Sedona planning board advances limits on new hotel and short-term rental projects to ease traffic congestion and protect Red Rock corridor

Sedona’s Planning and Zoning Commission advanced a proposed ordinance Tuesday that would limit new hotel and short-term rental developments along key corridors leading into the city’s Red Rock area. Officials said the measures aim to reduce traffic congestion and protect scenic resources while managing tourism-driven growth.

The Sedona Planning and Zoning Commission’s proposed ordinance would impose new restrictions on hotel and short-term rental developments specifically along corridors leading into the Red Rock area, a move designed to address traffic congestion and protect the city’s scenic resources, officials said Tuesday. The ordinance advances existing city regulations, including the short-term rental permit regime that took effect Feb. 15, 2023, and land-use controls in the Sedona Land Development Code, which currently regulate lodging locations and commercial uses, according to city records.

Because Arizona state law prohibits municipalities from banning or capping the total number of short-term rentals citywide, the commission’s focus is on controlling the location, use, and intensity of such developments rather than imposing a blanket numerical limit, sources confirmed.

The proposed measures are part of a broader strategy to manage tourism-driven growth and its impact on transportation and the Red Rock corridor, not an effort to eliminate existing legally established lodging uses, city officials said.

The ordinance now moves to the Sedona City Council for further hearings, possible amendments, and a final vote, according to the city’s legislative process. The council has the ultimate authority to adopt or reject the proposal.

Sedona’s short-term rental regulations require every rental property to hold an annual city permit and an Arizona Transaction Privilege Tax license, with violations treated as offenses. Permit applications must include the property’s physical address, owner contact information, emergency contacts, proof of tax license, and compliance acknowledgments, all of which are publicly available, city documents show. The city also maintains a 24/7 complaint hotline at 928-203-5110 for short-term rental-related incidents.

Recent amendments approved by the Sedona City Council on March 25, 2025, further tightened short-term rental rules. These include requiring a permit for each rental unit, prohibiting advertising rentals for special events such as weddings or retreats, and restricting accessory dwelling units from being used as rentals unless the primary residence is owner-occupied. Units with certificates of occupancy issued before Sept. 14, 2024, are grandfathered under these rules, according to the council’s resolution 2024-37 and city code sections 5.25.030 and 5.25.050.

The city has linked lodging and short-term rental regulations to protecting “health, safety, and general welfare” and managing land use consistent with zoning powers. A 2024 city council resolution formally requests that the Arizona Legislature restore local authority to impose “reasonable zoning restrictions on short-term rentals, including limitations on the number and location of short-term rentals,” citing concerns about density and community impacts. The resolution emphasizes zoning as a fundamental tool to safeguard residents and natural resources, including Sedona’s iconic Red Rock landscape, which is central to the local economy and character.

Traffic congestion concerns are a key driver behind the proposed limits. City officials regularly cite tourism-related lodging growth as a significant contributor to traffic issues along the Red Rock corridor, and regulating the location and scale of hotels and short-term rentals is seen as a necessary step in corridor planning and infrastructure management.

Hotels and commercial lodging are treated distinctly from short-term rentals in Sedona’s regulatory framework. Hotels do not require short-term rental permits but are subject to zoning and development standards under the Sedona Land Development Code. Because hotels are concentrated in specific commercial and lodging districts, the planning board’s proposed limits can be applied through zoning overlays or corridor standards without conflicting with state pre-emption statutes, city planners said. These zoning controls also serve traditional purposes such as mitigating traffic, protecting scenic views, and managing environmental impacts.

The city’s existing short-term rental framework requires operators to comply with occupancy limits based on bedroom count and septic or sewer capacity, typically calculated as two guests per bedroom plus two additional guests. Violations of these limits are subject to enforcement, officials said. Short-term rentals are also prohibited from being used or advertised for special events, a rule extended in the 2025 code amendments.

The legal backdrop shaped by state law pre-emption restricts Sedona’s ability to impose numerical caps on short-term rentals. Until the legislature grants expanded local control, the city relies on per-unit permitting, operational rules, and zoning classifications to indirectly manage the concentration and impact of rentals. The planning board’s ordinance reflects this approach by focusing on location and intensity restrictions rather than outright bans or caps.

Questions about short-term rental permitting and enforcement are handled by Teresah Arthur, Sedona’s short-term rental specialist, who can be reached at [email protected] or (928) 203-5198. The city’s enforcement infrastructure, including the 24/7 complaint hotline, is expected to support any new limits adopted following the planning board’s action.

The planning board’s proposal is the latest step in Sedona’s ongoing efforts to balance tourism-driven growth with the preservation of its natural environment and community quality of life. The City Council will hold future hearings to consider the ordinance before making a final decision.