Lawsuit Against Town of Jerome Resolved

Phoenix, Ariz.—While some of America’s most-popular tourist destinations are responding to the growing popularity of “sharing economy” internet rental services like Airbnb and VRBO that connect vacationers with short-term home rentals by banning or severely restricting the practice, Arizona homeowners are now protected by a new law, SB 1350, that stops local governments from turning responsible property owners into outlaws simply because they allow paying guests to stay in their homes. Though signed only weeks ago, the effects of this law are already being felt by homeowners. Including homeowners in Jerome, Ariz., where a lawsuit against the town had been filed.

Because of SB 1350, Jerome has ended its attempt to ban vacation rentals that resulted in a legal battle with homeowners represented by the Goldwater Institute. Even though Jerome had given explicit permission to some homeowners to use their homes as vacation rentals, in 2015 town officials abruptly announced that vacation rentals violated local zoning rules. They threatened local residents with fines and even jail time if they violated the new edict.

This threat hit homeowners like Goldwater Institute client Glenn Odegard hard. In 2012, he bought an abandoned house in Jerome that had been vacant for 60 years after a landslide filled it with rocks and mud. A skilled builder, he lovingly restored it to its original historical condition so that he could rent it out to visitors. Glenn’s work was so impressive that the home was featured in Arizona Highways and visitors lined up to stay there. After Glenn invested time, money, and his own hard labor into restoring his home, the town threatened to wipe out everything he invested—even though a law banning vacation rentals had not been passed. With SB 1350 now on the books, Jerome can longer attempt to ban vacation rentals and the lawsuit is officially resolved.

“We’re glad that we were able to resolve this case and now these Jerome homeowners can continue doing what they have been for years; offering their homes to tourists that want to visit the wonderful town of Jerome,” said Jared Blanchard, a staff attorney at the Goldwater Institute representing Jerome homeowners.

“Property owners can now be assured that the use of our own buildings will no longer be subject to any potential political change that may affect laws in local jurisdictions. Entrepreneurs now have the financial courage to save, restore or create new unique lodging that was not available in the past,” said Glenn Odegard. “Had the opportunity to recoup my investment not been available, I would not have had the resources to restore my 118 year old Victorian house in Jerome that had sat vacant, abandoned and buried in mud for 60 years.”

SB 1350 not only helps homeowners in Jerome but across Arizona. Among other cities, Sedona, Prescott, and Scottsdale have either banned vacation rentals or severely restricted them. The law, sponsored by Sen. Debbie Lesko and passed with overwhelming bipartisan support, is the first of its kind in the country and ensures property use restrictions are limited to true health and safety concerns.

Read the Goldwater Institute report that laid the groundwork for SB 1350, The Property Ownership Fairness Act: Protecting Private Property Rights, here.

Read SB 1350 here.