Overview: Are Short-Term Rentals Allowed in Dothan, AL?

Yes. Short-term rentals are explicitly allowed in the City of Dothan. The City regulates short-term rentals through a structured licensing program, zoning approvals, performance standards, and lodging tax compliance.

Dothan defines two distinct STR categories:

• Short-Term Residential Rental (STRR): Owner-occupied homes where one or more rooms in a single-family residence (primary use is residential living) are rented for no more than 30 consecutive days.
• Short-Term Commercial Rental (STCR): Non-owner-occupied residential units where one room or the entire dwelling is rented for no more than 30 consecutive days.

These categories trigger different zoning pathways, occupancy rules, and compliance requirements. Investors should choose the model (owner-occupied STRR vs non-owner-occupied STCR) early, as this decision governs the regulatory process.

How to Start a Short-Term Rental Business in Dothan

• Determine STR category and feasibility:
  • Owner-occupied STRR: Permitted by-right in A-C, R-1, R-2, R-3, R-4, R-A, and B-1 zoning districts. Property must be owner-occupied, used as a residence, declared as the owner’s homestead, and operate as a household living unit. Utilities must be in the owner’s name (not an LLC).
  • Non-owner-occupied STCR: Permitted as a special exception in A-C, R-1, R-2, R-3, and R-4 zoning districts; permitted by-right in R-A and B-1 districts. If your STCR is in a residential zoning district, you must secure special zoning approval before the City will issue a business license.
• Address STCR proximity rules:
  • New STCRs cannot be located within 250 feet of another STCR, unless the other unit already existed as of the ordinance’s effective date (October 4, 2022) and is properly licensed by April 4, 2023. Confirm that your property’s location satisfies this buffer.
• Complete the registration and licensing sequence:
  1. Register the existing STR location using the City’s application portal and upload proof of operation prior to October 4, 2022 (if applicable). Registration is not licensing.
  2. Apply for and obtain the City business license for each STR location. The City has contracted Avenu Insights and Analytics to administer licensing and lodging tax services, set up taxpayer accounts, and manage filings.
  3. Remit lodging taxes and comply with filing and reconciliation requirements via the administrative vendor.
  4. If operating an STCR in a residential zoning district, complete special zoning approval through the Board of Zoning Adjustment before business licensing.
• Operational setup:
  • Post the business license/permit number on all listings and advertisements.
  • Implement internal policies to maintain quiet time (8:00 PM to 7:00 AM), occupancy limits (see below), no tents or RVs as STR units, and guest vehicle information collection (make, model, year).
  • Provide emergency contact information to both guests and the City with the license application.
  • Establish a compliance program to avoid violations: no more than two violations per year, or the City Commission may consider revoking the business license.
• Ongoing compliance and monitoring:
  • Use the City’s complaint hotline and online tip form for residents to report non-compliant STRs (safety, noise, trash, party houses, parking). Keep in mind this enforcement mechanism can be activated by neighbors.
  • If you are adding new STR inventory, notify Avenu proactively and confirm the licensing workflow.
  • Ensure advertising reflects occupancy restrictions and anti-party rules.

Required Documents, Permits, Licenses, and Guidelines

• Business license:
  • Required for each STR location. The license classification was created via Ordinance 2022-268 and licensing is administered by Avenu Insights and Analytics.
• Licensing application:
  • Registration application for STR locations is submitted online via the City’s application portal. Registration is distinct from licensing.
• Proof of prior occupancy:
  • For existing STRs operating prior to October 4, 2022, upload proof of prior occupancy during registration.
• Zoning approvals:
  • STCRs in residential zoning districts require special exception approval from the Board of Zoning Adjustment before licensing.
• Occupancy and quiet time compliance:
  • Maximum of two guests per bedroom, excluding children under 12.
  • Quiet time: 8:00 PM to 7:00 AM.
• Guest vehicle information:
  • Required to collect and disclose guest vehicle make, model, and year on demand to City representatives.
• Advertising requirements:
  • Display the license/permit number on STR listings and advertisements.
  • Reflect occupancy restrictions and anti-party provisions in all advertising.
• Lodging taxes:
  • STRs are lodging businesses; hosts must set up taxpayer accounts and remit lodging taxes through the City’s administrative vendor.
• Insurance:
  • The City initially considered minimum liability coverage of $500,000 per occurrence and $1,000,000 aggregate. The adopted ordinances include an insurance requirement with greater flexibility; exact minimums and acceptable policy types are not specified in the available materials. Hosts should confirm current insurance requirements directly with the City’s Business Licensing office.
• Utilities:
  • For STRRs, utilities must be in the owner’s name (not an LLC or other ownership form).
• Safety and structure:
  • Tents and RVs cannot be used as STRs.
  • City compliance reviews cover performance standards; building and fire code specifics should be confirmed with the Planning Department.

