The Flagstaff City Council approved a licensing process to regulate short-term rentals.
The move comes after the state dropped a measure that previously prevented cities from regulating such businesses last year.
The new regulations require all housing rented out for less than 30 days to be licensed with the city. The license costs $175. Operating a short-term rental without a license would result in a $1,000 fine per month. The ordinance also gives the city the ability to deny a license.
The Arizona Daily Sun reports there are currently 1,045 individual short-term rentals within Flagstaff and more than half are already registered with the city.
The regulations are set to go into effect on November 1. Coconino County is considering similar regulations.