Rim Country Real Estate Gains National Spotlight in the Wall Street Journal
By Dennis Riccio, President, Central Arizona Association of REALTORS®
Recently, CAAR has received calls from members regarding short-term rentals in Rim Country, particularly about the new Gila County ordinance that took effect earlier this year. Agents have reported that their clients recently received compliance notices in the mail and were caught off guard, unsure whether the letters were legitimate or even applicable to their properties. In light of these concerns, and to help ensure our members and their clients stay informed, I wanted to take a closer look at the current landscape of short-term rental regulations throughout Gila County and the surrounding communities.
In May 2025, the Gila County Board of Supervisors approved a new Vacation Rental and Short-Term Rental Ordinance (No. 2025-01) aimed at better regulating short-term rentals (STRs) in unincorporated areas. This county ordinance requires every dwelling offered as an STR (rentals of less than 30 days) in unincorporated Gila County, including communities like Pine, Strawberry, Christopher Creek, Star Valley, and unincorporated Happy Jack, to obtain an annual County permit. Owners must apply through Gila County’s Community Development Department and pay a $225 yearly fee for each rental property. Operating a vacation rental without a county permit is now unlawful, with enforcement handled by a dedicated code compliance officer funded by these fees.
Under the ordinance, STR owners must also follow new rules designed to address common neighborhood complaints. For example, Gila County’s regulations set occupancy limits (generally no more than 2 adults per bedroom), require providing a local 24/7 emergency contact, and even mandate posting a floor plan and safety information at the property. Neighbor notification is also required: before renting an STR for the first time under the new law, owners must notify all adjacent neighbors in writing with their permit number and emergency contact details. Special event uses (parties, weddings, etc. that would normally need a separate permit) are explicitly prohibited at STRs. These measures are meant to protect public safety and neighborhood peace while still allowing rentals to operate.
Enforcement of the new rules is ramping up. Gila County Code Enforcement will investigate STRs operating illegally or causing issues. If a violation is found (for instance, an STR operating with no permit or violating occupancy rules), the County issues a formal Notice and Order to Comply, essentially a compliance letter giving the owner 30 days to correct the issue. This notice is mailed to the property owner and outlines what must be done (such as obtaining the permit or ceasing an unauthorized use) to avoid penalties. If the owner fails to comply within 30 days, a hearing is scheduled and fines can follow. The County may ultimately revoke an STR’s permit after three significant violations of the ordinance, effectively barring that property from being used as a short-term rental. These enforcement steps are a notable change. For the first time, Rim Country STR owners face direct local oversight, with compliance notices and potential fines pushing them to meet new standards.
It’s worth noting that the incorporated towns in Rim Country have their own parallel STR requirements. The Town of Payson, for example, now mandates a Town STR License for any short-term rental within town limits, in addition to the county permit if applicable. Payson’s town code (updated after recent state law changes) makes it unlawful to operate an STR inside Payson without first obtaining this local license. The town’s program also includes safety inspections (e.g. fire department checks) and neighbor-notification rules similar to the county’s. Small municipalities like Star Valley are subject to the same state laws and have generally allowed STRs under those state guidelines; as of this writing Star Valley has not enacted a separate STR ordinance, so STRs there fall under either county rules (for any areas of Star Valley not covered by its own code) or default state law. In summary, all STR owners in Rim Country must pay close attention to the jurisdiction their property falls under. Unincorporated areas now have strict Gila County permitting requirements, while the Town of Payson (and most likely other incorporated towns) require their own local STR licenses and adherence to the new regulations and state law. Non-compliance can result in warning letters, fines, or even a revocation of the right to operate the rental, so Realtors and property owners alike should ensure these permits and rules are in order.
