Discussion: When and how the City might negotiate an agreement to disallow short term rentals.

Council Direction.

Councilmember McCarthy made a Future Agenda Item Request on November 5, 2019, which was supported by the required number of councilmembers.  The item is now before the Council for discussion and direction to staff. 

A vacation or short-term rental is generally defined as a transient dwelling unit that is offered for rent for less than thirty days. These types of rentals can be found in both single-family and multi-family housing. The types of vacation and short-term rentals vary dramatically.  These rentals can be an entire dwelling unit, a room or rooms within an occupied dwelling unit, or an accessory dwelling unit with an occupied primary dwelling.   The City of Flagstaff Zoning Code currently states that accessory dwelling units may not be rented for a period of less than 30-days.  This requirement, however, predates recent changes to the Arizona Revised Statutes. 

In 2017, Arizona State Legislature enacted A.R.S. §9-500.39 which eliminated the ability of local cities and towns to regulate vacation or short-term types of rentals based solely on their classification or use. Consequently, these rentals are allowed, by state law. However, A.R.S. §9-500.39 does not preclude the ability for Home-Owner or Property-Owner Associations to regulate or restrict these types of uses.

Except in neighborhoods where Home-Owner or Property-Owners Associations restrict or regulate these types of rentals, vacation or short-term rentals are allowed by-right in all neighborhoods, subject to the following:

• All dwelling units and any accessory dwelling unit must be rented or offered for rent together and may not be rented or offered for rent independently of one another.
• All dwelling units transient in nature, including vacation and short-term rentals, shall have a maximum occupancy of ten (10) persons unless the building meets the International Building Code requirements for an R-1 occupancy.
• Non-residential uses, including retail, restaurant, banquet space, event center, or other similar uses are prohibited.

The City’s ability to regulate vacation or short-term rentals is limited to protecting the public health and safety in accordance with Arizona law as well as to ensure that property owners register their rentals and the appropriate tax is collected for this type of commerce.  Neighborhoods may be able to regulate short-term rentals through voluntary private agreements made between neighbors. These agreements, commonly referred to as private deed restrictions, are regulations that the City is not a party to nor can it enforce them or provide advice on how to implement them.