A Message From Our President

On March 16, a professional-quality 4-minute video by Board Chairman Rich Sherman was announced and made available on YouTube.com. Major points in the video include:

• Desert Mountain will be affected by the growth of short-term rentals.
• Homes used for short-term rentals are commercial buildings.
• Short term rentals could change DM into a resort.
• Other communities like DM restrict home rentals to a 30-day minimum.
• Rent restrictions will make DM less attractive to investors.
• Some DM owners have been disturbed by short-term tenants.
• Rent restrictions will limit the number of outsiders at DM.
• Management has a plan to limit losses of those who rent for less than 30 days.

Notice that DMMA management has changed its tune, abandoning claims of “year-round party houses”, “365 occupants in the house next door”, “a carousel of short-stay renters”. DMMA is getting better PR advice. Scare tactics ring hollow with most DM owners. There’s no mention in the Sherman video of the never-enforced Scottsdale ordinance. Gone too is the false claim that 78% of all DM owners favor rent restrictions. Here’s what’s still in the DMMA media campaign promoting rent restrictions.

RS: Desert Mountain is becoming increasingly vulnerable to a recent economic trend – growth of short-term rentals in residential communities.

DMHOC: Through research conducted by the appointed DMMA Dings Committee, there is no factual information to show that Desert Mountain is vulnerable to an increase in the number of rental properties available in Desert Mountain.

RS: A home used for frequent short rentals can be classified as a commercial establishment and should be operated in an area zoned for transient populations. Under those conditions the home also needs to comply with fire and safety codes of local municipalities for hotels and motels and is expected to contribute a bed tax to the city.

DMHOC: Mr. Sherman is confused on this issue. Desert Mountain is zoned as residential. Single family rental properties, and in some cases, multi-family rental properties such as duplexes, are considered residential under state and municipal statute. Many owners who rent have opted to classify their homes with Maricopa County as a “Residential Rental”. The sole purpose of registering a rental property with the county is that an Arizona State statute exists that requires registration in order to provide enforcement against vacant homes and absentee landlords. There are no building code requirements that exist in Arizona that differ between residential property and residential rental properties. Additionally, there are no provisions in city code that would convert a private residence to a commercial property solely because of residential rental activities.

Owners who rent are also not tax evaders as no tax is due for a residential rental. The Scottsdale Tax Guidance for Rental of Real Property and Scottsdale Tax Guidance for Hotels & Motels are included for review.

RS: Presence of short term rentals in a community can change the character of a neighborhood from family-oriented to tourist-oriented. Growth of short term rental properties at Desert Mountain could change our quiet, secure, private setting into a resort-like environment. We don’t want that to happen here.

DMHOC: While individual perception is difficult to counter, many resources on this website illustrate the benefits of short term rentals within the Desert Mountain community overall. While there is clear evidence that short term rentals do translate into home and membership sales, there is no evidence to support the notion that exchanges translate into home and membership sales. Home exchanges are for the express purpose of vacationing. If anything has the potential to turn Desert Mountain into a resort-like environment, it is home exchanges. If the proposed amendment passes, home exchanges will be allowed in unlimited numbers for a minimum of 7 days at a time.

RS: Other similar high-end private communities that compete with Desert Mountain restrict home rentals today to no less than 30 days. Restrictions on short term rentals make it less attractive for investors to purchase a home solely to rent out.

DMHOC: There is no indication that surrounding communities in Scottsdale, other than Silverleaf, Estancia,and Desert Highlands have a rental restriction that is being enforced to some degree. However, it is important to note these communities have had the restriction in their provisions from the formation of the community to protect real estate volume. Currently Estancia and Desert Highlands have a robust online inventory of homes available for rental.

Desert Mountain owners who rent indicated that renting only helps to offset SOME of the costs that may be associated with maintenance and membership costs. There is no evidence here that investors are flocking to Desert Mountain for the express purpose of buying up homes to rent out and make a profit. Clear evidence of this is that fact that property values are barely maintaining, and more likely to be continuing to decline.

If there was a true investment opportunity here for those wishing to rent homes out in Desert Mountain and make money, we would all feel much better about the state of our current property values.

RS: DMMA has also been approached by owners who have been disturbed by people occupying a nearby home as a short-term rental. The number may not be excessive today. But we don’t want those issues to increase in the future.

DMHOC: Of the 154 known rentals, we can assume those homes have at least 300, if not 400 neighbors. The Dings committee seemingly had the most trouble digging up those neighbors out of all the groups within the community they interviewed. Only a handful of complaints over a historical period of reference that could be as much as 20 or more years of living in Desert Mountain were found. The security data validates this point.

The Committee researched over 5 years of security calls and found that security was dispatched to rental properties only 4% of the time versus 96% to non-rental properties. Rental Properties are 8% of the total home population which means the frequency of calls to rental properties is half that to non-rental properties. Furthermore, security is unable to determine if the call was a result of an issue or behavior of the Owner themselves, their guest, or a renter.

Additionally, our CC&Rs allow for remedies against those Owners who are renting to bad tenants.

Rather than complain about un-neighborly neighbors at Desert Mountain, why doesn’t the Board do something. Our CC&Rs give the Board authority to hold owners responsible for disturbances. Why isn’t the Board doing that?

RS: The time to act is now. DMMA has proposed an amendment to our CC&Rs that will limit short term rentals. Only HOA and Club members could access rental properties for less than 30 days. People not connected to our owners, our Club members, would need to rent for a minimum of 30 days. That will limit the number of outsiders in our private community. Home exchange transactions will need to be for at least 7 days.

DMHOC: The time to act is now – we don’t disagree.

RS: Many owners at Desert Mountain rent their properties for at least 30 days. Those people won’t be affected by the 30-day minimum. And to mitigate the financial impact on those who rent for less than 30 days, we are considering ways to match those homes with association and club members who need to accommodate family and friends for short visits.

DMHOC: The majority of Owners who rent in Desert Mountain have minimum stays averaging 6-7 nights. This is a far cry from the inference that the majority are renting for more than 30 days. Most importantly, the Board has failed to produce these “programs” they are referring to loosely which include a rental match program or a robust rental/renter registration program.

RS: The amendment is designed to protect property values, maintain our secure and private lifestyle and build the brand of our exceptional community.

DMHOC: The committee was unable to find a correlation between property values and the availability of short term rentals in Desert Mountain. Their First Email Blast and
The Dings Committee Report both indicate that. Additionally, the security findings do not indicate a security issue of any kind. Finally, please see our Commentary on the Club, which endorses short term rentals and facilitates guest pass use to short term renters.
If we are concerned about building a brand, we are doing it with clear recognition from the Club that short term rentals are a feeder group for membership sales.

We are asking for your support of our proposed amendment.

DMHOC: Email your Objection Here by 27 April, 2018