Kaitlin had been 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 raise the rent on her three-bedroom house by $800 to $3,000, a 36 percent increase. For Kaitlin, who has lived alone since her sons left home, the cost of staying was prohibitive. She had invested hard-earned money in improving the property and addressing stubborn clay stains that flooded the desert monsoons from the surrounding red rocks of Sedona, Arizona. Kaitlin, who asked for anonymity to protect her pending lease applications, was distraught to leave the property she’d made her own. But she was not alone. Rents soared all over Sedona, fueled by a new kind of Airbnb gold rush.
For years, short-term rental companies like Airbnb have been tearing cities apart. Some, like Mexico City, have embraced the rental platform to attract tourists and digital nomads. Others, such as Amsterdam and London, have taken steps to restrict or ban the platform, citing concerns over overtourism; pressure on the housing stock; or in the case of Toronto, the rise of Airbnb ‘ghost hotels’.
Three years after the pandemic, in which flexible working has become the new normal for many and the supply of rental properties in the cities is taking longer to recover, short-term rental entrepreneurs have shifted their focus from major cities to tourist-friendly towns and resort destinations. And Sedona, a small town nestled among dramatic crimson rock formations in central Arizona, is one of the hardest hit. “Everyone wanted to go to those markets,” said Jamie Lane, vice president of research at AirDNA, a short-term rental analytics company. And with the flood of outsiders coming in, locals like Kaitlin are being forced to leave.
Sedona banned short-term rentals as far back as 1995. But in 2017, an Arizona state law, SB1350, blocked such curbs. Lawmakers had envisioned the bill as an embrace of the new sharing economy and a boon to Arizona residents who wanted to make some extra cash by renting out their spare rooms. But when the law was passed, investors flooded the market. More than 15 percent of available homes in Sedona are now on short-term rental sites such as Airbnb or Vrbo, according to a 2021 study by local firm Elliott Packer & Co. As in many cities around the world, home prices in Sedona rose during the pandemic: The average price for a single-family home rose 64 percent over a two-year period from October 2020 to 2022. more common, says Shannon Boone, housing manager for the City of Sedona. Camping on the outskirts of town as a way of life – not for vacation – damages the pristine national forest that surrounds it.
Tourists flock to Sedona for its breathtaking vistas and hiking trails, and the city has made a name for itself as a New Age spiritual heartland of the American West. Along the main road, healing centers and crystal shops are tucked away between bars and restaurants. “Tourism will always be our economic engine, whether we like it or not,” said Sandy Moriarty, the former mayor of Sedona. But those tourists are increasingly strangling the life of a city that depends on them for its survival.
“Airbnb has doubled the amount of tourism here, which means more labor is needed, and at the same time there is less housing 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 a housing shortage, everyone ends up competing for the same small pool of rental properties. And in Sedona, more and more of these rentals are now Airbnbs.
