Lending Hosts a Helping Hand in Compliance

Despite the economy, people still want to travel. Economic uncertainty currently dominates the headlines, fighting for mindshare with the average consumer, but the travel sector has come roaring out of the pandemic and continues growing. Airline passenger numbers are up 20%, per-room hotel revenue is up 7%, and overnight car road trips are up 0.5% despite gas prices being 56% higher than the same time last year.

Ahead of them all, however, short-term rental (STR) growth continues its relentless pace at 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 were more than just an adaptation for tourism during the pandemic. The flexibility and easy availability of these rentals have revolutionized the tourism sector, leaving local governments to not only properly establish the framework for regulating new and existing rental properties, but create ongoing compliance programs that keep the market safe and fair for all residents (while bringing communities the tax revenue they would otherwise lose out on).

The easiest way for governments to create effective short-term rental compliance as quickly as possible is to bring all compliance-related services online. Creating an easy and straightforward digital experience lends STR operators a helping hand. And by doing so, governments can more reasonably expect operators will find the information to properly comply with local ordinances and requirements.

Best Practices for a Positive Digital Experience

While every community has its unique aspects, a positive digital experience for STR host compliance will feature a number of best practices that make it easy for new and existing hosts to increase their short-term rental compliance without taking up valuable staff time. Here are some best practices that governments can include to accomplish that goal:

An Easily Accessible FAQ Page

Often, it’s the little questions that can take the most time and, ultimately, will be ignored if answers can’t be found easily. But when it comes to STR rental compliance and enforcement, the little things can compound and lead to big problems. Rather than have STR operators call and wait on hold for answers to common questions (or worse have to make an in-person trip to an office), having a thorough, yet accessible Frequently Asked Questions (FAQ) page can alleviate the stress not only for the STR operator looking for information but the staff member who responds to emails or phone calls.

Ski towns are traditional havens of vacation and short-terms rentals. Breckenridge, located in Summit County, Colorado, is no exception. Summit County’s digital experience for STR information and compliance puts their FAQ in an easily viewable are of their website, and features a thorough, yet simple, approach to answering questions.

Governments can include a variety of vital information in an FAQ, such as:

• The lifespan of an STR license/permit
• The permit/license cost
• Tax rates
• Zones or boundaries where short-term rentals are allowed
• Required inspections
• Any occupancy caps or the maximum nights allowed per stay
• Relevant information about new regulations including history, justification, and enforcement

As with Summit County’s FAQ, each local government’s host compliance FAQ should be adapted to include those issues particular to their area and reflect unique questions that may have been repeatedly answered by staff previously. It is also important that contact information be included on the page so that if the FAQ does not resolve the question an operator has, staff can easily be contacted by phone or email.

A glossary or definitions page can also supplement an FAQ page. Not only will this help operators better understand issues referenced in ordinances, but having a clearly-stated definition can help reduce disputes down the road. Common terms for STR glossaries can include definitions of: short-term rental, accessory dwelling unit, primary residence, owner occupied, non-owner occupied, business license, host, conditional use permit, and more.

Post Regulations Clearly

Just as important as giving easy access to answers to frequently asked questions, a positive digital experience for host compliance requires that relevant regulations not only be posted in an easy-to-find way, but clearly state both the regulations and what requirements must be met by operators. This can be handled either by posting the actual STR ordinance or highlighting the relevant parts of an existing ordinance to make it easier for hosts and residents to reference.

Much like with the FAQ, compiling and highlighting important aspects of the ordinance, such as tax rate or license requirement, will help reduce the number of calls or emails directed to staff to answer these common questions, taking up valuable time resources. Clearly stating the expectations required of hosts on the website reduces the number of potential future complaints regarding enforcement later. Pete Roque, Code Enforcement Director for 4 Leaf, Inc., worked with the City of Garden Grove, California, when developing their short-term rental program and discusses in further detail the ways that clearly posting regulations can positively impact the experience for both operators and government staff.

