A new California startup threatens the gravy train that many Airbnb hosts have enjoyed the past few years. Host Compliance LLC, founded in 2015, is working with municipalities across the United States to enforce licensing and tax regulations on short-term rentals. This means the end of the road for illegal Airbnb hosts and compliance for those currently skirting local laws.
Until the emergence of Host Compliance, enforcing city ordinances for short-term rentals was challenging. Cities typically hire individuals to manually scan Airbnb listings, attempt to identify the address, and then check their records to see if the homeowner has acquired the proper license and paying occupancy taxes.
The San Francisco-based company has automated the process making it far more efficient and cost-effective for cities to monitor Airbnb rentals in their cities. According to the Company’s website, it offers the following services:
- Implementing fair and effective short-term rental ordinances
- Identifying privately-owned short-term residential properties on behalf of local governments
- Monitoring and enforcing registration, permitting and lodging tax compliance
- Registering, processing and verifying permit applications (online and offline)
- Providing 24/7 telephone hotline services that make it easy for neighbors and other stakeholders to anonymously report and resolve issues with short-term renters without involving law enforcement officials
- Identifying tax under-reporting and other fraudulent practices
Though Host Compliance doesn’t explain how they identify non-compliant and illegal hosts, we can assume that they must be scraping the Airbnb website for sufficient information to match Airbnb listings with public property ownership records. Property addresses are not included on Airbnb listings and to our knowledge, Airbnb is not supplying this information to Host Compliance.
Host Compliance can only acquire the approximate location and the first name of the host from Airbnb listings. In some cases, this could be sufficient information to obtain the property address via various online services such as whitepages.com or spokeo.com.
The benefits of Host Compliance’s Short-term Rental Address Identification service indicate that the service will not identify all listings. The service provides:
- Full address and contact information for all identifiable STRs in jurisdiction
- All available listing and contact information for non-identifiable STRs in jurisdiction
Host Compliance’s happy homes logo may leave many hosts frowning. The company aims to put an end to illegal hosting and tax avoidance by Airbnb hosts.
The Company does not give any guarantee or estimate as the percentage of listings for which it can accurately identify an address. Likewise, Host Compliance’s Rental Activity Monitoring and Tax Collection Support service must also face accuracy issues. For Airbnb listings, the service is tracking the listing calendar and reviews to determine the number of booked days and then calculating the approximate tax revenue the host should be paying. However, not all guests leave reviews and hosts often block out their calendars for reasons other than guest bookings.
Host Compliance is obviously doing a very good of selling the merits of their services to local governments. The client list on their website is already substantial with municipalities across in multiple states already signed up. St. Paul and Minneapolis recently signed contracts with Host Compliance to help monitor new short-term rental licensing ordinance passed by both cities in October 2017. Nashville was reported to have signed a 5 year $1 million deal with Host Compliance to do the same.
At the time of writing, Airbnb has not commented on Host Compliance.