Would you be comfortable with a tech company knowing your name? What about your address? How much you make? How many people come in and out of your house? Whether or not you’re following the law?
Hosts throughout Charleston will sign up for just that — and much more — on July 10, when they begin applying for permits to legally list their homes on short-term rental websites like Airbnb and HomeAway.
The year-and-a-half-long struggle to regulate the booming short-term rental market drew people from both sides of the aisle: anti-party house neighbors and affordable housing advocates, who say short-term rentals limit traditional rental options and drive prices up, versus rule-following hosts, who say they depend on the extra income.
It all ended with an ordinance that most hosts consider to be especially prohibitive: whole-house short-term rentals are banned throughout the city, only owner-occupied properties are eligible for a license, and only properties in the National Register of Historic Places are allowed to rent short-term in the peninsula’s Old and Historic districts.
Beyond the bickering, enforcement of the April ordinance that effectively legalized the estimated 1,000 to 2,000 short-term rental listings in Charleston has remained a seldom-discussed topic. District 3 Council member James Lewis was skeptical about the lack of strategy the night Council passed the “Airbnb law,” though the city had hired three full-time employees solely dedicated to enforcing the rules by that point.
“We’re gonna open up an entire city,” Lewis said at the time. “You got three people, and you’re gonna tell me that you’re gonna be able to track this stuff?”
The three staffers (Cody Shealy, David Spooner, Jr., and Peter Buck) will soon benefit from some pretty sophisticated and far-reaching technology as they ramp up their efforts to crack down on non-compliant rentals on the peninsula and beyond.
According to a request for proposal issued on April 27, the City of Charleston is accepting bids from various companies for a third-party system that can offer “continued monitoring and support for prosecution” of illegal or non-compliant short-term rental properties listed across a variety of platforms.
The city is looking for software to provide weekly screenshots of all active listings, both legal and illegal, along with the “full address and contact information for identifiable STRs,” and the contact information for listings that can’t be readily pinpointed. Whichever firm is hired (the deadline for companies to submit bids is May 22) will also be expected to assist the city with Livability Court cases against its own citizens.
In the past few years, a crop of companies have popped up to help renters manage their short-term rentals by doing things like greeting guests and managing bookings. At the same time, as cities grapple with a boom in investor-owned short-term rental properties that sometimes come with disruptive guests, companies have stepped in to help regulate these rentals from the other side of the door.
One such company is Host Compliance, which lists municipalities such as Pasadena, Calif., Durham County, N.C., and Fort Lauderdale, Fla. as clients. Based on the low end of STR listing estimates, 24/7 monitoring by Host Compliance would cost the City of Charleston at least $57,750 a year.
The city of Asheville, N.C. issued an average of 10 short-term rental violations a month before it signed a contract with Host Compliance. After, average monthly violations rose to 72, according to one news report.
Host Compliance did not answer a request for comment. A different STR software company, STR Helper, told CP they were bidding for the contract with the City of Charleston and complying with a city-mandated “quiet period” before the contract is awarded.
Allen Atamer, the CEO of Toronto-based LTAS Technologies, is one of the STR compliance contractors hoping to service Charleston.
Atamer, 44, says he started the company in 2011 to help state DMVs catch illegal car dealers on Craigslist. Roughly 20 to 25 percent of vehicle ads on Craigslist involve some sort of title or odometer fraud, according to his research. LTAS Technologies works with 15 state customers, including North Carolina, to help catch these fraudulent dealers.
“We’ve moved to short-term rentals over the past three years because we realized there are municipal concerns of regulating this type of sharing economy,” he says.
Now, the majority of his 10-employee company’s work involves helping to police online short-term rental listings in places like Santa Fe, N.M. and Sonoma County, Calif. through its Harmari monitoring software.
With a combination of public county property records, credit bureau data, information culled from social media websites like Twitter and Facebook, and of course, short-term rental listings themselves, Harmari can compile enough information to triangulate the precise location, and owner, of a property listed for rent across a range of websites, information that is usually unavailable to the typical front-end user. The triangulation task is especially time consuming because, according to Allen, Airbnb scatters the true location of a rental up to 0.3 miles on its in-app map. Airbnb declined to clarify whether it does this or not.
Allen’s Harmari software also tracks reviews and booking schedules (how many nights a listing is taken) to estimate how much money an STR operator is making.
Identifying properties requires extensive cooperation from municipalities, and Charleston is eager to help.
