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Council approves zoning and code updates, takes first reading on lodging tax increase
Summary
Council unanimously approved second readings to rezone two parcels (KZ‑24‑01) and to update town code to conform with HB 24‑47; council also passed a first reading to raise selected lodging transaction privilege taxes, advancing the measure to a Nov. 18 public hearing.
CAVE CREEK, Ariz. — The Town Council unanimously approved several land‑use and code changes and advanced a lodging tax increase after brief discussion Tuesday.
Council approved second reading and adoption of Ordinance 2025‑12 (zone change KZ‑24‑01) to rezone two parcels near Carefree Highway from Desert Rural Residential to Commercial Buffer. Planning Commission had recommended approval 6‑0 and council voted 7‑0 to enact the second reading.
Council also approved multiple code changes (second readings of Ordinances 2025‑13, 2025‑14 and 2025‑15) to bring town zoning, subdivision and related code sections into conformance with Arizona House Bill 24‑47; each ordinance passed unanimously.
On taxation, staff presented a first reading of Ordinance 2025‑16 to increase selected transaction privilege (lodging) tax rates for hotel and bed‑tax categories. Staff said each 1% increase would generate approximately $57,000 annually for the hotel category; combined increases under the proposal were estimated at about $171,000 per year. Council approved the first reading 7‑0; a public hearing and second reading are scheduled for Nov. 18, and the proposed effective date is Feb. 1, 2026, subject to Department of Revenue processing.
A short written public comment from a local short‑term lodging operator (Steve Breckner) asked the council to consider the competitive effect on short‑term rentals; staff and council members responded that the customer out‑of‑pocket increase on a $150–$400 nightly rate would be modest in absolute dollars and that the town’s low hotel inventory limits immediate revenue impact comparisons.
Next steps: second readings and public hearings for the tax ordinance will be held as scheduled; rezoning and code amendments will be incorporated into town maps and code updates per the standard effective interval for second readings.