Layered on top of government regulations, many homeowners associations (HOAs) and neighborhood covenants in Rim Country impose their own restrictions on short-term rentals. These private rules can be even more stringent, and they vary by community. It’s critical to know the specific covenants if you’re dealing in a particular subdivision, as HOA rules can limit or outright prohibit STRs regardless of what county or state law allows. Below is a brief overview of key STR-related rules in several Rim Country communities:
Chaparral Pines (Payson) – This gated golf community’s HOA rules require long-term leasing only. The Association’s formal rental policy (adopted in 1998 and amended in 2010) prohibits any lease shorter than ninety (90) days[15]. In other words, short-term vacation rentals (weekends, weekly, etc.) are not allowed in Chaparral Pines. Any rental must be for at least three months, and the entire home must be rented (no room-by-room or timeshare-style rentals). The HOA also requires owners to provide the Association with a copy of the lease and proof that the tenants were given the HOA’s rules, among other compliance steps. Enforcement is strict. Chaparral Pines aggressively fines violations of the 90-day minimum rule. Advertising a home in Chaparral Pines as a short-term rental (on Airbnb, VRBO, etc.) is treated as evidence of a violation and can trigger heavy fines (starting around $1,500 and escalating to $5,000 per offense). Essentially, Chaparral Pines homes cannot be used as vacation rentals; the HOA covenants limit owners to longer-term tenants or personal/family use only.
The Rim Golf Club (Payson) – The Rim Club, another upscale gated community adjacent to Chaparral Pines, has a similar approach. Short-term rentals are generally not permitted by the Rim Club’s rules. The development is zoned and intended for owner-occupied or long-term residency, and the community’s guidelines reflect that: any owner who rents out their home must use a long-term lease, typically ranging from 3 to 12 months. In practice, this means nightly or weekly vacation rentals (Airbnb-style) are banned in the Rim Club, and even monthly rentals shorter than 3 months would violate the spirit of the HOA rules. These restrictions help maintain the Rim Club’s exclusive residential character. As one local explanation puts it, short-term vacation rentals (e.g. Airbnb) are not allowed; The Rim is strictly for full-time residents or long-term renters[19]. Realtors should be aware that when marketing Rim Golf Club properties, they cannot be pitched as Airbnb income properties (Golf Villas with Rental Privileges are excepted). Any rental must be a true long-term tenancy of several months or more, subject to the HOA’s approval processes.
See Canyon / Christopher Creek Area – In the small See Canyon community near Christopher Creek, the covenants prohibit rentals outright. See Canyon’s CC&Rs (Covenants, Conditions & Restrictions) do not allow any leasing of homes, whether short-term or long-term. This is a rather strict covenant intended to preserve a quiet, owner-occupied cabin community. In practical terms, if you purchase a cabin in See Canyon, you cannot rent it out at all, not even for a year lease to someone else. See Canyon’s ban on rentals is an example of how some rural neighborhood associations have taken a firm stance against both transient use and absentee landlords. While the County or state would technically allow an STR with a permit, the HOA covenant in this area overrides your ability to do so on private property, and the County will not intervene in HOA enforcement of such a ban. So, any See Canyon property owner attempting even a weekend rental could face legal action from the HOA or neighbors under the CC&Rs. This is a crucial point of due diligence: always verify the CC&Rs, because communities like See Canyon absolutely forbid rentals despite broader laws that permit STRs elsewhere.
THE PORTALS I–IV (PINE)
The Portal neighborhoods (I, II, III, and IV) in Pine Creek Canyon are a prime example of varying HOA policies on rentals. The Portal communities in Pine each have their own homeowners associations and rental policies, and the differences between them are significant.
Portals I & II (which share an HOA and rules) have a strict leasing clause in their CC&Rs: an owner may lease out their home no more than twice in any calendar year, and each lease must be for a minimum of six months. In effect, Portals I & II require 6+ month leases and limit turnover to at most two tenants per year, a clear prohibition on nightly/weekly rentals. Additionally, the Portals I & II HOA requires owners to submit a renter information form and a crime-free addendum for any lease, ensuring the association is aware of any tenants.
