Arizona Cities Push Ballot Measure to Reclaim Rental Control

A group of Arizona cities is lobbying state lawmakers to send a ballot measure to voters next year that would unwind the state's 2016 law barring municipalities from banning or tightly restricting short-term rentals. The legislature convenes in January 2026, and if a referral clears both chambers before the session ends, the question would go before voters on the November 2026 ballot. For hosts and property managers operating in Arizona, that means the current statewide floor on rental rules could become a local patchwork again, city by city, if the measure both qualifies and passes.

The 2016 law cities want gone

Arizona's legislature passed SB1350 in 2016, stripping cities and towns of the power to prohibit short-term rentals or cap how many operate within their limits. Municipalities were left with narrower tools: they could require registration, collect transaction taxes, and enforce noise, parking and nuisance ordinances, but they could not zone rentals out of neighborhoods or set hard caps on permits. A 2022 follow-up law gave cities slightly more room, including the ability to revoke a permit after repeated verified violations and to cap advertised occupancy, but it stopped short of restoring local control over whether rentals are allowed at all.

What a ballot referral would actually change

Because the preemption sits in state statute, only the legislature or a statewide vote can undo it. A legislative ballot referral lets lawmakers put that question directly to voters, sidestepping the need to build a repeal bill that a preemption-friendly legislature has resisted in past sessions. Cities involved in the push have pointed to complaints common in tourist-heavy towns: short-term rentals operating as unlicensed event venues, concentration of investor-owned units in single neighborhoods, and limited ability to shut down repeat offenders quickly. Getting a measure onto the 2026 ballot requires majority approval in both the Arizona House and Senate before the session adjourns, typically by late spring.

What this means for operators right now

Nothing changes immediately. Arizona's existing rules on registration, taxation and permit revocation still apply, and any shift in local authority would not take effect unless a referral passes the legislature this session and then wins voter approval next November. Hosts in markets like Sedona, Scottsdale and Flagstaff, where local officials have pushed hardest for more control, should expect this fight to resurface in committee hearings through the spring. Operators elsewhere in the state have less immediate reason to worry, but the outcome will set a precedent other states with similar preemption laws are likely to watch.

This is not the first attempt by Arizona municipalities to claw back authority over rentals, and a Republican-controlled legislature has been reluctant to hand that power back in previous sessions. A ballot referral gives cities a path that does not depend on winning over those same lawmakers on the merits of a repeal bill, only on getting the question in front of voters. Whether that changes the outcome is untested.