds brands and content that people remember, turning storytelling into strategy—and strategy into measurable impact.

Under her leadership, Arizona Ascent spotlights the leaders shaping Arizona’s future, positioning their work within the state’s broader momentum. Its stories don’t just inform—they elevate credibility, expand visibility, and connect leaders to the ecosystem that makes growth possible.

By Jennifer Conrad, Managing Editor

The vermillion sunsets that paint the sky over Sedona, the towering pines whispering secrets in Flagstaff’s high country, the historic charm of Williams.  These are the images that draw millions to Northern Arizona each year. But behind the picture-postcard beauty, a crisis is brewing, threatening the foundation of these communities. It’s a story of vanishing neighborhoods, soaring housing costs, and a battle for the soul of towns caught between the allure of tourism dollars and the desperate need for local homes.

A Town in Transition: The Short-Term Rental Surge

The culprit? The explosive growth of short-term rentals. Fueled by platforms like Airbnb and VRBO, what was once a niche market has ballooned into a critical issue, reshaping the housing market with alarming speed.

Over the past five years, a staggering 15% of its 1,500 housing units, roughly 225 homes, have been lost to the short-term rental market

“Those short-term rentals are taking properties that used to be workforce housing, long-term rentals that people lived in, their families lived in,” explains Williams Mayor Don Dent. “They were there for teachers, firefighters. Any of your, what we call, essential workers.”1 His town of Williams, gateway to the Grand Canyon, offers a stark illustration. Over the past five years, a staggering 15% of its 1,500 housing units, roughly 225 homes, have been lost to the short-term rental market. Imagine one in every seven houses on your block transforming into a revolving door of tourists – the impact is palpable.

Sedona, with its iconic red rock formations, faces an even more acute crisis. City data indicates nearly 19% of its 6,357 housing units, a staggering 1,200 properties, are being used as short-term rentals. 2

Even Flagstaff, a larger city with 31,682 housing units, feels the pinch. While its 1,299 short-term rentals represent a smaller percentage (4.1%), they still contribute to the shrinking pool of available homes. 3

The Ripple Effect: When Homes Become Commodities

This isn’t just about numbers on a spreadsheet. It’s about the very essence of community. As long-term rentals vanish, a domino effect unfolds:

Sedona, with its iconic red rock formations, faces an even more acute crisis. City data indicates nearly 19% of its 6,357 housing units, a staggering 1,200 properties, are being used as short-term rentals. 2
  • Skyrocketing Costs: With supply dwindling and demand high, rental prices soar, pushing the dream of homeownership further out of reach for many.
  • Workforce Exodus: Northern Arizona Healthcare has reported losing potential employees due to the prohibitive cost and scarcity of housing.
  • Empty Desks, Empty Classrooms: Sedona Mayor Scott Jablow notes the troubling link between short-term rentals and declining school enrollment, stating that his district has seen enrollment drop by 12% 4
  • The Vulnerable Displaced: Section 8 voucher holders face near-insurmountable odds as landlords abandon the program for the higher profits of short-term rentals.

Mayor Dent’s voice cracks with emotion as he recounts the story of a woman with four children, evicted from her Section 8 home, now a vacation rental, desperately searching for a landlord willing to give her a chance. It’s a human tragedy playing out against a backdrop of economic prosperity.

The Battle for Control: Local Versus State

Mayors from Williams, Sedona, Prescott, Jerome, Flagstaff, and Cottonwood are united in their call for action, urging the state legislature to restore local control over short-term rentals.

Mayors from Williams, Sedona, Prescott, Jerome, Flagstaff, and Cottonwood are united in their call for action, urging the state legislature to restore local control over short-term rentals. They argue that a one-size-fits-all state law, passed in 2016 (ARS 9-500.39), strips them of the ability to address the unique needs of their communities. 5

“Our residents have property rights just like the owners of those mini-hotels, and yet the state legislators turned a blind eye to the very folks that came to Arizona and invested in a home,” asserts Sedona Mayor Scott Jablow. 6

Prescott Mayor Phil Goode highlights the double-edged sword: a 60% surge in short-term rental properties in his city over the past five years has generated $25 million in economic activity, but also strains city resources as public safety departments are often redirected to handle neighborhood complaints about noise and trash. 7

Yet, the state legislature remains largely unmoved, clinging to the argument that regulating short-term rentals infringes on property rights.

A Fork in the Road: Choosing a Path for the Future

Northern Arizona stands at a crossroads. The allure of tourism dollars is undeniable. Short-term rentals undeniably contribute to the economy. But at what cost? Can a community thrive when its teachers can’t afford to live there? What happens when neighborhoods become transient zones?

The answer, these mayors insist, lies in balance. It’s about finding a way to welcome visitors without sacrificing the well-being of residents. It’s about remembering that the magic of Northern Arizona isn’t just in its natural beauty, but in the people who call it home.

Sources:

1 KNAU, “As short-term rentals impact low-income housing, northern Arizona communities lobby legislature” – https://www.knau.org/arizona-news/2025-02-17/as-short-term-rentals-impact-low-income-housing-northern-arizona-communities-lobby-legislature

2 ABC15, “Sedona leaders say vacation rentals are driving a housing shortage emergency” – https://www.abc15.com/news/state/sedona-leaders-say-vacation-rentals-are-driving-a-housing-shortage-emergency

3 JackCentral, “Short-term rentals and the housing crisis: one complicated piece of a complex puzzle” – https://jackcentral.org/16894/news/short-term-rentals-and-the-housing-crisis-one-complicated-piece-of-a-complex-puzzle/

4 AZFamily, “Northern Arizona mayors look for solution to housing crisis” – https://www.azfamily.com/2025/02/21/northern-arizona-mayors-look-solution-housing-crisis/

5 Arizona Legislature, “Arizona Legislature limits on regulation of vacation rentals and short-term rentals” – https://www.azleg.gov/ars/9/00500-39.htm

6 Copper Courier, “Mayors push for local control over short-term rentals in northern Arizona” – https://coppercourier.com/mayors-push-for-local-control-over-short-term-rentals-in-northern-arizona/

7 Copper Courier, “Mayors push for local control over short-term rentals in northern Arizona” – https://coppercourier.com/mayors-push-for-local-control-over-short-term-rentals-in-northern-arizona/

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Jennifer Conrad is the Founder, CEO, and Editor-in-Chief of Arizona Ascent, a media platform more than a magazine—uniting business, real estate, and community across Arizona. She builds brands and content that people remember, turning storytelling into strategy—and strategy into measurable impact. Under her leadership, Arizona Ascent spotlights the leaders shaping Arizona’s future, positioning their work within the state’s broader momentum. Its stories don’t just inform—they elevate credibility, expand visibility, and connect leaders to the ecosystem that makes growth possible.

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