Portal III (a separate HOA up the canyon) has comparable rules. The HOA governing Portal III also mandates a minimum rental term of at least six months for any lease. A recent summary of the community notes that Portal III’s homes are “long-term renting only,” with 6+ months minimum lease periods just like the other Portals. This effectively bars short-term vacation rentals in Portal III as well. While Portal III’s CC&Rs don’t explicitly cap the number of leases per year in the text we have, practically a minimum six-month term means an owner could only do at most two rentals a year anyway. All Portals require that the entire home is rented (no room-by-room STRs), and sub-leasing or nightly stays are not allowed under HOA rules.
Portal IV, however, stands apart. Its CC&Rs contain no prohibition on short-term rentals, and there is no minimum rental term. The subdivision is managed separately from the earlier Portals and maintains a more flexible approach toward property use. As long as owners comply with Gila County’s and state regulations, short-term vacation rentals are permitted within Portal IV.
This is reflected not only in the governing documents but also in practice. Several Portal IV homes are currently listed on Airbnb and other short-term rental platforms, confirming that the HOA does not restrict or prohibit such use.
In short, while Portals I–III are long-term residential communities that disallow STRs, Portal IV permits short-term vacation rentals subject to compliance with local ordinances and general HOA rules regarding safety, road use, and maintenance.
In summary, many of Rim Country’s most prominent neighborhoods have private rules that severely restrict or forbid short-term rentals. Chaparral Pines and The Rim Club require at least 90-day leases; the Portals I-II require 6-month minimum leases; and See Canyon bans rentals entirely. These HOA or CC&R restrictions are enforceable by the associations and by affected neighbors, and they supersede what general law allows on paper. The Gila County STR ordinance even advises owners to check any HOA or deed restrictions, because compliance with those private rules is the owner’s responsibility. For CAAR members, this means when dealing with a property sale or rental management in these communities, you must inform clients about these restrictions. An investor who hopes to run a vacation rental in Rim Country might need to avoid these particular subdivisions, whereas a homebuyer seeking peace and quiet might actually value the existence of such rules. Always review the latest CC&Rs and HOA policies, as they can differ widely from one neighborhood to the next. Rim Country is a patchwork of different rules depending on where you are.
Arizona’s approach to short-term rental regulation has shifted significantly over the past decade, moving from a very laissez-faire stance to a gradually more controlled framework. Historically, local governments in Arizona had the authority to regulate or even ban vacation rentals (for example, some cities treated them as illegal hotel operations in residential zones). That changed in 2016 with the passage of Senate Bill 1350 – a state law that largely preempted cities, towns, and counties from banning or restricting short-term rentals. SB 1350 (often dubbed Arizona’s “Airbnb law”) prohibited municipalities from enacting ordinances that targeted STR use, except for narrowly-defined health and safety concerns. The law was championed by then-Governor Doug Ducey as a way to spur tourism and property rights; Ducey touted the new law as opening doors for the short-term rental market statewide. In effect, from 2016 onward, places like Payson or Gila County could no longer outlaw STRs. Local governments were forced to allow vacation rentals in residential areas, treating them much like any other home. This state preemption is why, for several years, the only rules governing STRs were minimal (e.g. basic tax/licensing obligations and standard safety codes), and why many Arizona neighborhoods saw a surge of Airbnbs with little local oversight.
However, as the short-term rental industry boomed, public backlash grew in many communities across Arizona. Popular destinations like Sedona and Scottsdale experienced a flood of vacation rentals, which local residents blamed for noise, trash, parking problems, and a loss of affordable housing for locals. By the late 2010s, it was clear that completely unregulated STRs were “impacting the fabric of communities,” as neighborhood advocates put it. In response, the state legislature started to revisit the strict preemption it had in place. Incremental changes were made: a 2018 amendment to the law allowed cities to require STR owners to provide emergency contact information to law enforcement, and to enforce existing nuisance ordinances (so if an STR house was the site of repeated criminal complaints or loud parties, some action could be taken). Further momentum came in 2019 and 2021, as complaints continued. Even Governor Ducey, who had signed SB 1350, acknowledged that lawmakers should “revisit” the issue as neighborhoods raised concerns.
