Short-Term Rentals in Tempe, AZ: What Residents Actually Need to Know

If you live in Tempe or are thinking about moving there, short-term rentals are one of those things you probably won't think about until they affect you directly. Tempe has 10 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.

Short-Term Rental Parking Rules

Tempe holds short-term rentals to the same traffic-control laws as any home, but a vehicle parking violation at a rental only counts toward the City's three-strikes license suspension threshold if it also poses a serious threat to public health and safety.

Key details: General duty: STRs must follow traffic control laws. Parking-violation carve-out: Excluded from 3-strike count. Exception to carve-out: Serious threat to health/safety counts. Suspension cap: Up to 12 months. Same carve-out applies to: License denial, Sec. 16A-213(d)(5).

A vehicle parking violation at a short-term rental that also constitutes a serious threat to public health and safety counts toward the three-violation threshold in Section 16A-220(a)(1) that triggers a license suspension of up to 12 months, appealable under Section 16A-222; parking violations that do not rise to that level remain enforceable only under the City's ordinary traffic and parking rules, separate from the short-term rental license itself.

Host Platform Liability

Tempe's short-term rental ordinance makes it a civil offense for anyone, including a booking platform, to collect a fee for facilitating a rental that is operating illegally. Section 16A-215(d)-(e) bars payment for facilitating unlawful stays, and Section 16A-219 lets an online lodging marketplace's own sex-offender background check substitute for the owner's, without erasing the owner's liability.

Key details: Facilitation ban: No fee for facilitating an unlawful STR stay. Background check window: Within 24 hours before every stay. Record retention: 12 months, available to City on demand. Platform substitution: Marketplace check can satisfy Sec. 16A-219(a)-(b). Owner liability: Not relieved by a platform's screening failure.

Facilitating or collecting a fee on an unlicensed or otherwise unlawfully operating short-term rental is a civil offense under Section 16A-215(e), independent of any penalty against the owner. A missed or unverifiable background check under Section 16A-219 is also a civil offense, and the owner cannot point to a platform's screening failure as a defense; liability for the guest check stays with the owner regardless of what the marketplace claims to do.

Repeat Violator Strikes

Tempe can suspend a short-term rental license for up to twelve months once an owner racks up three verified violations in a year, or immediately after one serious incident like a felony or a sex offender housed on site. Section 16A-220 sets the suspension triggers, and Section 16A-221 layers escalating civil fines of up to $3,500 per violation on top.

Key details: 3-strike trigger: 3 verified violations in 12 months. 1-strike trigger: Felony, serious injury, sex offender, sober-living use. Suspension length: Up to 12 months. 1st violation fine: Up to $500 or 1 night's rent. 2nd violation fine: Up to $1,000 or 2 nights' rent.

A suspended license bars the owner from operating the short-term rental for up to twelve months. The escalating civil penalties under Section 16A-221 stack independently of a suspension: $500, or one night's rent, for a first violation; $1,000, or two nights', for a second; and $3,500, or three nights', for a third or later violation within the same twelve-month period at the same property. A suspension may be appealed under Section 16A-222.

Compared to other cities, Tempe takes a harder line on repeat violator strikes. The enforcement and penalty structure reflects that.

Night Caps

Tempe imposes NO annual or per-stay night cap on short-term rentals. Arizona Revised Statutes § 9-500.39 (SB 1350, expanded by SB 1168) preempts cities from prohibiting STRs or capping the total number of dwelling units used as vacation rentals. Stays under 30 consecutive days are taxed at the combined ~14.07% rate (6.80% city + 7.27% state/county).

Key details: Annual Night Cap: None (state-preempted). State Statute: A.R.S. § 9-500.39. STR Threshold: <30 consecutive days. Combined Tax: ~14.07% (6.80% city). Permit Required: Yes (Ch. 16A Art. X).

Because no Tempe night cap exists, there is no per-night-cap citation. Operating without the Article X license, however, can trigger license suspension for up to 12 months plus code-enforcement civil penalties, regardless of how many nights the property was rented.

Tempe is more permissive than most cities when it comes to night caps. That said, there are still limits.

Taxes & Fees

Tempe charges $250 for every short-term rental license application or annual renewal, a fee cut 25% for licenses first issued after July 1 of a given year, and conditions the license on proof of a valid state transaction privilege tax license before any booking is accepted.

Key details: Annual license fee: $250 non-refundable. Mid-year discount: 25% off if issued after July 1. TPT license: Required before renting. Renewal deadline: December 31 annually. Late penalty: Up to $1,000 per month.

