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Sedona Grand LLC v. City of Sedona

November 11, 2014

Just six years ago, Arizonans enacted one of the nation’s strongest protections for property rights, Proposition 207, which says the government must compensate you when its regulations diminish your property’s value. But that protection is under attack, because the government is realizing just how expensive these burdens can be when it actually has to pay for the consequences of its regulations. So it is unsurprising that since Prop 207’s inception, cities across Arizona have been doing their best to avoid paying the high price.

The latest attempt comes from the City of Sedona, which made it a crime to rent residential property for fewer than 30 days, and the city defines “rent” very broadly. This means property owners are subject to punishments of up to six months in jail and/or a $2,500 fine for engaging in a wide range of activities, including purchasing a time share, contracting for home improvements, and even hiring a babysitter!

Attempting to avoid Prop 207 liability, the city tried to masquerade the ordinance as a “health and safety” regulation, which is exempted from Prop 207. But the court of appeals saw through the façade and ruled that the city can’t avoid Prop 207 by merely claiming to advance public health without offering any evidence that the regulation actually does so. On the taxpayers’ dime, Sedona is challenging that decision in the Arizona Supreme Court.

The Goldwater Institute, which has long defended property owners from government attempts to dilute or evade Prop 207, has filed a brief in support of Sedona property owners. A victory would force cities to stop wasting taxpayer resources trying to skirt the rules and start respecting their citizens’ rights.



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