The most significant shift came in 2022 with the passage of Senate Bill 1168. SB 1168 (signed by Governor Ducey in July 2022) granted cities, towns, and counties more explicit authority to regulate short-term rentals within certain limits. It permitted local governments to create STR licensing or permitting programs, to require owners to provide proof of liability insurance, and to enforce occupancy limits (such as the “two adults per bedroom” rule) for safety. The law still forbids outright bans on STRs, but it gives local officials tools to address the worst problems. For example, under SB 1168, a city can suspend an STR owner’s license if they have multiple verified violations (noise, trash, etc.), and can fine owners for failing to register or for emergency response costs. Gila County’s 2025 ordinance is directly enabled by these state-level changes. The County is using the new powers granted by the legislature to implement a permit system and stricter oversight (something that would have been illegal for the County to do a few years ago). Similarly, the Town of Payson’s new STR licensing requirements were implemented pursuant to this 2022 law change, which finally allowed towns to require a license and compliance from STRs.
It’s important to note that Arizona still maintains a generally STR-friendly legal stance compared to some other states. The core property rights philosophy (“It’s your property, you should be able to do what you want,” as one state legislator famously said) remains influential. Many proposed bills to severely tighten STR rules have failed in the state legislature in recent years. As of 2025, local governments cannot forbid short-term rentals outright. They can only regulate them in the ways the state has authorized (permit programs, nuisance enforcement, etc.). This means areas without HOA restrictions are still generally open to STR use, provided the owner follows the new permitting rules. Conflicts between state and local authority continue to simmer: for instance, one of Rim Country’s state legislators has questioned whether Gila County’s ordinance oversteps state law, prompting a request for the Attorney General to review its legality. The County crafted its rules to fit within the allowed “specific circumstances” in the statute (such as preventing STRs from housing sex offenders, addressing noise, etc.), but some requirements, like mandatory background checks for renters, go a bit further than what the state law explicitly lists. As of this writing, Gila County’s ordinance stands, but it underscores the ongoing tension in Arizona: local communities pushing for tighter control over STRs, versus state-level protections for property owners and the tourism industry. We could see further legislative adjustments in the future if the balance is deemed to swing too far either way.
For Realtors and owners in Rim Country, the key takeaway is that Arizona’s legal landscape for STRs has evolved into a patchwork of state baseline rules with newly added local requirements. Always ensure you’re up to date on both levels. An STR in Payson or Pine today must navigate state law (tax licensing, etc.), county or town permitting, and possibly HOA rules – a more complex compliance picture than a few years ago, when essentially only state law (SB 1350’s broad allowance) was in effect. This evolution reflects Arizona’s attempt to find a middle ground after initially having one of the most lenient STR policies in the nation.
Zillow has forcefully denied the allegations and says it will fight the lawsuit. In a public statement, a Zillow spokesperson characterized the complaint as “fundamentally misrepresenting” how Zillow operates and “the value [Zillow has] delivered to buyers, sellers and real estate professionals for nearly two decades.” Zillow “plans to vigorously defend” itself, maintaining that “buyers and sellers deserve to have the choice to work with an agent who is committed to their best interests and only represents them.”[14] In Zillow’s view, connecting consumers with a dedicated buyer’s agent (rather than the listing agent) gives consumers more choice and avoids dual-agency conflicts. The company asserts that its Premier Agent and Flex programs are about partnering with buyer’s agents to serve customers, and not about inflating prices. Zillow also notes that agent advertising and referrals are a longstanding part of the industry, and it contends there is nothing improper about its referral fee model (which it likens to a success-based advertising cost).
It’s worth noting that no court has yet ruled on any of these claims – the lawsuit was just filed in September and will likely take time to play out. Zillow has not (as of this writing) changed any practices in response, and the Premier Agent/Flex lead program remains operational. For now, Zillow’s official stance is that this suit is “without merit,” and the company emphasizes its commitment to transparency and choice for consumers[15]. We can expect a vigorous legal battle ahead, as Zillow defends its business model against these accusations.
