How Local Governments Manage the Increase of Short-Term Rentals

How can local governments manage the increase of short-term rentals? The short term rental industry is expected to experience substantial growth in the near future. This is largely due to the increasing popularity of short term rentals as a viable alternative to traditional hotels, particularly among millennials and Gen Z travelers. The COVID-19 pandemic has also accelerated this trend, as people are now seeking out more private and isolated accommodation options. Furthermore, the rise of online rental platforms such as Airbnb and Vrbo has made it easier than ever for individuals to rent out their homes or spare rooms to travelers. As a result, industry analysts predict that the short term rental market will continue to expand rapidly over the next few years, with more and more people opting for this flexible and cost-effective form of accommodation.

With more properties being used as short-term rentals, local governments and municipalities need software solutions to stay on top of the increased activity. As the popularity of short-term rentals continues to grow, local governments are grappling with how to regulate them. While short-term rentals can provide economic benefits to both property owners and local businesses, they can also create issues with noise, parking, and tax implications. In this blog post, we will discuss some of the ways that local governments manage the increase of short-term rentals.

1. Zoning Regulations

Zoning regulations are one way that local governments can manage short-term rentals. By creating specific zones for short-term rentals, local governments can control where they are located and ensure that they are not causing issues in residential areas. Some local governments have also implemented specific requirements for short-term rentals, such as minimum stay lengths, maximum occupancy limits, and safety regulations. Short-term rental licensing software should include integration with your zoning data, either through GIS Layers or by integration with parcel data, to ensure short term rental applications are only approved if located in the correct zone or zones.

2. Licensing, Registration and Taxes

Another way that local governments can manage short-term rentals is through licensing and registration requirements. By requiring property owners to obtain a license or register their property with the local government, they can ensure that the property is safe for guests and that the property owner is following all local regulations. Licensing and registration requirements can also help local governments collect taxes on short-term rentals, which can help fund local services and infrastructure.

Local governments often face several tax issues related to short term rental registrations. One of the main challenges is ensuring that property owners are properly registered and paying the appropriate taxes on their rental income. This can be difficult, as many short term rental platforms such as Airbnb and Vrbo are not required to collect and remit local taxes on behalf of their hosts. As a result, local governments may need to rely on hosts to self-report their rental income and pay the appropriate taxes, which can be challenging to enforce. Adding rental registration software provides local governments with the tools they need to manage rental registrations or licenses, as well as a mechanism to collect local accommodation taxes or business tax receipts. For more information about how citizenserve can support your tax collection needs, see this demonstration of our Municipal Business Tax Receipt Software.

3. Enforcement and Penalties

Local governments may also use enforcement and penalties to manage short-term rentals. This can include fines for property owners who violate zoning regulations or fail to obtain a license or registration. Enforcement can also include inspections of short-term rental properties to ensure that they are safe for guests and comply with local regulations.

4. Implementing Short-Term Rental Registration Software

Some local governments have also chosen to add short-term rental registration software, such as citizenserve's e-government software, to manage short-term rentals. Citizenserve's rental registration software includes an online citizen portal that allows property owners to submit a rental registration or license application online. Property owners can also access requirements documents, review their community's rental registration requirements, pay fees online, check their application status, communicate with staff, and request inspections through the online poral.

How Citizenserve's Government Software Solutions Can Help

Citizenserve offers rental registration software, that integrates with our other government software solutions. Check out how citizenserve software helps you save time and money, or learn more about govtech.