Overview: Are Short-Term Rentals Allowed in Flagstaff, AZ?

YES, short-term rentals are explicitly allowed in Flagstaff, Arizona. As of January 1, 2017, Arizona state law (A.R.S. §9-500.39) permits homes to be used as short-term rentals. The City of Flagstaff has implemented a comprehensive licensing and regulatory framework for short-term rentals that became effective in November 2023. The city requires all STR operators to obtain a valid city license in addition to state tax requirements.

How to Start a Short-Term Rental Business in Flagstaff

Starting an STR business in Flagstaff requires a systematic approach involving multiple regulatory steps. The process begins with understanding property eligibility and culminates with active license management.

Step 1: Property Eligibility Assessment

Before proceeding, verify that your property qualifies as an STR under Flagstaff's regulations. Eligible properties include:

• Single-family homes
• One to four-family houses or dwelling units
• Accessory dwelling units
• Units in condominiums or cooperatives (that are not classified for property taxation under A.R.S. Section 42-12001)
• Dwelling units in multiple-family developments offered for transient lodging

Step 2: Obtain State Transaction Privilege Tax (TPT) License

Arizona requires all STR operators to obtain a TPT license from the Arizona Department of Revenue before applying for city licensing. This is a mandatory prerequisite that cannot be skipped.

Step 3: Complete Neighbor Notification Requirements

Flagstaff mandates comprehensive neighbor notification as part of the licensing process. You must notify:

• Each single-family residential property adjacent to your STR
• Properties directly across from, behind, and diagonally across the street from your STR
• Properties diagonally behind your STR (touching a point on the adjacent STR property)
• For multifamily buildings: residents on the same floor as your STR and units directly above and below

Step 4: Submit City License Application

Applications must be submitted through the city's designated online portal and include all required documentation and fees.

Step 5: Maintain Ongoing Compliance

License holders must maintain current information, renew annually, and comply with all operational requirements including tax remittance and safety standards.

Required Documents, Permits, Licenses, and Guidelines

State-Level Requirements

1. Transaction Privilege Tax (TPT) License

• Issued by Arizona Department of Revenue (ADOR)
• Required for all STR properties regardless of management approach
• Must include the specific property address as a location
• Required for license renewal and ongoing operation

2. Tax Obligations

• Sales tax and transient occupancy tax (BBB tax) remittance required
• Taxes must be paid at the same rates as hotels
• Owner responsible for collection and remittance, regardless of whether tax is charged to guests
• Failure to make timely payments results in fines and interest
• Contact ADOR for specific rates and remittance procedures

City-Level Requirements

1. Flagstaff STR License

• Fee: $180 (nonrefundable, not prorated)
• Term: One year from issuance date
• Renewal: Annual with updated documentation and fees

2. Required Application Information

• Physical address of the STR property
• Complete owner information (name, address, email, telephone)
• Emergency point of contact details (name, address, email, 24-hour telephone)
• TPT license number with location code
• Proof of lawful presence in the United States (unless exempted)
• Owner's attestation of compliance with all applicable laws
• Background certification (no sex offender registration, no qualifying felony convictions within past 5 years)

3. Neighbor Notification Documentation

• Written notification to all required properties including:
  • STR license number
  • Physical address of the STR
  • Emergency point of contact information
• Attestation of compliance form including:
  • Address of each property notified
  • Method of notification for each property
  • Contact information of person attesting to compliance

4. Building Safety Compliance

• Property must be an approved structure
• Building permits required for conversions of garages, workshops, or accessory structures
• Safety measures strongly encouraged:
  • Fire extinguishers
  • Smoke and carbon monoxide detectors
  • Deadbolt locks
• Contact Building Safety counter at 928-213-2627 for specific requirements

Specific Regulations for Short-Term Rentals

Operational Requirements

Emergency Point of Contact

• Must be available within 60 minutes of police request
• Can be reached by phone or text
• Required to respond to emergencies requiring police response
• Information must be kept current with the city
• Failure to maintain current information results in $1,000 penalty per 30 days of non-compliance

Property Posting Requirements

• Notice must be displayed within 10 feet of primary entrance
• Must include:
  • Statement of prohibited nonresidential uses
  • Emergency contact name and phone number
  • City complaints hotline number
  • City STR license number

Advertisement Requirements

• City STR license number must be displayed on all advertisements
• Includes online listings, print advertisements, and any promotional materials
• Violations of advertising requirements within 30 days are treated as single violation if compliance is achieved

Prohibited Uses

STRs cannot be used for:

• Nonresidential uses including special events requiring permits
• Retail, restaurant, banquet space, or similar commercial uses
• Housing sex offenders
• Sex trafficking or related activities
• Operating sober living homes
• Selling illegal drugs
• Liquor control violations
• Producing pornography, obscenity, or adult-oriented content
• Any use violating applicable zoning, building, fire, health, sanitation, or noise regulations

