Six Tips for Making Short-Term Rental Regulations Effective
Vacation and short-term rentals are nothing new. For decades, second homes and other income-generating properties in popular tourist destinations have given travelers a cozier, homier alternative to hotels. When the COVID pandemic led to restrictions that tightened access to hotels and encouraged private, individualized options for tourism, short-term rentals saw a boom that continues even as the world recovers to a sense of normalcy.
Short-term rental (STR) growth continues at a relentless pace —, over 21% in the second quarter of 2022 — already surpassing 2021 levels and forecasted to continue expanding over the next year. The numbers prove that STRs weren’t just a pandemic adaptation. The flexibility and easy availability of these rentals have revolutionized the tourism sector. What was once just a small sliver of couch surfing and budget travel has turned into an industry that can have a massive impact on local tourism revenues. Many local governments were left flat-footed facing the sudden surge of short-term vacation rentals both in terms of ordinance enforcement and tax collection.
Regs in Place. Now What?
Establishing a framework for regulating new and existing rental properties is critical for consistent and successful enforcement of short-term rental properties. Having regulations and enforcement procedures in place, however, is only half the battle. Keeping property owners informed of their responsibilities, as well as up to date on any changes that might impact those regulations and owner expectations, is equally important.
The following tips for better owner awareness around host compliance issues have been gathered from Granicus’ experience with over 400 local governments navigating short-term rental enforcement issues:
Get the word out
It shouldn’t be a big surprise to anyone in government that the more communication with short-term rental owners, the better likelihood of successful compliance. Identify non-compliant hosts and provide communication that focuses on solving the problem, not punishing the non-compliance.
With the STR boom, many hosts are first-timers looking to take advantage of the market opportunities. In many cases, they might not know about regulations and what is needed to become compliant.
Letters should tell hosts where to properly register and make the compliance as easy as listing their vacation rental on Airbnb or VRBO. Provide irrefutable proof of non-compliance to minimize back-and-forth conversations with the property owner. Sending a screenshot of the non-compliant listing is an easy way to show where the problem occurred and that the local compliance team noticed it.
Just an initial communication can have a dramatic impact on compliance. When starting their host compliance program, the City of Milpitas, California, saw 68% compliance after sending a first letter directing hosts online to register their short-term rentals.
Explain Why Regulations Exist
For some first-time STR operators (and even some experienced ones), the idea of local regulations and compliance ordinances may seem a type of governmental interference. But as anyone who works in host compliance knows, regulations are put in place for both the safety of the property owner, the guest staying in the STR, and for the benefit of the community in which the property is located.
Here, again, honest and direct communication can be effective. Taking the time to explain why safety regulations are important, discussing the impacts short-term rentals have on the market, and even showcasing the benefits that STR tax revenue brings to the community can help counteract those concerns. The City of Los Angeles provides a history of their home-sharing ordinance and also highlights the ways that the program has benefited the community on their website. By showing the full context of short-term rental regulations can help hosts more willingly comply.
Set Clear Dates and Expectations
No one wants to face a fine for a violation they didn’t know was coming. That’s why it’s important to clearly state required registration dates and any consequences should hosts not register on time. Make sure that these dates and expectations are not hidden in fine print or hard to find on a government webpage. If a host is found to be non-compliant past the specified date, and there is proof that the short-term rental is being operated at that time, make sure to follow through on the consequences as stated for non-compliance.
Educate and Empower Staff to Support
While many outside of government might see compliance departments as bureaucrats looking to punish and profit from those in their community, those who work in those departments know that their goal is to help, not harm. Outbound communication, like those mentioned above, can help establish that relationship, customer service is another important tool to making the process more pleasant for short-term rental operators, and increases the likelihood of host compliance.
While most questions can be answered through a well-organized and clear digital experience, it’s still important for governments to provide positive support in various ways. Empowering staff to provide phone support that both educates and assists callers not only builds better connections with hosts, but promotes transparency by providing a human connection should there be questions about the hows and whys of short-term rental ordinances and compliance.
Don’t Rely on STR Sites for Data
As many communities start to get a handle on their short-term rental market, many rely on listing websites to find properties that are out of compliance. But taking the time to scour Airbnb, VRBO, or the growing list of short-term rental websites presents many problems. Foremost, the amount of staff time dedicated to clicking through websites is inefficient when digital solutions, such as Granicus’ Host Compliance tool, offer automated searching driven by machine-learning.
But online platforms also don’t provide important data points that compliance staff rely on to check the status of properties. For example, a website won’t share the addresses of the host property, only relying on a basic review of a property that can’t be audited without reserving the property. Booking websites also don’t provide the number of nights rentals a property is occupied, or how much the host is charging per night. Both of these are critical pieces of information to determine how much hosts should be paying in taxes.
Harness the Power of Digital
While each of these tips can lead to greater success in short-term rental host compliance, creating an environment that brings all these together into one system of best practices can establish a process that can meet the growing demand of the STR market. Effective host compliance can increase visibility of operating rental properties, maximize tax revenues, and save valuable staff time.
Granicus’ Host Compliance tool makes it easy to implement this vision of efficiency in one digital, automated process. From identifying properties, to triggering communications to hosts, to collecting and processing revenue, Granicus provides the digital backbone to effective, and positive, host compliance relationships for over 400 local governments.
Learn more about how you can fully realize the impact of short-term rental growth in your community!