The City of Flagstaff's building permit list for September 2026 runs for hundreds of lines. Most of them are commercial remodels, shade structures and solar canopies. Three residential entries stand out. One is a 928-square-foot attached ADU called "Sirius at Timbersky," labeled "Model Plan," at 3098 W Nix Way, issued September 8. Another is a garage being remodeled into a detached ADU at 1920 W University Heights Dr N. The third is Hope Construction's "West Street Duplex III" at 2612 N West St, where permits for both units were issued September 3.
Nine months after the city opened up its residential zoning, that is roughly what a month of activity looks like. For a buyer, the meaning is practical. If a listing says "room for an ADU" or "duplex potential," the city's zoning is now rarely what stands in the way. The real answer is in the lot's own records: its covenants, its trees and slope, its utility connections, and the rental rules that apply to whatever gets built.
What the city actually changed
On December 2, 2025, the Flagstaff City Council unanimously approved a zoning amendment allowing middle housing, meaning two to four units on one site, in residential districts citywide. The state law behind it, Arizona's HB 2721 middle-housing statute, only required this within a mile of a city's central business district and on a share of large new developments. Flagstaff has no defined central business district, so it applied the rule across the whole city.
The process change matters as much as the density. Tiffany Antol, the city's zoning code manager, explained that a lot with up to four units is now treated as a single-family home under the zoning code. These projects skip concept and site plan review and go straight to a building permit. Multifamily now starts at five units instead of three. In January 2026, the city also launched an ADU model plans library of pre-approved detached designs ranging from 384 to 1,000 square feet. The Regional Plan 2045 was ratified by voters on May 19, 2026 and took effect in June. It expands Urban Neighborhood areas and supports more density in most Suburban Neighborhoods.
Taken together, the city has made the zoning question about as simple as it can be. The constraints that remain sit in places a zoning map doesn't show.
The first filter is in the title report
Arizona's ADU law limits what cities can require. It says nothing that overrides what neighbors agreed to among themselves. The statute states it plainly:
"This section does not prohibit restrictive covenants concerning accessory dwelling units entered into between private parties."
That line comes from ARS 9-461.18. The city's own ADU guidance tells owners that HOA rules may affect whether an ADU is allowed and to check their association's documents. The middle-housing statute lists what municipalities may not do. It has no language voiding private covenants. So in a subdivision whose CC&Rs limit each lot to one single-family home, a duplex plan needs a careful reading of that specific declaration, ideally by an attorney, before anyone counts on it.
The same statute adds a second paperwork check. An ADU can't be built on top of a current or planned public utility easement without written consent from any utility that uses it or may use it in the future. Easements show up on the plat and in the title commitment. For a buyer, that means the backyard that looks perfect for a casita should be checked against those documents during the inspection period.
On a forested lot, the overlay sets the footprint
Flagstaff's Resource Protection Overlay is where local geography meets the new zoning. On residential sites, the overlay generally sets aside 50% of the site area for forest protection, subject to zone-specific rules and reduction provisions. Slopes and floodplain have their own thresholds:
| Resource on a residential lot | Share that must be protected |
|---|---|
| Slopes of 17% to 24.99% | 70% of that area |
| Slopes of 25% to 34.99% | 80% of that area |
| Slopes above 35% | No development allowed |
| Rural floodplain | 100%, left undisturbed |
An application in the overlay requires a qualified resource survey. On a site under five acres, the whole site gets surveyed. Where resources are kept, a protection plan has to be approved before grading or building permits are issued. Two pine-covered lots of the same size, both zoned for four units, can end up with very different buildable footprints once the survey is done. The overlay standards are also still being revised. One city pilot project added 120 units to a site that had been limited to 192, while still preserving key resources.
The cost of a new unit before construction starts
Once a lot clears covenants and terrain, the next line item is utilities. The most recent city capacity fee schedule found is marked effective October 2, 2025 and "subject to change." For a 3/4-inch, one-meter single-family service, it lists $8,146 for water capacity, $4,086 for sewer capacity, $806 for the meter and $45 for service, for a total of $13,162.87 with tax. For multifamily services, the same schedule charges sewer capacity at $4,086 per unit and prices water capacity by meter size.
