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Old Posted Sep 5, 2020, 9:40 PM
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Cities Tap AI to Regulate Short-Term Rentals as Travel Picks Up

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By Jared Council
Sept. 3, 2020 5:30 am ET | WSJ PRO

Cities and towns are tapping artificial intelligence and other technologies to keep tabs on short-term home-rental activity. As the effects of the coronavirus pandemic tear through budgets, some localities hope the tools can identify tax-revenue opportunities.

Even as Covid-19 has rocked the travel industry, short-term rentals have rebounded in the lead up to Labor Day, including in smaller, more-remote destinations.

“Cities and other levels of government are dealing with what has been just an explosion of short-term rental activity over the last five or so years,” said David Wachsmuth, a professor of urban planning at McGill University in Canada. “And it’s a situation where regulation is impossible, basically, because of some of the data-access issues.”

One of the biggest challenges cities face in regulating home rentals is figuring out the addresses, owners and total bookings for a listing. That data is vital for enforcing local ordinances and collecting taxes, but such information typically isn’t immediately available on listings on popular rental sites including Airbnb Inc.

Nashville, Tenn., signed up with vendor Host Compliance, a division of Granicus LLC, in July 2017 to help enforce a short-term rental ordinance it adopted in 2015. Part of the objective was to identify and collect taxes from home-rental operators, and get alerts when new unlicensed listings appear.

Host Compliance uses computer-vision algorithms that can identify the features of a listing photo, including layout and fixtures of a room, and find matches elsewhere on the internet, such as real estate websites, even if the furnishings in a room are different, said founder Ulrik Binzer. The software also uses machine learning to flag owners who might be grossly underreporting taxes, based on an analysis of calendar nights blocked on the listing page. Human analysts are also involved in unearthing information about listings, he said.

Nashville is under a four-year contract with Host Compliance, which costs the city about $250,000 annually. In the first year, the software helped the city increase short-term rental tax revenue from about $4.1 million to almost $7 million, according to records shared by Jon Michael, zoning administrator for the metropolitan government of Nashville and Davidson County.

Garden Grove, Calif., another Host Compliance user, signed up in 2019 for a year-to-year contract at about $16,000 annually. A suburb of Anaheim, the city has a ban on all short-term rentals in residential areas and uses the software to flag new listings, said Pete Roque, a code enforcement supervisor for the city . . . .

Rental-compliance software Harmari STR, offered by LTAS Technologies Inc., uses image-recognition algorithms to figure out duplicate images and listings across sites, which helps winnow down work for human analysts. Chief Executive Allen Atamer said the company uses natural-language processing to analyze reviews and flag when a host might be violating local ordinances, such as posting a listing that isn’t his or her primary residence. Its customers include Fort Lauderdale, Fla., and the Toronto-area ski resort town of Grey Highlands, Ontario . . . .
https://www.wsj.com/articles/cities-...s&page=1&pos=3

Not registering your AirBnB or not paying taxes on your rental income? They are coming for you.
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