Study Shows Short-Term Rentals Boost Yavapai County Economy

Sedona Verde Valley Association of REALTORS’ Government Affairs Director Jack Greacen provided a comprehensive overview of the data collected and answered audience questions during presentations this spring in Sedona and Prescott Valley. Although short-term rentals are often blamed for perceived local housing challenges, Greacen presented evidence of the true influence of short-term rentals in the county and how they contribute to the greater local economy.

Greacen is the founding partner and CEO of AEG Policy Advisors, a consulting firm based out of Tucson. For the past two and half years, he said, he has talked about short-term rentals across the country, where many communities are experiencing the same issues as Yavapai County.

While county residents are eager to preserve the unique character of their communities, Greacen said it’s important to recognize the necessity of adapting to market realities and the needs of these communities as it applies to STRs.

“It has been a very interesting and educational exercise,” he said. “Not just understanding how our economy has changed over the last 20 years, but more importantly, what has changed our marketplace, particularly for realtors. It’s important that everybody understands this, because it tells the story of where we’re going.”

Communities are building homes at rates lower than those of the 1990s, 1970s, or even pre-1940, Greacen said, severely limiting housing availability.

“Most communities now are at development levels below 1990, some below 1970. And one we’ve actually seen is pre-1940. When you think we may need 1,200, 1,300 or 5,000 homes in a given community, you’re not producing homes at pre-1990s, you’re producing homes at pre-1940s level. We’re not even in the same ballpark conversation,” Greacen said.

He added that the public likely has heard how short-term rentals are taking away from workforce housing. “More importantly than that, you get this opinion that corporations are coming into our backyard and buying up the homes and turning them into rentals. If you wanted to say that about Phoenix, I would tell you there’s at least some relative truth to that. When we’re talking about the rural community of Yavapai County, and I’d say the entirety of the county, there is nothing more unequivocally untrue.”

Also, Greacen said that many municipal government leaders and even state legislators in Arizona believe that short-term rentals affect workforce housing. In fact, the study shows that the spike in Yavapai County home values beginning in 2021 coincided with, and were likely spurred in part by, historically low interest rates. A similar surge in home prices during the COVID period occurred across Arizona as a whole and throughout much of the U.S. – indicating a common dynamic prevailing across markets, regardless of STR prevalence.

Education about STRs and how they affect communities is Greacen’s goal for the studies and research he is now facilitating. He is working with RRC Associates, based out of Boulder, Colorado, which he said is essentially the gold standard for economic analysis in the Mountain West, to produce studies that show municipalities how short-term rentals affect their communities and their economies.

“My goal is to put the realtor brand on a comprehensive study of what short-term rentals are, to tell communities definitively what they’re performing like, why they’re performing and what it actually means. And more importantly, to hopefully refocus most communities on the relevant conversation, which is prioritizing development,” he said.   

While acknowledging the concerns of residents and municipal leaders about the effects of STRs on a community, Greacen highlighted some relevant facts that show STRs in fact have a greater impact on area economies than may be thought, and excessive regulation can cause proven damage to those economies.   

A portion of the study showed STRs contributed substantially to the economy of Yavapai County and City of Sedona in 2023, directly or indirectly supporting 4,978 jobs and generating $721 million in economic output, $449 million in gross domestic product (GDP), and $195 million in labor income, the equivalent of 4.4% of Yavapai County’s income.

Direct visitor spending on STR Rentals was estimated at $259 million, and visitors using STRs spent an estimated $131 million at food and beverage establishments; $44 million for recreation, sightseeing and entertainment; $98 million on shopping and retail; and $52 million on local transportation.

Greacen said that studied communities across the country that have regulated or taxed STRs in various ways have said money generated would be used for affordable housing efforts. In Yavapai County, where STRs generated an estimated $2.5 million in TPT taxes and likely well in excess of $600,000 in property taxes for the county in 2023, none of those dollars appear to have been used for such housing efforts. QCBN

By Heidi Dahms Foster, QCBN

For complete findings of the study, visit the PAAR website at https://www.paar.org/2025/05/06/economic-impact-study-short-term-rentals-yavapai-county/.

Photo by Bonnie Stevens: Findings from the Economic Impact Study on Short Term Rentals (STRs) in Yavapai County reveal that short-term rentals like this one in the Village of Oak Creek support nearly 5,000 jobs and bring an estimated $131 million to the region from visitor spending on local food and beverage services alone.