Specific Regulations for Short-Term Rentals in Dothan

• License and tax compliance:
  • Each STR location must be licensed.
  • The City has contracted Avenu Insights and Analytics to provide full-service administration, including taxpayer account setup, tax filings and reconciliation, and non-compliant operator discovery.
• Zoning allowances:
  • STRR (owner-occupied): Permitted by-right in A-C, R-1, R-2, R-3, R-4, R-A, and B-1. Property must be owner-occupied and homesteaded.
  • STCR (non-owner-occupied): Special exception in A-C, R-1, R-2, R-3, and R-4; by-right in R-A and B-1. New STCRs cannot be within 250 feet of another STCR unless that other STCR existed as of October 4, 2022, and is properly licensed.
• Occupancy and guest policies:
  • Maximum two guests per bedroom, excluding children under 12.
  • For STCRs, maximum occupancy is capped at 1.5 times the maximum number of permitted overnight guests (e.g., a three-bedroom unit may host six overnight guests plus up to three visitors).
  • Quiet time: 8:00 PM to 7:00 AM.
• Advertising and number display:
  • License/permit number must be shown on listings.
  • Occupancy limits and restrictions must be reflected in advertisements.
• STRR-specific rules:
  • No signage permitted.
  • One additional vehicle allowed (beyond the household’s normal number).
  • Approved Accessory Dwelling Units may be used in lieu of renting a room in the primary home, but not both.
  • Utilities must be in the owner’s name.
• Enforcement and penalties:
  • A 24/7 toll-free nuisance hotline and an online tip form are available for reporting non-compliant STRs (noise, trash, safety, party houses, parking).
  • No more than two violations annually; the City Commission may consider revoking the business license for repeated or serious violations.
• Registration and licensing deadlines:
  • Existing STRR and STCR hosts had to register the location of each rental unit and upload proof of prior occupancy within 90 days of the ordinance’s adoption.
  • Hosts were required to obtain the City business license by April 4, 2023; failure to obtain a license by that date invalidated any claim of prior use.
• State-level notes:
  • STRs in Alabama are generally treated as lodging businesses and are typically subject to lodging taxes at the state and local level. Because the City requires lodging tax compliance via its administrative vendor, you will likely be remitting state and local lodging taxes through the City’s process. The specific state tax rate structure and any exemptions are not detailed in the provided materials.

Contact Information

• City of Dothan – Planning Department (zoning approvals and STR regulatory questions):
  • Phone: 334-615-4410
  • Website: see Dothan STR information page (link below)
• City of Dothan – Business Licensing (license application and fee questions):
  • Phone: 334-615-3166
• City of Dothan – General Contact:
  • City Hall: 126 N Saint Andrews Street, Dothan, AL 36303
  • Phone: 334-615-3000
• Administrative Vendor for STR Licensing & Lodging Taxes (Avenu Insights and Analytics):
  • The City has contracted Avenu for licensing administration, taxpayer account setup, tax filings, and discovery of non-compliant operators. Contact details for Avenu were not provided in the available content.
• Complaint and Tip Resources:
  • 24/7 Toll-Free Nuisance Hotline: 855-238-3288
  • Online tip form: available via the City’s STR enforcement portal

Links to Source Pages

• City of Dothan – Short-Term Rentals Overview: www.dothan.org/777/Short-Term-Rentals
• City of Dothan – STR Registration Application: forms.dothan.org/Forms/str
• City of Dothan – Ordinance 2022-267 (performance standards): www.dothan.org/DocumentCenter/View/8649/2022-268
• City of Dothan – Ordinance 2022-268 (business license classification, fees, lodging taxes, compliance): www.dothan.org/DocumentCenter/View/8650/Fact-Sheet---Short-Term-Rentals
• City of Dothan – STR Complaint Portal and Telephone Hotline Notice: al-dothan.civicplus.com/CivicAlerts.asp?AID=1201&ARC=1636
• News Coverage – Dothan approves STR regulations: 1819news.com/news/item/dothan-approves-short-term-rental-regulations
• Proper Insurance – Alabama STR Regulations (includes Dothan summary): www.proper.insure/regulations/airbnb-laws-alabama/ (see “Dothan, Alabama, Airbnb Laws” section)

Notes:

• Fees, tax rates, and specific insurance minimums are not included in the provided documents. Confirm current fee schedules and insurance requirements directly with the City’s Business Licensing office.
• Dothan’s STR program uses an external administrator for licensing and lodging taxes; investors should coordinate with Avenu for tax account setup and filings.