Digital resources also give governments the opportunity to do more than just post an ordinance for review. While ordinances are usually created to increase safety or generate funds that will benefit the community, that context can be lost when an operator only reads the actual requirements. Governments can use the digital experience to connect the impact of STR compliance on communities. Los Angeles City Planning’swebsite on home-sharing includes videos that help create the bigger picture of STR ordinances in the community.

Requirements for a Contact Person

Some short-term rental hosts do not live in the state in which they operate their short-term rental. As a result, some local governments choose to require hosts to have a local person to respond to complaints related to the remote host’s short-term rental. This comes into play if a loud party or some other code enforcement issue requires interaction when code enforcement is unavailable to resolve the complaint (weekends, for example). Rather than involve the police in STR-related issues, some local governments require a local contact tied to the operator be available.

If a government has this stipulation, it is important that this information is clearly found on their website as well as the requirements needed for this contact person. This can include having physical copy of the contact person’s phone number for guests when staying in a short-term rental, that the contact person live close enough to the rental that they can get there within an hour to resolve a complaint before police or code enforcement need to get involved, or other site-specific issues.

Be Thorough About Non-Compliance

Just as it is important that information and ordinances be included in a way that operators can easily understand, information about zoning, renewals, and enforcement of non-compliance penalties should also be convenient for operators to access. Showing operators the timelines related to compliance and non-compliance, provides information up front to operators while also serving as proof that the operator should have known about non-compliance should they violate an ordinance later.

This can also apply to other important aspects of host compliance. By posting renewal information governments can both notify operators of the length of their short-term rental license but remind them that they will be emailed a reminder a month before their license expires. Posting maps of zones and areas where short-term rentals are allowed, as well as any caps that might apply in those areas, will help operators better visualize where a property may be compliant in one part of a county, but not compliant in another.

Most importantly, any information about compliance ordinances should also include equally clear information about enforcement plans. Sharing enforcement plans online benefits both hosts and general residents, as it promotes transparency for local government. Governments using rental monitoring software, such as Granicus’ Host Compliance tools, can also show operators that compliance is based on monitoring and that particular hosts are not “targeted,” even sending operators a screenshot of their non-compliant listing as solid proof that they need to get into compliance, remove their listing, or pay a fine.

Through this kind of open communication with operators, Milpitas, CA saw 68% compliance from operators after sending just one letter alerting to non-compliance issues and including the steps need to become compliant.

Outlining the complaints process for people who live near short-term rentals and guests who are staying in short-term rentals is another way of increasing understanding of what is expected from operators, while providing a resource for residents and guests that can improve the relationship with the community. Having a dedicated STR hotline can save other departments time and money, and ensures incident reporters feel heard.

Provide a Pre-Registration Checklist

Many short-term rental operators visiting a government’s website might be taking their first steps into the STR market. Even for experienced operators, knowing what is expected before registering for a permit can save time and hassles, while improving the relationship with the government office.

An online checklist can help accomplish this, including items that operators will need when registering, such as:

• Proof of residence
• Driver’s license or state ID
• Completed safety inspection
• Conditional use permit
• Short-term rental permit
• Tax registration (which can also be called tourist tax, transient occupancy tax, tourist development tax),
• Resolution of any current code violations
• Insurance requirement

This kind of checklist helps potential operators understand what is needed ahead of time. Including links to relevant forms and information on the checklist will also help them save time on locating the correct forms or documentation that must be gathered before their application. By being clear and upfront, the digital experience becomes one where the user feels that their time is being respected and can help reduce future friction as operators can clearly know what is expected from them and why.

Communication is Key

The clear thread running through all of these best practices for establishing a positive digital experience for host compliance is communication. Communicating with short-term rental hosts and community members to get everyone on the same page about what the regulations are, how to follow them, and how it will be enforced is a challenge for any government.

A website, and the digital experience it offers, is only the initial step to that communication, however. After communicating expectations and the reasoning behind them, governments should continue to strive toward making it easier for STR hosts to get their license, pay the right amount in taxes at the right time, and resolve any issues that might run afoul of ordinances.

Want to learn more about the short-term rental activity currently happening in your jurisdiction? Book a complimentary short-term rental assessment at granicus.com/str-consult.