Data and technology is a long-term solution for short-term rentals
A San Diego-based company is changing the way many cities and counties across the United States collect tax revenue from short-term home rentals.
For tourism-intensive regions, Deckard Technologies has a product that is gaining traction: Rentalscape, a solution that combines big data, computing, cloud services and machine learning to track every listing in every market where homes can be rented through services such as Airbnb. and VRBO.
Placer County contracted with Deckard in 2020 after issuing a tender for a project that could automate the tracking and collection of the Transient Occupancy Tax (TOT) that is charged for short-term rentals , hotel stays, etc. Doug Jastrow, Director of Revenue Services for Placer, said the solution solved that problem, recouping its $140,000 cost in a short time.
The county’s contract with its former supplier had expired, and Jastrow said Placer — which encompasses part of Lake Tahoe’s hot short-term rental market — wanted a more advanced solution.
“The beautiful thing with Deckard about this – something that I still appreciate today, even though it’s been a few years – is in a very, very short period of time they had a working product by the date we needed it, which was December 1, 2020,” Jastrow said. Techwire. “It allowed customers to do exactly what we needed, which was to apply for a TOT certificate and hand over the money they had collected. It was a very elegant portal that they were able to create for us. We’ve been with Deckard ever since.
Jastrow noted that Deckard, which was founded in 2018, was still relatively new when Placer signed with them.
“We were impressed with what they showed us when it came to the customer service experience: guiding a customer through the online portal to complete an application and make a payment,” Jastrow said. “Also, a big selling point when we signed with them, which we had never seen before, was their ability to predict bookings… looking at when there is movement and change. It was very impressive for us.
Jastrow said full-time residents in general viewed the recovery of previously lost income as a positive thing.
“People know the money goes back to the community,” he said. “TOT goes to infrastructure projects where the money was raised.”
Deckard’s Rentalscape includes a county employee dashboard with all available data.
“Training time was minimal,” he said. “It’s a very intuitive layout on how to use their reports.”
Another tourist-heavy jurisdiction, Big Bear in Southern California, also found Deckard’s solution a winner.
“Big Bear Lake is a tourist community,” said Larry Vaupel, director of tourism management for the town. “We have two ski resorts. In the city, we have 2,600 vacation rentals – we have about 25% full-time, 75% part-time residents,” some of whom rent their homes through short-term rental platforms like Airbnb and VRBO.
“We have an ordinance that regulates this, so we needed software to help us monitor compliance with our ordinance,” Vaupel said. Techwire. “And that’s where Deckard, with the Rentalscape program, comes in.
“Before, it was pretty much the honor system. It was: “We expect you to pay your TOT if you rent out your property. We ask you to come and get a TOT license number, basically, and pay your TOT for those stays. We were actually one of the first cities in the country to regulate vacation rentals because they have become so popular.
Vaupel therefore began looking for a solution that could keep up with the booming market – and recoup tax revenue that had previously gone unreported and uncollected.
“Deckard came over and said, ‘We can make sure people in your jurisdiction are licensed, and how often do they rent and how much do they charge. They fetch Airbnb and VRBO for data and then create a dashboard for us to log in and see all the activity happening in our jurisdiction on those platforms. It’s a great way to forecast revenue, for example, and also forecast headcount. »
Vaupel said when the city revised its rental ordinance, it did so in part based on Rentalscape’s capabilities.
“When we developed our new order, we required things that we know can be tracked through Rentalscape…a license number on all listings.” The new order also requires VRBO, Airbnb and other rental companies to submit TOT revenue on behalf of landlords, who never have to collect tax from renters.
“The owners never see it,” he said. “It comes right back to us, and the owners appreciate it.”
Big Bear signed with Deckard in June 2021.
“It’s fantastic,” Vaupel said. “It saved us a lot of work, and when we issue a citation, we have all the evidence we need. People are amazed when we show them the evidence we have. People have actually accused us of somehow getting into the back end of their Airbnb site because it shows how many stays, how much they charged the guest, were they ‘a three-night or two-night stay, how much revenue they generated per month, all reviews. We have all this information.
Big Bear pays around $70,000 a year for Rentalscape. In the current fiscal year, the city has issued approximately $500,000 in citations to landlords for noncompliance.
“Our fine for operating without a license is $5,000,” Vaupel said. “So yes, it pays for itself – not just on licenses, but also on cost savings for staff.”
Nick Del Pego, CEO of Deckard Technologies, said his company’s success had its roots when he and founder Greg Rose worked for Qualcomm.
“QualComm is one of the last bastions of true innovation in the world,” said Del Pego, who is based in the San Diego area. “I had this crazy R&D experience with Qualcomm, doing amazing things. We were doing data science on everything – chipset manufacturing, code development, IP generation….
“Founder Greg Rose said, ‘If we took all this crazy data science out of Qualcomm, I think we could really help the government with real estate because it’s really important to them…but they don’t. don’t really have a way of knowing what’s going on. . They cannot keep pace with technology.
“With technology happening,” said Del Pego Techwire“real estate has gone from the back of the magazine and the newspaper to Zillow and Realtor.com and Airbnb and VRBO, and if you’re doing business, you’re doing business digitally – and it’s going really fast. And he (Rose) had this premise that with our knowledge, we could extract data on what is happening commercially in this space, and we could leverage our skills to help.
“So we’ve grown from six people four years ago to 46 people, and we’re doing it in 60 jurisdictions in about 15 or 16 US states. We have two products and they both revolve around what I call companies. operating in the residential real estate markets – home flippers, renovations, short and long term rentals….
“We consume these ads – we use machines to crawl them on a daily basis. Every day I will check this ad: is it still online? Have they taken a reservation? Has the schedule changed? Once a week, I’m going to look at this ad and ask, “Did they change the text?”
“Computers can touch these things every day. Computers can discover the changes. Computers can do things like… determine what the minimum stay is. To do all of this with human personnel would require armies. I capture this stuff every day. My computational costs are low. We’ve been in this game with Big Data for a long time, we’re doing everything in AWS, and we’re able to find all of these nuanced details.
Del Pego said the best decisions are based on the best data.
“A lot of this (software) is about understanding what’s really going on, so you can come up with a good policy that really fits the neighbors, the business owners, all the players in between,” he said. . “Business thrives if you regulate it well. Residents have no complaints about noise, garbage.
“I use computers, machine learning and mastery of technology to give all this information,” he said. “It makes it very easy to digest the nuances of what’s going on in this ever-changing landscape.”