short-term rentals; vacation rentals; occupancy

SB 1261 prevents Arizona cities and towns from banning short-term or vacation rentals but allows limited local regulation. It requires rental owners to provide emergency contact information, obtain local permits (with minimal fees), notify nearby neighbors before renting, display permit numbers in ads, carry $500,000 in liability insurance, and comply with occupancy limits (max two people per bedroom plus extra for larger spaces). The bill also permits cities to restrict rentals for illegal activities like drug sales or sex offender housing, and mandates permits be processed within seven business days. This directly affects short-term rental owners, property managers, and local governments managing housing regulations.