Nov. 4, 2022
Unlike hotels, short-term rentals (STRs) remained resilient throughout the pandemic — and in many locations, even grew in number. Currently, of the 86 million single-family residential homes in the U.S., 1.3 million are estimated to be available as STRs on any given night.
But also unlike hotels, STRs can pop up in residential neighborhoods, impact rural areas not zoned for commercial business, and contribute to housing scarcity. And with an average of five to 10 people staying at an STR (multiplied several times over), the stress on local infrastructure can be significant: more trash, reduced parking, and greater wear and tear of streets.
Ensuring that communities collect locally mandated STR or hotel taxes is a necessary step toward the ability to support fire departments, schools, and other necessary services. However, it can be difficult to identify STR addresses — and whether owners of the properties, which are often businesses, have the necessary permits and are paying their fair share.
Understanding each situation requires leveraging data, just as rental platforms do. Otherwise, mandated revenue might not be recouped, and resources could be stretched thin. To better forecast the ways tourism might impact local infrastructure and residents, start with these data-driven best practices.
1. Plan ahead with data.
Local governments need to be able to assess their specific situations, including where issues may occur, to put plans in place. That requires past, current, and future public data on bookings: where, when, and how many people will be in the area for the next three to six months. This information can create a basis for creating policy decisions, enforcing compliance, and protecting residential areas.
2. Create a permit threshold — and reassess it as conditions change.
Consider Placer County, a mountain community near Lake Tahoe, California. When the pandemic led to an increase in tourists there, officials saw a jump in second-home ownership that reduced workforce housing. The county decided to create a permit threshold by putting a moratorium on new STR permits.
3. Regulate through zoning.
Distance or zoning restrictions can be effective in limiting STR saturation to avoid over-taxing local resources, including housing stock. For instance, counties can look at the distance between STRs or the percentage in certain districts. They can also set neighborhood density limitations. The city of La Quinta, California, for instance, only allows STRs in certain neighborhoods, which helps create more affordable micro housing markets.
4. Invest in data management.
Rentalscape, AirDNA, and other applications are emerging that allow users to easily access real-time public data from STR companies. Rentalscape — the platform created by my company, Deckard Technologies — matches STR listing data with parcel data to determine owner information and exact addresses. When Placer County started using Rentalscape, they discovered that some properties on the county border had been mislocated by a major STR company. Officials were able to work with the platform to reapportion tax revenue and divert dollars to the appropriate county coffers.
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