U.S. vacation rental revenue $ 17.7 billion in 2023Increased from $ 10.3 billion in 2020. And the average unique available list Airbnb and Vrbo short-term rental properties are expected to grow 20% from 2019 to around 1.3 million this year.

The sharing industry began with individual owners looking for ways to rent unused rooms and earn a few dollars extra, but that’s no longer the case.Hosts with multiple units Key driver According to an analysis released by CBRE Hotels’Americas Research, this short-term rental economy

why?Because it is a short-term rental Make 30% more profit on a daily basis For investors rather than long-term leases.

Because it is difficult for local governments and consumers to pinpoint the exact address of a property on platforms such as Airbnb and Vrbo, owners unknowingly or otherwise otherwise have schools, fire departments, and other important communities. You can also avoid the short-term rental occupancy tax on your property. service. Also, short-term rental lessors can lead to increased noise and the need for increased garbage and police, which is often the focus of discussion among rental property owners, neighbors and local governments. ..

Short-term rentals stay here, so it makes sense for local governments to manage them well rather than trying to ban them. So how can the city council make the best policy decisions regarding the management of these rental properties? How can I collect a temporary accommodation tax, also known as a hotel tax or short-term accommodation tax? And how can they keep pace as the future of tourism continues to evolve?

Below are five important considerations.

1.1. Short-term rentals and hotels are similar, but different.

AirBnB started with many individuals renting additional rooms on the platform, but today most short-term rental hosts own multiple properties and are investors or businesses renting homes, apartments, guesthouses. In fact, Vrbo doesn’t even allow shared space to be rented, saying that the host promises to provide a private experience. Hotels are accustomed to paying accommodation taxes, but rental owners and hosts may not be aware of the requirements. Platform rentals can be much more difficult to track, as addresses and owners often do not appear on the online platform and are offered privately only after the booking has been made.

The Philadelphia Institute for Economic Policy Overall, we have found that the transition from traditional hotels to STR accommodations often leads to unreliable tax payments. Also, the economic cost of these assets to neighbors (meeting the needs of additional garbage picking, police and other services) can outweigh the profits unless appropriate taxes are collected, and the STR is the same as a hotel. It also suggests that it needs to be subject to taxation and regulatory requirements. ..

One of the big differences is that hotels are in specific zones and often have a specific number of rooms, while garbage, police and other services are designed to accommodate higher tourist levels. There is a possibility that short-term rental properties will appear everywhere, such as in residential areas that are not available. It is difficult to project each wave because their number increases and decreases dynamically.

2.2. All short-term rental activities are “local”, so it is important to assess the problem and its location.

Short-term rentals in some residential areas can increase noise, garbage, and even crime, but in reality, only a small percentage of these properties usually cause problems. City and county governments need to be able to respond to complaints, but they need to review the data to anticipate where, where, and when problems may occur and make the best decisions. there is.

Another concern is the potential impact of short-term rentals on affordable homes. Are locals unable to reach home prices because of short-term rentals, or are they simply increasing the value of the area? The impact of these rental properties on home prices depends on the specific region and the definition of affordable home. The more data cities you have, the better decisions you can make.

Access to information on short-term rentals down to the real estate level can help the city government.

  • Assess potential zoning related issues.
  • Enforce regulations more appropriately and address potential complaints. In small communities and cities, it may be easier to crack down on a complained property. In larger, more rural counties, such as the San Bernardino desert and mountains, police officers can take up to three hours to reach remote areas. Cities and counties may place officers in areas that tend to receive the most calls on Friday nights.
  • Quickly find owners of new short-term rental properties, follow local rules and best practices, and ensure safe and fair operation. This makes it possible to prevent proactive problems rather than post-incident problem mitigation.

3.3. Voluntary collection contracts can have costly trade-offs.

Airbnb and other contracted people will automatically collect taxes on stays booked on the platform, helping the city government save time and effort. With VCA, data is aggregated into a collection from a list of specific zip codes (not a specific name, address, and amount of collection).

However, there is a major trade-off in allowing platform providers to collect transit tax in this way. City and state governments have no way to verify or audit the accuracy of these payments.

No information is available about where or how long the short-term rental took place (days, weeks, 30 days, or a year) and tax requirements may vary depending on the length of stay. Some local governments are also considering minimum stay requirements to avoid renting a one-night “party house” on weekends. The number of lists (in a property) because the property owner may have multiple lists for one property, or worse, one license used for multiple properties. On the other hand, it is not useful to know only).

VCA does not have built-in rentals booked on other platforms or offline, so you should use VCA not only on Airbnb, but also on Bookings.com, Tripadvisor and Vrbo. According to Statista, you may still miss 25% of the revenue you don’t generate online.

4.4. Short-term rentals are more than just rentals. The entire ecosystem has grown to support them.

In addition to short-term rentals, there is also a huge, fast-growing business ecosystem focused on supporting the needs of hosts and guests that local governments need to know. This includes thousands of companies offering everything from guest arrival welcome services, cleaning services, booking and synchronization software, local activity experiences, grocery deliveries, emergency repairs, and more. Local governments need to understand this ecosystem regarding local requirements for registration, tax, compliance, certification, and licensing.

5.5. Technology helps.

County or city cannot control what cannot be seen or evaluated. Artificial intelligence, software, and analytics tools help governments automatically detect, manage, and report short-term licenses and temporary accommodation taxes. Some data mining solutions identify real estate that operates both legally and illegally in a particular area as soon as the local government advertises to allow short-term rentals and goes online.

This data is often the key to proactively addressing new rental properties before the property owner makes the first reservation. Early detection of non-compliance issues can guide potential owners of rental properties to compliance and provide appropriate education to become good neighbors. This is essential to minimize the negative impact on the community. Also, operating facilities rarely get in the way of their neighbors and rarely get complaints about noise, garbage, parking, and other issues.

In addition, technologies such as noise detection devices used in Hollywood, Florida and Henderson County, Nevada Home Wi-Fi routers that can detect unusually high levels of activity as part of a short-term rental permit can help you manage these rentals. City and county governments need to look only at best practices in place in other counties.

Short-term leasing is an evolving and fast-growing industry. However, with well-regulated and wise policies, markets can benefit local governments.