The short-term rental (STR) market has experienced exponential growth in recent years, fueled by the rise of platforms like Airbnb and Vrbo. By 2028, it’s expected to serve 64 million users and reach a market volume of $21 billion in the United States.
While this growth benefits hosts and customers, it poses challenges for local governments. The rapid expansion of STRs can put a strain on local infrastructure, disrupt neighborhoods, and jeopardize the environment and resources that make these destinations attractive.
Consequently, strategic planning departments must devise robust short-term rental regulations to balance the economic benefits of vacation rentals with the well-being of local communities.
This article will offer practical tips for implementing such regulations.
1. Establish Clear & Comprehensive Regulations
To effectively address existing and emerging issues in short-term rentals, agencies must invest time in developing precise, comprehensive, and actionable regulations. This makes implementation and enforcement much easier down the line.
These regulations should align with governmental objectives while safeguarding the interests of short-term rental owners, guests, and the community as a whole.
A good first step in formulating well-defined short-term rental regulations is fact-finding. This includes collecting feedback from communities through online portals, focus groups, or participation of public officers in neighborhood meetings. It can also involve speaking to STR owners to understand their sentiments about current and proposed regulations, as well as the challenges that hinder their compliance.
Shifting focus internally, regulatory agencies can conduct audits of existing compliance processes to identify blind spots and inefficiencies, and the potential gains, such as increased STR tax revenue, that can be collected from remediation of these issues.
Once goals and challenges are clear, current STR regulations can begin to be revised and new proposals can start to get drafted. Resident participation is vital during the formation of these regulations, as it ensures that stakeholders feel heard, which promotes the adoption of STR policies and increases compliance rates.
Ultimately, the published regulations should be all-encompassing and include provisions such as STR definitions, permit requirements, zone restrictions, maximum occupancy, fine terms, insurance requirements, tax terms, and safety regulations, among others.
2. Enhance Communication & Educate STR Owners
With comprehensive STR regulations in place, the next step is ongoing sensitization. This is not a one-time effort but a continual process that is central to effective policy implementation.
To achieve universal awareness, planning departments can employ a multi-faceted approach leveraging various in-person and digital methods like the ones detailed below.
- Appointing staff as neighborhood liaisons can create a clear initial point of contact for STR owners and other stakeholders, ensuring they have direct access to the information and support they need.
- Publishing videos and blogs offers an opportunity to provide detailed explanations of regulations and guidelines.
- Setting up chatbots and a knowledge base on the agency website can provide instant answers to frequently asked questions, reducing the need for staff intervention.
- Social media is another powerful tool that planning departments can use to reach constituents quickly and efficiently. On platforms like Facebook, X, and Instagram, departments can post notices about upcoming council meetings, registration deadlines, policy updates, in-force dates, and more.
- Onsite workshops, webinars, and online forums can further enhance understanding and engagement among STR owners. These platforms allow for real-time interaction, making it easy for STR owners to raise concerns and policymakers to address them. These sessions, whether physical or online, can be recorded and hosted online for future reference.
- Accessible design should be a key consideration to ensure individuals with disabilities have an equal experience. Additionally, agencies should be prepared to offer auxiliary aids and services to these individuals when needed.
3. Utilize Technology for Monitoring & Compliance
Human input is crucial to ensuring regulatory compliance, particularly when exercising judgment can make the difference between success and failure. However, when technology supports human efforts, it makes for a more robust and effective regulatory apparatus.
The optimal approach to implementing technology across all stages of STR regulation enforcement is through the use of STR management software. These systems unify all compliance processes under one umbrella, enhancing transparency, collaboration, and user-friendliness, thereby simplifying oversight and increasing compliance rates.
Below are the stages of STR monitoring and compliance and how various technologies are integrated into each.
Identification
Advanced STR software can identify underreported or unregistered STRs using built-in web crawlers that scan dozens of listing sites. These scrapers collect textual data and extract photos to build detailed profiles of individual properties.
The collected data is scanned to remove duplicates, followed by human verification to ensure correctness. In some cases, the data collection and verification may call for in-person visits.
Compliance Checking & Remediation
STR software provides a boilerplate that can be customized to match the compliance frameworks of a specific jurisdiction.
After setting up customized workflows, each listing can be assigned a compliance status, which will influence the next steps of the enforcement agency. For example, the agency can send notices to owners of non-compliant STRs. The GovOS STR solution has a built-in template-based messaging system that allows agencies to send mass notifications via email or physical mail. Staff can also utilize data from crawl results to use as proof of activity.
Once unregistered listings have been detected and the operators notified, the customer-facing side of the STR management software should provide a way for owners to register their STRs or renew their licenses easily. Features like interactive forms and document upload capability allow the STR owner to complete tasks quickly and independently. On the backend, government staff can view and verify submitted information and approve or reject a user’s request.
Continuous Monitoring
As more properties start to come onboard, the STR management system provides a bird’s eye view of compliance through an intuitive dashboard that displays aggregate metrics such as total active listings, average daily rate, and more. Moreover, some STR software uses geocoding to pin all known STRs onto a virtual map, which helps to get quick insights like STR density in various areas.
At the individual STR level, agencies can continuously monitor properties for compliance. For example, if tax remittance is not up to date, action steps are displayed on the user’s profile which must be completed to restore compliance status.
By integrating technology with STR regulation, agencies can reduce fragmentation and increase compliance while keeping enforcement costs down.
4. Implement a Transparent Complaint & Violation System
In short-term rentals, as with any other operation, occasional complaints from concerned parties or rule violations are inevitable. To ensure effective governance and community trust, enforcement agencies must establish procedures to handle these issues impartially and transparently.
Many agencies have established a 24/7 hotline through their STR software provider for constituents to report STR violations in real-time. The reporting party is asked to describe the issue and provide the address and contact information of the alleged violator, if available.
For less urgent matters, reports can be submitted via a contact form on the agency’s website. Here the complainant can provide details and upload supporting evidence such as photographs, videos, and audio recordings.
Upon receiving a report, the enforcement agency can review the submitted evidence. Afterward, the emergency contact or on-call agent associated with the STR is contacted to acknowledge the complaint and initiate a resolution process. This approach ensures that both the complainant and the accused party are heard, fostering a fair resolution.
To further enhance transparency and accountability, all complaints and their resolutions are documented in the STR database. By tracking the frequency and nature of violations, enforcement agencies can identify serial offenders and take appropriate actions such as fines or license revocations.
Overall, by maintaining open communication lines with STR operators and affected parties, enforcement agencies can resolve issues transparently and make policy enactment smoother.
5. Foster Community Engagement & Feedback
To ensure the long-term success of your regulatory strategy, ongoing input from various stakeholders in the short-term rental ecosystem is essential.
Code compliance departments can initiate or participate in meetings with neighborhood associations and short-term rental alliances. These forums provide a platform for community members and STR operators to voice concerns, such as excessive noise, public safety issues, or unfair policies. Later, through polls and surveys, agencies can gather feedback on the impact of new ordinances on these issues.
Additionally, during policy fine-tuning, local governments can facilitate further engagement through hearings or public comment procedures.
Achieve Optimal Compliance With the GovOS Short-Term Rental Solution
Effective regulation implementation hinges on several key pillars: comprehensive policies, clear communication, both digital and human oversight, transparent resolution of violations and complaints, and collaborative community efforts. All these strategies help to ensure STR compliance is upheld while preserving the interests of STR owners and the community.
For government departments handling STR regulations, GovOS offers the leading short-term rental management solution to simplify registration, compliance, and taxation. Customers on the platform are able to identify STR properties operating in their community and maintain high compliance rates in the long term.
