This Digital Sheriff Helps Cities Wrangle Airbnb Rules
DAVID GREENE, HOST:
Airbnb and other short-term rental sites, I mean, they seem like a great model, right? One person gets a place to stay on vacation; the other get some cash for loaning out their home. But there are now more than a million rentals in residential neighborhoods, and this is creating problems for cities and towns. NPR's Chris Arnold reports on an entrepreneur who is trying to tame this Wild West rental landscape.
CHRIS ARNOLD, BYLINE: There's a new sheriff in town - actually, a lot of towns - and his name is Binzer.
ULRIK BINZER: Yeah, Ulrik Binzer.
ARNOLD: OK, and it's Ulrik?
BINZER: Yeah, Ulrik. Yeah.
ARNOLD: You said...
BINZER: Ulrik is fine. It's fine. It's a Danish name, and it's weird. No one can say it (laughter).
ARNOLD: OK, it's not so weird. But anyway, Binzer works in Silicon Valley, and all this started when he and his family were flying back to Denmark to visit relatives. He used to rent out his house on Airbnb, and that'd pay for the whole trip. But then his town banned short-term rentals like Airbnbs.
BINZER: Basically, no debate - just sort of was an agenda item. No one knew about it. But when I saw it in the newspaper, I obviously got interested, mostly out of self-interest at the time.
ARNOLD: You're like, hey, wait a minute - this is paying for my trip back to Europe.
BINZER: Yeah, exactly. That was exactly what happened.
ARNOLD: Binzer thought, why ban Airbnb rentals? I mean, this is hurting me. What's going on? So he went to a town meeting and started reading up - this was four years ago - and he realized that cities were really struggling with short-term rentals.
SEAN BRAISTED: Here in Nashville, we had a problem.
ARNOLD: Sean Braisted works in the code enforcement department in Nashville, Tenn. He says, for one thing, it's been hard to get homeowners to get rental permits and pay taxes on the rental income. But also, he says, Nashville is a big party town.
BRAISTED: And so we would have problems with essentially party houses that would, you know, try to pull as many beds into one house as possible and cram as many people in there.
ARNOLD: The city was getting complaints about what was going on in the house or the yard next door.
BRAISTED: We've had complaints about people allegedly having sex parties to doing all sorts of things within short-term rental properties.
ARNOLD: The city only allows Airbnb-type rentals in residential neighborhoods if the house is your primary residence. That's to cut down on investor-owned party houses or just too many investor-owned short-term rentals. But Braisted says the rules were hard to enforce. For one thing, you often don't see the actual address of the property on a site until you agree to rent it. So Ulrik Binzer, back in California, he realized cities trying to enforce this...
BINZER: It was like bringing a knife to a gunfight, right? The traditional way that cities manage compliance is a very manual method, right? So 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 sort of like a sting operation. It was like, you can't do that when you have thousands of these, right? So...
ARNOLD: So Binzer saw an opportunity to use his technology background to help get all this under control. He got some software developers on board, and they knocked together a bare-bones startup company.
BINZER: We went out and started talking to cities and very quickly got to something like 20 customers, like, within a couple of months.
ARNOLD: Fast forward to today, and Binzer says his company - it's called Host Compliance - is working with more than 300 towns and cities across the U.S. and Canada. Nashville is one of them. The city is using Binzer's technology to see if properties on the short-term rental sites have the right permits. Back in the Nashville permit office, Braisted explains...
BRAISTED: They crawl the Internet through those sites, and then they match those up with property records, assessor photos of the front of the properties.
ARNOLD: Binzer says his company uses artificial intelligence software to figure out the address and the owner, then people renting without a permit are told to get one or stop renting. And in Nashville, Braisted says, in just two years, the city is bringing in 50% more money each year in short-term rental taxes, and the crackdown has found 2,500 rental operators who are breaking the rules. So what does Airbnb itself think about all this? Spokesman Christopher Nulty didn't want to talk about any one specific company, but...
CHRISTOPHER NULTY: 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, you know, tattle on people.
ARNOLD: Nulty says there are privacy concerns, and he says, well, you know, what's next? Are cities going to start hiring companies to check, if you buy a sink at the Home Depot, that you've got a plumbing permit? Ulrik Binzer says, look - he knows that Airbnb and the other sites are not his biggest fans.
BINZER: But I think, in the long run, they all realize that if this is just the Wild West, the pendulum is going to swing the other direction, and there's going to be so many restrictions that it will destroy their business.
ARNOLD: Airbnb has been getting into legal battles with cities over, among other things, how much information it needs to hand over for enforcement. Binzer says his company lets cities get around that tug of war and get what they need to enforce the law.
Chris Arnold, NPR News.
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