With the near universal presence of Airbnb, there’s no denying that short-term rentals have cemented their place in modern life. For some, hosting has become a necessary second source of income. For others, short-term rentals present a form of cultural currency for meeting new people or exploring a city. However, they also represent a modern regulatory challenge for local governments—how to regulate globalized, tech-based markets within their own jurisdictions.
Along with many positive economic benefits, the rise of short-term rentals (STRs) has also created new issues like the displacement of long-term rental options or residents facing an unwanted surge in tourism. As the industry shows no sign of slowing down and questions continue to grow around the impact of short-term rentals on development, it’s become clear that regulating STRs is an essential next step for local governments looking to help their communities adapt to this modern dilemma.
Governments must weigh diverse factors and stakeholder opinions when deciding how to regulate STRs, but an accessible permitting process is central to the success of any plan. Some common permitting considerations include: whether the host is a permanent resident, requiring a local contact person, a maximum number of days per year a unit can be rented, and neighborhood quotas. Yet once a city has determined their permitting and licensing requirements, there remains the bigger question of how to enforce these rules, and who is ultimately responsible.
For their part, Airbnb is actively working to partner with local governments looking to require hosting permits, but they will not carry the weight of enforcement against their own business model. Pasadena, CA, for example, requires short-term rentals to have a business license and permit, with approval contingent on the property being the host’s primary residence and a 90 day renting limit for properties without an on-site host. While Airbnb has agreed to aid Pasadena’s efforts by prompting hosts to include their permit number on listings, they won’t block listings without a permit.
The line is clearly drawn. Airbnb will help cities design better processes or provide access to more data, but outright enforcement and oversight falls to the municipality. Yet most governments don’t have the resources or ability to identify non-compliant STRs and funnel hosts into the proper permitting channels, nor to bring a costly lawsuit against a company like Airbnb. So how can these companies and local governments effectively work together? How can governments set up their regulatory systems to support planning goals like increased tourism or other benefits that STRs bring?
The answer lies in the permitting process itself; the system needs to cater to consumer needs. For many hosts, interacting with their local government and applying for a permit may be a completely foreign concept. So if the permitting process seems intensive, long, or cumbersome, many hosts simply won’t do it. Especially in this example, where governments need to incentivize a new type of permitting, user-friendly design is no longer a luxury, it’s a necessity.
Imagine you’re a resident of the City of Park View, which recently instituted a series of regulations for short-term rentals. The City wants to ensure the presence of STRs scales smoothly and be proactive about constituent concerns like an oversaturation of travelers, maintaining waste management, and parking availability.
You’ve already been renting out your apartment through Airbnb for almost a year, but given the new law, you are planning to register your short-term rental with the City. You go to the City’s website and encounter a long list of requirements and technical rules accompanied by PDFs you have to print out and walk into City Hall during your work hours, perhaps to several different departments. Given this process, you might not know whether your short-term rental adheres to the rules, and the hassle required to complete an application might deter you from doing it at all. Chances are, you’ll move forward like most other hosts, operating your Airbnb without a permit and taking the risk—assuming you won’t get caught.
Now imagine instead, that after spending a few minutes creating your Airbnb account, you open a new tab in your browser and navigate to the City of Park View’s online permitting portal. The website has a modern interface and a section clearly labeled “Register a Short-Term Rental”.
With a click, you’re guided through a short survey to assess your permitting needs, which concludes with a final list of all the applications you need.
You can submit, pay for, and receive the permit or license online, as well as view your submission history and store draft applications in your account. The City can easily access and process your application, while communicating with you directly through the online chat in that same account view.
In this scenario, you’ll have registered your STR with the City in much the same way as you created your Airbnb account. You did it all in a matter of minutes and without leaving your house. What’s more, the City gains visibility into the impact of STRs and can work to better ensure their growth aligns with the community plan.
As the applications come in, department officials can see where STRs are concentrated and compare application data to other socioeconomic demographics throughout the city. Park View can monitor whether the regulations are performing as intended, or, if the data shows otherwise, quickly and easily update their online permitting system to reflect necessary changes. Ultimately, applicants are put at ease with a straightforward registration process, the community can better plan around their goals, and the City can provide outstanding customer service while pulling in a little extra revenue.