“We’re going to supply all of our [Tax Map Numbers], and once we supply them, they’ll be able to monitor,” says Charleston Director of Livability and Tourism Dan Riccio. “The legal ones permitted by the city will be given so they won’t duplicate, and they’ll be able to find the ones that are not legal. They’re looking for everything.”
As of now, the city has successfully prosecuted just 77 short-term rental violators, according to Riccio.
Back when short-term rentals were illegal everywhere except Cannonborough-Elliotborough, an appellate court overturned a decision against an illegal short-term rental after finding that the city’s ordinance at the time did not allow for advertising, in the form of a listing, to be used as evidence in court. The new ordinance does, and the city will begin building comprehensive files on hosts within city limits using those listings as a starting point.
Even then, the city’s STR enforcement staff will take one extra step before deciding to move on with any suspected violation: park outside of a property and watch.
“We will be able to respond to the location and gather evidence to complete the case,” Riccio says. “Evidence like suitcases, any individuals, anything indicative of a traveler — out of state tags, things of that nature.
“What we’ll obtain from the software is enough, according to the ordinance, but it’s always prudent to have additional evidence in court,” Riccio says.
This doesn’t necessarily mean renters should expect black cars outside of their short-term rentals come July. The city will first focus on called-in citizen complaints before it works to build more complicated cases.
Those unlucky enough to incur the city’s wrath will find themselves with a pretty steep bill. The maximum fine for violating any portion of the short-term rental law, whether by operating without a license or outside of the strict law’s parameters, is $1,087 per offense. Offenders are also subject to 30 days in jail, though Riccio maintains his department isn’t looking for jail time.
Michelle Richardson is the deputy director of the freedom, security, and technology project at the Center for Democracy and Technology, a Washington, D.C.-based Internet user advocacy group.
Richardson argues that while it’s constitutional for governments to collect publicly available data, they should err on the side of caution and collect as little information as possible.
“There’s often an attitude of ‘collect now and think about how we’ll use it later,’ and that’s incredibly dangerous, because usually when it gets into governments’ hands, it has a mission creep,” she says. “An agency will collect the information for one purpose, but suddenly it starts bleeding into something else. Suddenly we’re sitting on this giant pool of data for some purpose, maybe we should look at it for something different while we’re at it.”
Richardson says that governments can take many steps to protect the sensitive information it collects, including setting data destruction requirements or explicitly limiting the purposes the data is used for.
Riccio says the chosen software contractor will retain all of the collected information. A city spokesperson told CP that the city’s legal team will consider privacy steps once a company is selected.
Allen, the CEO of LTAS Technologies, argues that privacy concerns should not be directed towards his company.
“Are county property records private information?” he asked. “Are Facebook posts broadcast on someone’s timeline considered private information? Are tweets considered private? Because if they’re not, those are the exact mechanisms we use to do the ID work.”
He estimates about 3,000 short-term listings, including timeshares, in the Charleston area. Twenty-three percent of that inventory is controlled by a little over three percent of operators, according to his calculations.
“I understand that when you’re talking about someone’s home in a residential context and someone sitting on a front porch pretending to be a cable guy and using a telephonic lens, that’s totally in the different side of the spectrum,” he said. “These absentee owners are the ones causing the problem.”
A representative for Airbnb declined to comment for this article, but pointed CP to information about its own in-house pass-through registration system first developed in coordination with the city of Chicago. The system allows hosts in a municipality to not only register for a license within the app, but to also submit themselves to ordinance enforcement with the information collected. The shortcut is now used in New Orleans and San Francisco, as well.
“In all three cities, the system enables hosts to register directly through the Airbnb platform, with data remitted directly to local authorities through a secure API,” according to a statement from the company.
The listing website HomeAway did not respond to a request for comment.
One STR operator, who asked for his name to be witheld, rents out a room in his house on the peninsula through Airbnb. As a renter himself, he’s not legally allowed to operate under the city’s requirement that a short-term rental be owner-occupied.
“I think it’s like everything, people are going to still try and do it,” he says. “They’re gonna see how they’re going to go about enforcing it, then try to find ways around it.”
After learning more about the city’s planned enforcement tactics, he backtracked on his pledge to keep listing his home past the 90-day grace period that began after the city ordinance passed in April.
“That’s gonna make something that was a small problem into a bigger problem, because now you have all these officers in your neighborhood taking pictures, and it’s always with the purpose of cutting down on short-term rentals, but it can easily morph into something else.”