Another Lawsuit: Zillow’s Listing Policy Faces Challenge
This new class-action isn’t the only legal scrutiny Zillow faces in 2025. Earlier this year (June 2025), real estate brokerage Compass sued Zillow in a separate federal antitrust case, alleging Zillow abused its market power with a policy that limits certain home listings on its platform[16]. Specifically, Zillow introduced a “Listing Access” policy in May 2025 that requires any home publicly marketed for sale to be submitted to Zillow’s site within one business day, or else Zillow will refuse to display it[17]. Zillow instituted this rule to discourage “private” or off-MLS listings that aren’t immediately available to the broader public. Compass’s lawsuit claims this so-called “Zillow ban” on private listings is anti-competitive – arguing that it coerces brokers (and their clients) into using Zillow and the MLS exclusively, thereby stifling alternative marketing strategies[18][16].
Zillow, for its part, denies Compass’s allegations and asserts that its policy is pro-consumer. Zillow argues that banning selectively marketed listings actually protects buyers’ choice by ensuring all publicly for-sale homes are on open platforms, rather than only shown to an exclusive clientele[19]. This clash highlights a broader tension: Zillow’s dominant role means its policies can effectively set industry norms, which some competitors and agents have begun to challenge in court. While the Compass-Zillow case is separate from the class-action lawsuit, both legal battles underscore the increased scrutiny on Zillow’s market practices this year. Zillow now finds itself defending two major lawsuits in 2025 – one filed by a competing brokerage, and this new one filed on behalf of consumers – each alleging that Zillow’s business strategies harm a fair and open real estate market.
Why This Matters for Realtors and Lead Services
For Realtors in our association, this litigation is significant because it targets the business model of a major source of client leads. Zillow is not only a popular home-search portal for consumers; it’s also a lead generation platform that many agents (perhaps even some of our members) partner with. The outcome of this case could reverberate across the industry. Here are a few potential implications to watch:
The struggles and solutions we’re seeing in Rim Country are part of a broader national trend in how communities deal with short-term rentals. Over the past decade, as platforms like Airbnb and VRBO expanded, cities and counties across the United States have grappled with the rapid growth of vacation rentals in residential areas. There is a noticeable push toward greater regulation and oversight of STRs nationwide, though approaches vary widely by location:
In conclusion, Rim Country’s current STR regulatory landscape reflects both our unique local values and the larger national movement toward balanced STR oversight. We have moved beyond the “anything goes” era of a few years ago. Today, a homeowner looking to rent out a cabin in our region must navigate permits, HOA covenants, and state rules – a level of due diligence that is becoming standard practice across the country for responsible STR operation. As Realtors, it’s our job to stay informed of these changes and help our clients remain compliant. The Central Arizona Association of Realtors (CAAR) is committed to keeping its members updated on these developments. By understanding the rules in Payson, Pine, Strawberry, Happy Jack, Star Valley, and all across Gila County, we can better serve our buyers, sellers, and rental owners. While CAAR does not take a position on the policy direction, we do recognize that awareness and education are key: our members should be well-versed in short-term rental compliance so they can advise clients and avoid inadvertent violations.
Rim Country is known for its welcoming communities and beautiful getaways. The goal of these evolving STR regulations is to strike a balance between allowing owners to benefit from vacation rental use and preserving the peace and character that make this region so special. As this balance continues to be fine-tuned both locally and nationally, CAAR will continue to monitor and share updates on short-term rental rules. For now, the message is clear: make sure any STR in Rim Country is properly permitted, compliant with all HOA rules, and being a good neighbor. By doing so, we help maintain the goodwill in our communities and ensure that the Rim Country remains a great place to live, work, and vacation for everyone involved.
I hope this overview has been both informative and useful in helping our members stay ahead of recent developments in short-term rental regulation. As REALTORS®, we play a key role in guiding clients through an increasingly complex landscape of county ordinances, HOA rules, and state laws. By staying informed, we can help our clients avoid confusion or compliance issues and continue to uphold the professionalism and trust that define our industry.
— Dennis R. Riccio, President
Central Arizona Association of REALTORS®
Sources:
Interested in what CAAR does and how you can get involved? Contact us below to talk to our team.