Sedona, the popular sightseeing destination in north-central Arizona, has plenty of homes, including many offered as short-term vacation rentals for visitors shown here Saturday, March 28, 2015, in Sedona, Ariz. Sedona previously discouraged building apartments in the largely rural community, and local officials say the resulting shortage of affordable housing more recently, particularly for municipal employees and workers at hotels and other businesses serving vacationers. (AP Photo/Ross D. Franklin)

SEDONA, Ariz. - Sedona, the tourist destination in Arizona's red rock country, has plenty of homes, including many offered as short-term vacation rentals for visitors.

But the city until recently has discouraged the building of apartments, leaving affordable housing in short supply for municipal employees and workers at hotels and other businesses serving vacationers.

Local officials told the Arizona Republic the shortage has been aggravated by a 2016 state law that forced the city to drop its prohibition on short-term rentals.

The law prohibits municipalities from regulating those home rentals, and that means people can rent their homes to tourists and others via websites such as Airbnb or VRBO.

Sedona had a few hundred vacation rentals before the law took effect, but that number has grown to more than 1,000, or 20 per cent of Sedona's total housing inventory, City Manager Justin Clifton said.

Meanwhile, apartments constitute only 4 per cent of its housing. Last year, Sedona changed the rules that had made it difficult to build apartments.

"It's only been just recently that we figured out that one of the ways to address the affordability issue is to allow for higher density," Clifton said.

The housing issue makes it difficult for people to keep living in the tourist town.

Where residents used to pay $800 to $900 a month in rent, they're now paying $1,800 to $1,900 a month, according to City Councilman Scott Jablow.

"How are people supposed to afford that?" he said. "They can't, so they're leaving the region."

Jablow said some landlords have begun evicting long-term tenants to make more money on short-term vacation rentals, creating a problem people who live in Sedona to rent long term.

More than 40 per cent of Sedona's business workforce lives outside of the city, and Clifton estimated it's higher for city workers.

Sedona has a turnover rate of 20 per cent among city employees, he said.

Other residents say renters looking for affordable housing should look outside the city, to communities such as Cottonwood, Cornville or Jerome.

But Clifton said housing prices increase in neighbouring communities as they rise in Sedona.

He said the housing issue has made it hard to fill key city positions and to retain employees.

"If the city offered me a position at the same salary today, I don't know that I could make it work," he said.

News from © The Associated Press, 2019