Cost-effective solutions to Chelan County’s short-term rental monitoring and compliance problems January, 2019 1
Introdu oduct ctions ons: • Silicon Valley based technology company • Only provider of short-term rental compliance monitoring technology for local governments • Team of seasoned local government technology executives and data-scientists Ulrik Binzer Paul Hetherington Founder & CEO Chief Commercial Officer • • Former COO of 2 VC backed companies Working with Local Government for over • Prior military officer and graduate of 20 years • Harvard Business School Love of technology and efficiency • • Launched Host Compliance when asked Focused on solutions with dramatic impact. • by local town council to study possible Dad, Triathlete and graduate of British ways to address its short-term rental Columbia Institute of Technology compliance issues 2
More than n 150 leadi ding ng citie ties s and counti nties es are looking king to Host t Compli lianc ance e for guidan dance ce, , data and solu lutio tions ns to their ir short-ter term rental al challe llenge nges Check https://hostcompliance.com/clients/ for updates 3
Tell us a bit about t you, Ch Chelan Co County, y, and wh where you are in term rms s of regula lati ting ng short rt-ter term renta ntals? s? • Key New Findings: A great discussion of steps ahead to get to goal go live date. Clarified roles of key players and steps along the way. Everyone is excited to get moving. Will continue strong communication throughout each step. • Considered external consultant for background research, but now more comfortable with the issue. • Legal department can develop the code. • A permit for short-term rentals is currently $100, but planning to increase yearly renewal price and price for initial year. 5
What t are Chelan County’s most st importa rtant nt goals as it relates tes to short rt-te term rm rental tals? s? 1. Reduce noise, parking, traffic and trash-problems 2. Eliminate party houses 3. Reduce STR’s impact on neighborhood character 4. Ensure building safety 5. Improve county’s responsiveness to neighbor complaints 6. Stem STR’s negative impact on affordable housing availability 7. Improve permit and tax compliance to increase tax revenue 8. Ensure a level playing field between law abiding traditional lodging providers and illegal short-term rentals 9. Reduce tension between short-term rental property owners and their neighbors 10.Send a clear message to citizens that the county takes the STR problems seriously 11.Other? 6
Market ket Context: ext: AirBnb nb , VRBO and 100’s of other vacation renta tal website tes s have turned ned vacat ation n renta tals s into a booming g (underground) economy… The short-term rental market has grown 800% since 2011 Market is fragmenting Millions of STR listings 100+ other web platforms Sources: AirBnB, Expedia, TripAdvisor and Booking.com 7
…and in the unincorporated areas of Chelan County we have identifi tified ed 2,015 15 listing ngs, s, repre resenti senting ng 1,410 10 unique rental tal unit its* s* Short-term rentals in the unincorporated areas ofChelan County as of November, 2018 Sources: Host Compliance proprietary data * Host Compliance's pricing is based on the count of listings and rental units that would need be to analyzed and monitored for compliance. In terms of listings, this number is 2,648 as we will expand our search area by several hundred yards beyond the borders of the unincorporated areas ofChelan County to capture all relevant listings. 8
Unincorpor incorporated ated Chelan elan County unty Data ta Details tails 9
The Good: : Short rt-term term rental tals s can n drive ve signi nificant ficant econom nomic ic growth.. th.. Estimated Annual Economic Impact per STR in the City of San Diego $34,907 56 793 1,894 14,127 18,037 Rental Additional TOT Sales Tax City share Total income spending of sales tax Source: National University System Institute for Policy Research (October 2015) 10
The Bad: Short-te term rm rentals ls can displac place long-te term rm tenants, s, alter the neighborhood charact cter r and r raise se legitimat timate parkin ing, , noise, , safety ty, , trash sh and f fairness ess conce cerns ns Conversion of long-term rentals into Increased tourism can change the Visitors don't always know (or STRs can affect housing availability neighborhood character follow) local rules Increased occupancy can have Unfair competition from VRBOs can Short-term renters may not care about negative trash related side-effects cause conflicts and hotel job losses keeping good neighborly relations 11