What a particular added unit is billed depends on meter sizing, existing capacity and connection needs, so the City of Flagstaff should confirm the number before it goes into an offer price. These figures are the most recent published schedule we found, more than a year old. They shouldn't be treated as a current quote.
The rental math changed on July 1
A lot of listing-sheet "potential" assumes the second unit pays for itself as a short-term rental. Flagstaff's updated STR ordinance took effect July 1, 2026. It raised the annual license fee from $185 to $250 and added a $500,000 minimum liability insurance requirement, guest background checks within 24 hours of each stay, and safety equipment rules. The change that matters most for ADU buyers is that when a short-term rental property has an accessory dwelling unit, the owner must provide a certificate of occupancy showing they live on the property.
Long-term rental is a different story. State law bars cities from prohibiting either the main house or an ADU from being leased separately as long-term rental housing. The middle-housing statute also bars cities from requiring owner occupancy of any structure on the lot. A buyer who plans to live elsewhere and short-term rent a property with an ADU should confirm with the city how this rule applies before counting on that income. A buyer planning long-term tenants, or planning to live on site, is working within rules that protect that use.
There is also a fork in the road that catches people. In Flagstaff, ADUs are limited to lots with a single-family home, generally one detached plus one attached or interior ADU, and they aren't allowed on a lot with a duplex. A lot can take the ADU route or the middle-housing route. It can't stack both.
What the early permits show
The September permits are a useful sample. The Sirius ADU is by Capstone Homes, the builder working with Habitat for Humanity of Northern Arizona on the Timber Sky starter homes. It sits inside a newer master-planned community and carries a "Model Plan" label. The University Heights project reuses an existing garage. The West Street permit doesn't say whether it relied on the new citywide rules.
The city has described the pace as slow. At the September 22, 2026 council work session, according to an AI-generated Citizen Portal summary, sustainability director Nicole Antonopoulos said the model plans library had seen limited use and that staff would expand outreach to realtors, developers and prospective buyers. That summary puts the library at 13 plans, while the library page lists 12. In an April 23, 2026 presentation to the Housing Commission, city staff listed construction cost, financing, HOA restrictions, supply-chain issues, utility access and neighborhood opposition as common ADU barriers. Those barriers line up closely with the sections above.
Questions to answer during due diligence
Before paying extra for a second-unit story, these questions can be answered within a normal inspection period:
- Do the recorded CC&Rs or deed restrictions limit units, structures or rentals on this lot?
- Does the plat or title commitment show a public utility easement where the new unit would go?
- Is the lot inside the Resource Protection Overlay, and how much of it is forest or slopes over 17%?
- Is it in the Townsite Overlay? There, an ADU needs a Certificate of Appropriateness before the building permit application.
- What will the city charge in water and sewer capacity fees for this specific connection?
- Does the income plan depend on short-term rental of an ADU property without the owner living on site?
- Is the plan an ADU on a single-family lot or a two-to-four-unit project? Those are separate paths.
FAQ
Can an HOA in Flagstaff still prohibit an ADU? Arizona's ADU statute expressly leaves private restrictive covenants on ADUs in place, and the city tells owners to check HOA rules. Your specific declaration controls, so have an attorney review it.
How big can an ADU be? State law requires cities to allow an ADU up to 75% of the main home's gross floor area or 1,000 square feet, whichever is less. Flagstaff's model plans range from 384 to 1,000 square feet.
Does using a model plan skip review? No. You still need an approved permit and a site-specific review.
This post is general information and not legal or tax advice. If a Flagstaff property's value to you depends on adding a unit, the Justin Bemis Real Estate Team can help you get covenants, overlay maps and the city's fee questions in front of the right people before your inspection period ends. Contact Us to start with the lot you have in mind.
