To help solve the problem with enforcing short-term rental rules, a U.S.-based startup developed an AI software for monitoring rental properties.
You may not have heard of Ulrik Binzer. But, his technology is helping over 300 cites and towns in the United States and Canada enforce short-term rental rules.
Airbnb has over 5 million listings worldwide. In the United States, the number of adults using the service amounted to 33.9 million in 2017, and according to Statista, the figure could reach 45.5 million by 2022.
As more of these short-term rentals pop-up in residential neighborhoods, a couple of issues soon followed.
Visitors were buying up too many rental properties, which pushes up housing cost. Also, the parties were getting bigger and more challenging to control.
In a statement to NPR, Sean Braisted from Nashville‘s code enforcement department said:
“We would have problems with essentially party houses that would try to pull as many beds into one house as possible and cram as many people in there. We’ve had complaints about people allegedly having sex parties to doing all sorts of things within short-term rental properties.”
As a result, many cities in the United States, including Nashville, started introducing rental rules to address these issues. The problem was that the rules were hard to enforce.
Since you can’t see the actual address until you rent it, cities were forced to manage compliance one property at a time. Not only was the method slow and ineffective, but it also came with a high cost.
A Silicon Valley tech enthusiast, Ulrik Binzer noticed the problem.
Speaking to NPR, Binzer said:
“They essentially go and do a drive-by, or they try to book the property so they can get the address, and then they catch them, and it’s like a sting operation. You can’t do that when you have thousands of these, right?”
No, you can’t. Using his technology background, Binzer decided to curtail the growing problem.
Technology to Regulate and Enforce Short-Term Rental Rules
Along with some software developers, Binzer founded a start-up company, Host Compliance, to help cities enforce short-term rentals rules.
The company uses artificial intelligence software to figure out a rental property’s address and its owners. Also, it ensures that the properties have the right permit before it could be rented.
Host Compliance got 20 customers within a couple of months, says Binza. Today, the company is working with over 300 towns and cities across the United States and Canada.
The software works like a charm.
After two years of using Host Compliance’s software, Nashville was bringing in 50 percent more money annually in short term rental taxes, said Braisted. Also, city officials were able to crack down on about 2,500 operators who were breaking the rules.
What does the most popular short-rental site, Airbnb, think about the technology?
In a statement to NPR, Airbnb spokesperson, Christopher Nulty, said:
“We just don’t think that the best approach here is for cities to turn that responsibility over to another company whose sole responsibility is to tattle on people.”
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