Operating, advertising, or accepting a booking for a short-term rental without the $250 license or without a valid TPT license is a violation of Section 16A-213 and 16A-215; the City can impose a civil penalty of up to $1,000 per month under Section 16A-213(h) until the owner applies, and representations or online listings referencing the property's Tempe location are treated as prima facie evidence the rental is operating unlawfully.

Host Presence Rule

Tempe requires the owner of a short-term rental to actually live on the property if it contains an accessory dwelling unit whose certificate of occupancy or completion was issued on or after September 14, 2024, closing a workaround where owners rented out both the main house and a detached ADU as separate short-term listings.

Key details: Trigger date: ADU final approval on/after 9/14/2024. Grandfathered date: ADU approval on/before 9/13/2024. Requirement: Owner must reside on property. Adopting ordinance: Ord. No. O2024.52, 11-21-24. Administering officer: Financial Services Director.

Section 16A-213(f) treats any information required for a license application, which includes the facts establishing whether the residency requirement applies, as material, and a knowing failure to maintain accurate information is a civil offense. A property found operating an ADU short-term rental in violation of the post-September 2024 residency rule can also have its license denied or suspended under Sections 16A-213(d) and 16A-220, with suspension appealable to the Licensing Officer under Section 16A-222.

This is one of the stricter rules in Tempe's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Short-Term Rental Permits

Tempe requires short-term rental operators to register with the city and hold an Arizona Transaction Privilege Tax (TPT) license. Under Arizona state law, cities cannot ban STRs in residential areas but can regulate safety and nuisance aspects. Registration allows the city to contact owners in emergencies.

Key details: Code Section: Tempe City Code Ch. 16A, Art. X. State Law: AZ SB 1350 preempts outright bans. Requirements: City registration + TPT license. Local Contact: Must be designated and available. Safety: Must meet fire/building/health codes.

Operating without registration or a TPT license may result in fines. The city can issue civil penalties for violations of noise, parking, or safety requirements associated with the rental. Repeated violations may lead to suspension of the rental registration.

Noise Rules

Arizona law, not a Tempe-specific noise code, controls how far the City can go in regulating short-term rental noise. A.R.S. Section 9-500.39(B)(2) lets Tempe adopt and enforce noise and nuisance ordinances against vacation rentals, but only if the same rules are applied equally to other residential property, not singled out for STRs.

Key details: Governing law: A.R.S. § 9-500.39(B)(2), state preemption statute. Equal-treatment rule: Noise rules must match other property in same tax class. Local cross-reference: City Code § 16A-215(a) noise compliance duty. Strike counted: Only if noise is a serious safety threat. Suspension trigger: 3 verified violations in 12 months.

A noise ordinance violation at a Tempe short-term rental is enforced the same way it would be against any residence: through the City's standard noise and nuisance citation process, not a separate STR-only noise code. Where the noise problem is also a serious threat to public health and safety, it can count as one of the three verified violations in a twelve-month period that trigger a license suspension of up to twelve months under A.R.S. Section 9-500.39(D) and City Code Section 16A-220.

Tempe is more permissive than most cities when it comes to noise rules. That said, there are still limits.

Insurance Requirements

Tempe's STR license ordinance (O2023.01) and Arizona law (ARS 9-500.39) establish the framework for STR insurance. Operators should carry liability insurance as standard homeowner's policies may exclude STR activity. STR platforms provide some host protection, but personal coverage is recommended. The annual $250 license fee helps fund enforcement.

Key details: License: Tempe STR license required ($250/year). License Penalty: Up to $1,000/month without license. Homeowner's Policy: May exclude STR activity. Platform Insurance: Limited host protection available. TPT Rate: 14.07% combined.

Operating without a Tempe STR license carries penalties up to $1,000/month. Operating without proper insurance creates personal liability exposure.

Occupancy Limits

Tempe's STR licensing ordinance (O2023.01) requires compliance with residential use standards. Arizona preemption (ARS 9-500.39) limits city-specific occupancy caps. STR properties must comply with general noise, parking, and nuisance ordinances. STRs cannot be used as party houses or event venues. Neighbor notification is required when obtaining an STR license.

Key details: State Preemption: ARS 9-500.39 limits city-specific caps. Neighbor Notification: Required when obtaining STR license. License: $250/year, penalties up to $1,000/month without. Event Venues: Prohibited use for STR properties. Suspension: 3 verified violations in 12 months.

Repeat violations may result in STR license suspension for up to 12 months. Standard nuisance violations also apply.

The Bottom Line

Tempe's short-term rentals rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Tempe is broadly strict or permissive.

This guide is based on Tempe's current municipal code. Local rules can and do change, so check the individual ordinance pages for the latest details, penalties, and FAQs.