Licensing and Renewal Process

Application Review Timeline

• City has 7 business days to review complete applications
• Incomplete applications are returned without action
• Applications requiring immediate compliance must be submitted within 30 days of notice
• License issuance occurs within 2-3 business days of payment confirmation

Renewal Requirements

• Annual renewal mandatory
• Must provide current TPT license
• Must attest to current neighbor notifications
• Must update emergency contact information
• Must pay annual license fee

License Suspension and Enforcement

• Suspension possible for up to 12 months based on violation severity
• Three verified violations within 12 months may trigger suspension
• Single serious violations can result in immediate suspension
• City Attorney may initiate court proceedings for enforcement

Penalties and Violations

Enhanced Civil Penalties (per verified violation within 12-month period)

• First verified violation: $500
• Second verified violation: $1,000
• Third and subsequent verified violations: $3,500 each

Additional Penalties

• Operating without required license: $1,000 per month after 30-day notice period
• Failure to provide emergency contact information: $1,000 per 30 days
• Each day of violation constitutes separate offense
• Remedies are cumulative

Hearing and Appeal Process

• License denial or suspension can be appealed to City Manager within 10 calendar days
• Independent Hearing Officer presides over appeals
• Hearings scheduled within 30 days or as soon as practicable
• Informal process with substantial evidence standard
• Hearing Officer decision is final

Neighbor Notification Requirements

Initial Notification

• Required before offering STR for rent for the first time
• Must be completed in writing using city-required format
• Additional notification required within 10 days of emergency contact changes
• Additional notification required at license renewal

Notification Content Requirements

• STR license number
• Physical address of STR
• Emergency point of contact information (name, physical address, email, 24-hour telephone)

Compliance Monitoring

Verification Standards

• Violations must be "verified" meaning final adjudication finding guilt or civil responsibility
• Must relate to STR purposes under state law or city code
• Final decision with no further appeal rights required
• Aesthetic, solid waste, and non-safety parking violations excluded from suspension thresholds

Enforcement Authority

• City Manager, Police Department, Code Compliance Manager, and City Attorney have delegated enforcement authority
• Written notice of violation required for all enforcement actions
• Notice must include violation description, code sections, potential fines, cure period, and hearing rights
• Failure to request hearing within 10 days constitutes waiver of rights

Contact Information for Local Authority

City of Flagstaff STR Program

Physical Address: 211 W Aspen Avenue Flagstaff, AZ 86001

Phone:

• Main Line: (928) 213-2231
• City Hall: (928) 213-2000

Email: ShortTermRental@flagstaffaz.gov

Hours: Monday-Friday, 8:00 AM - 4:30 PM

Online Resources:

• STR License Portal: portal.deckard.com/az-coconino-city_of_flagstaff-str-portal/
• Public STR Map: str-public-portal.deckard.com/?place=az-cityofflagstaff
• STR Complaints Portal: complaints-str.deckard.com/flagstaff-az-str-complaints

Building Safety Division

Phone: (928) 213-2627 Website: Building Safety page on City of Flagstaff website

Arizona Department of Revenue (TPT Licensing)

Website: azdor.gov/transaction-privilege-tax/tpt-license/applying-tpt-license Short-Term Lodging Information: azdor.gov/business/transaction-privilege-tax/short-term-lodging

Important Notes for STR Investors

Market Considerations

Flagstaff operates under a mature regulatory framework with established enforcement mechanisms. The city's approach balances property owner rights with neighborhood protection through comprehensive notification requirements and graduated penalty systems.

Compliance Strategy

Successful STR operation in Flagstaff requires proactive compliance management including:

• Regular review of licensing requirements
• Maintenance of current emergency contact information
• Systematic neighbor communication protocols
• Consistent tax remittance procedures
• Ongoing property safety standard adherence

Investment Timeline

Budget for complete licensing process which typically requires 2-3 weeks from TPT application through city license issuance. Factor in time for neighbor notification completion and potential application review periods.

Legal Framework Evolution

Stay informed about potential regulatory changes as the city continues to refine its STR oversight based on operational experience and community feedback.

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Source Links

• Flagstaff STR License Information
• STR Property Owner Guidelines
• Municipal Code Chapter 3-12
• Arizona State Statute 9-500.39
• Flagstaff STR License Portal
• Public STR Map and Information
• Arizona TPT License Application
• Flagstaff STR Complaints Portal
• Flagstaff Building Safety Information

This guide provides comprehensive information for STR investors operating in Flagstaff, Arizona. Always consult with legal and tax professionals for specific investment decisions and maintain current awareness of regulatory changes through official city communications.