Daily Regulatory Notes 01/20/2026
Cities address STRs. Arizona files bill; Colorado introduces bill; Sandpoint, ID schedules public hearing; Carmel, IN proposes new hotel tax; Arroyo Grande, CA delays increased transient occupancy tax; Marathon, FL weighs vacation rental increase; Tybee Island, GA; New York City, NY. READ MORE.
Arizona
Arizona Senate Majority Leader John Kavanagh has pre-filed Senate Bill 1105, which would allow cities and counties to prohibit accessory dwelling units from being used as short-term or vacation rentals.
Read: Senate bill 1105
Kavanagh says ADUs should address the state’s housing shortage rather than operate as de facto hotel rooms in single-family neighborhoods. He argues that allowing ADUs to function as short-term rentals does not increase housing supply or affordability.
Arizona bill seeks to restrict ADUs as short-term rentals (The Center Square) – A new bill would limit how Arizonans can use additional dwelling units on their property. Senate Majority Leader John Kavanagh, R-Fountain Hills, recently pre-filed Senate B...https://t.co/wbx08UG1gw
— The Black Chronicle (@BlackChron) January 19, 2026
Colorado
Colorado lawmakers have introduced HB 36, which would let local governments ask voters to approve vacancy taxes on homes left empty for much of the year to fund affordable housing.
The bill gives cities and counties explicit authority to levy the tax but excludes short-term rentals from being classified as vacant. The bill is headed to House Finance Committee.
Sandpoint City Council will hold public hearings Wednesday on proposed changes to its short-term rental code including removing the citywide 35-unit cap on non-owner-occupied STRs in residential zones.
City officials say the cap must be eliminated to comply with Idaho state law and a recent Idaho Supreme Court ruling that allows regulation but not outright prohibition of STRs. In place of the cap, the city would introduce stricter occupancy and parking rules, including a permit review process for high-occupancy rentals.
CasaVoya has announced an exclusive partnership with Directo that makes it the only “preferred” vacation rental platform surfaced to Directo users searching for New York City stays on Airbnb and other OTAs.
The partnership targets demand created by New York City’s short-term rental restrictions, which have largely eliminated whole-home listings from major platforms.
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Carmel is seeking state approval under SB-242 to impose a new flat $5-per-night hotel tax to fund local tourism and development projects, including a planned hotel and conference center district.
The fee would be added on top of existing county and state taxes, with 100% of the revenue retained by the city. City leaders argue the tax would allow Carmel to fund tourism initiatives independently, since nearly half of Hamilton County’s hotel rooms are located there.
Arroyo Grande City Council is delaying any increase to its transient occupancy tax despite general support for raising the rate.
Arroyo Grande Transient Occupancy Tax
Council members discussed keeping the current 10% tax or pursuing a 1%–2% increase but opted not to place a measure on the 2026 ballot due to economic conditions and competing county tax proposals. Officials noted the city’s TOT has remained unchanged for more than 25 years and remains among the lowest in San Luis Obispo County.
Marathon officials are weighing a significant increase in vacation rental license fees as their primary tool to address rental-related costs under state law.
The proposal would raise annual fees based on bedroom count, with city staff citing enforcement, legal, parks, and emergency services expenses as justification. Rental owners urged the council to consider the economic and tax benefits rentals bring before final action next month.
Tybee Island’s sweeping restrictions on short-term rentals are under judicial review as the city heads into its busiest travel season.
Property owners are challenging the city’s ban on new residential STR permits and certain fees, arguing they conflict with Georgia law and undermine the local economy.
🐦 Tweet Highlights: Catch the latest discussions on X
The Maui County Council approved a resolution to begin reviewing proposed H-3 and H-4 hotel zoning districts related to the phased ban on vacation rentals in apartment zones. The measure now heads to planning commissions. Read the full story: https://t.co/M85gqyZu5Z
— Aloha State Daily (@alohastatedaily) January 20, 2026
A proposal to restrict where short-term rentals can be located in Harrison Township is dividing residents. https://t.co/0rfzXkTpBu
— Local 4 WDIV Detroit (@Local4News) January 19, 2026
Kane County Board OKs rules on short-term home rentals, but some members eye total ban https://t.co/dtluxQnTS5
— The Courier-News (@couriernews) January 17, 2026
In case you missed it:
Genelaine Urbano
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