Kaitlin had lived in the village of Oak Creek for over two years when she was fired. It was June 2022 and her landlord had decided to increase the rent on her three-bedroom house by $800 to $3,000, a 36 percent increase. For Kaitlin, who has been living alone since her sons moved out, the living expenses were prohibitive. She had invested hard-earned money improving the property, cleaning up stubborn clay stains that the desert monsoons had washed in from the surrounding red rocks of Sedona, Arizona. Kaitlin, who asked for anonymity to protect her pending rental applications, was dismayed to leave the property she had made her own. But she wasn’t alone. Rents were skyrocketing across Sedona — and a new breed of Airbnb gold rush was to blame.
Short-term renters like Airbnb have been sweeping through the cities for years. Some, like Mexico City, have embraced the rental platform to attract tourists and digital nomads. Others, like Amsterdam and London, have moved to restrict or ban the platform, citing concerns about excessive tourism; burdens on housing supply; or in the case of Toronto, the rise of Airbnb’s “ghost hotels.”
Three years on from the pandemic, when flexible working has become the new normal for many and urban rental offers are taking longer to recover, short-term renters have shifted their focus from big cities to tourist-friendly towns and holiday destinations. And Sedona, a small town tucked among dramatic crimson rock formations in central Arizona, is among the worst-hit. “Everyone wanted to go into these markets,” says Jamie Lane, vice president of research at AirDNA, a short-term rental analytics company. And with the flood of outsiders, local residents like Kaitlin are being driven out.
Sedona banned short-term rentals back in 1995. But in 2017, an Arizona state statute, SB1350, blocked such curbs. Lawmakers had pitched the law as an embrace of the new sharing economy and a boon to Arizona residents looking to earn some extra money by renting out their vacant bedrooms. But when the law passed, investors flooded the market. More than 15 percent of available apartments in Sedona are now listed on short-term rental sites like 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 sharply during the pandemic: The median price for a single-family home rose 64 percent over a two-year period from October 2020 to 2022. Stories of people living without cars are becoming more common, says Shannon Boone, the city of Sedona’s housing manager. Camping on the outskirts of town as a way of life – not as a vacation – harms the pristine national forest that surrounds it.
Tourists flock to Sedona for its breathtaking views and hiking trails, and the city has made a name for itself as the New Age spiritual heartland of the American West. Healing centers and crystal shops line the main street between bars and restaurants. “Tourism will always be our economic engine, whether we like it or not,” said Sandy Moriarty, former mayor of Sedona. But these tourists are increasingly strangling the life of a city that depends on them for its survival.
“Airbnb has made it possible to double tourism here, which means more labor is needed, while also reducing available accommodations,” says Boone. It’s a brutal combination. More tourists mean more money and more job opportunities in Sedona’s hospitality and entertainment industries. But since housing is scarce, everyone ends up competing for the same tiny pool of rental properties. And in Sedona, more and more of those places are Airbnbs.