In some e comm mmuni niti ties s short rt-ter term renta ntals s have caused d significa ficant nt neighborh orhood ood tensi sion on “It is loud, and there is live music and karaoke stuff, and it’s all done outside because of the pool. They’re out in front at 4 in the afternoon waiting for their Uber to come, drunk on the front lawn. ” Emmy Jodoin “We did not buy our house to be living next to a hotel. Would you buy a home if you knew a hotel like this was operating next door, if you wanted to set your life up and raise a family?” Jessica C. Neufeld “Sometimes, when they are outside, they’re playing beer pong just wearing their underwear” Hazel Old, age 11 Source: New York Times article: “New Worry for Home Buyers: A Party House Next Door”, October 10, 2015 12
Withou hout t proper r enforceme orcement nt, , only a fract ction on of short rt-te term rm rental tals s wi will ge get register stered ed and pay their ir fair r share re of taxe xes IN IN GE GENERAL LE LESS THAN 10 10% OF F STR OWNERS VOLUNTARILY GET A PERMIT AND PAY ALL OF GE F THEIR HOTEL TAXES Large potential for increasing permit fee and tax collection
Se Servic ices es tailo lore red d to your r timelin line Pre-Ordinance Post-Ordinance Online Ordinance Assistant Post Ordinance Monitoring tool and Compliance services Webinars Mobile Permitting and Registration Whitepaper Address Identification Peer Introductions Compliance Monitoring APA Short Term Rental Online Course Rental Activity Monitoring Free draft review 24/7 Hotline Consulting and facilitation 14
Ways s we can help lp • Mobile Enabled Permitting and Registration: Mobile/web forms and back-end systems for streamlining Chelan County’s permitting and registration processes and capturing payments, signatures and required documents • Address Identification: Online dashboard with complete address information and screenshots of all identifiable STRs in Chelan County’s jurisdiction • Compliance Monitoring: Ongoing monitoring of STRs for zoning and permit compliance coupled with systematic outreach to illegal short-term rental operators ( using Chelan County’s form letters) • Rental Activity Monitoring and Tax Collection Support: Ongoing monitoring of Chelan County’s STR listings for signs of rental activity. Enables data- informed tax compliance monitoring and other enforcement practices that require knowledge of STR activity level • Dedicated Hotline: 24/7 staffed telephone hotline for neighbors to report non-emergency STR problems 15
To accommodate ommodate any budget, t, our services vices are pric iced d based on the number er of listings ings that t needs to be monitor tored ed Mobile Registration $8.00 /yr Address Identification $22.50 /yr Compliance Monitoring $11.25 /yr Rental Activity Monitoring $15.00 /yr 24/7 Dedicated Hotline $9.00 /yr Note: The exact scope of work can be adjusted to meet Chelan County’s exact monitoring needs in terms of geography, listing sites, listing types and other variables 16
Afforda fordable ble modular lar pric icing ing tail ilore ored d to unin incorp orporated orated areas s of Chelan County’s needs Mobile Registration $11,280 /yr Address Identification $59,580 /yr Compliance Monitoring $15,863 /yr Rental Activity Monitoring $21,150 /yr 24/7 Dedicated Hotline $12,690 /yr Note: Above pricing assumes 2,648 short-term rental listings and based in USD. Host Compliance would be happy to discuss alternative SOWs, contract terms, contract durations and pricing structures if that would be of interest. 17
Modules les can be combin bined ed to meet Chelan County’s exact ct needs (bundle le pricing ng examples es with mobile e form rms) s) Typical Bundles with Mobile Forms I II III IV V VI Mobile Registration Address Identification Compliance Monitoring Rental Activity Monitoring 24/7 Hotline TOTAL ANNUAL PRICE $81,073 $103,291 $110,698 $132,916 $121,066 $150,691 Note: Above pricing assumes 2,901 short-term rental listings and based in USD. Host Compliance would be happy to discuss alternative contract terms, contract durations and pricing structures if that would be of interest. 18
Mobile Enabled d Permitt itting ng and Registr trat ation: n: Simplify fy Ch Chelan County’s regist istrat ratio ion/ n/perm ermitting itting process cess and sig ignif ificantl icantly y reduce ce the administ strative rative costs sts on the back-en end 19
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