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AI Is Helping Cities Get a Handle on Short-Term Rentals

La Quinta, Calif., in the lush Coachella Valley, has turned to an AI-powered solution that mines real estate transactions and other data to zero in on the homes that are operating as unpermitted vacation rentals.

Coachella 2014.jpg
Thousands attend the Coachella Valley Music and Arts Festival in 2014. The music festival in southern California near La Quinta floods hotels and vacation rentals with visitors. City officials in La Quinta have turned to companies like Deckard Technologies for regulating the short-term rentals market.
Skip Descant/Government Technology
With vacation rentals playing an increasing role in the local business environment, cities are turning to technology to get a close-in view of the short-term rental landscape.

Officials in La Quinta, Calif., turned to Deckard Technologies to get a clear understanding of which homes in the Southern California city are on the short-term rental (STR) market.

The technology, which mines real estate data and then applies machine learning, allows the city to “see those violators out there, and to capture what they’re posting, and share with them,” said Gil Villalpando, assistant to the city manager in La Quinta. “So that when they say that they’re not, we can get a screen-shot and say, ‘This is what it is. Lets just work together to resolve this situation.’”

La Quinta is located in the Coachella Valley, near Palm Springs. The region has a long reputation as a vacation getaway, as well as serving a thriving second-home market. In the last decade, second homeowners have often turned to platforms like VRBO or Airbnb to list, market and book the home to travelers. Cities facing similar situations have since stepped up their game when it comes to regulating and controlling the industry, as locals have grown weary of noisy or disruptive weekend neighbors. Cities have also looked to recoup lost hotel bed tax revenue, which unregistered STRs tend to not file.

“We want to make this fair for those that are doing this right, by getting the permits and going through the process,” said Villalpando.

The Deckard solution shows cities the locations of rentals, with a host of data attached to each property. This can include calendar information, booking activity, ownership information and more. The dashboard also displays how rental activity is changing month to month, showing seasonality.

The company came into the short-term rental space because much of public policy drafted several years ago to regulate the industry often landed into the area of either overkill — with full-scale bans on vacation rentals in many communities — or amounted to turning a blind eye, opening the door to “a free for all,” said Nick Del Pego, CEO of Deckard Technologies.

The company began mining rich troves of real estate data from sources that might include long-term rental sites like Zillow, as well as short-term rental sites like Airbnb.

“We process billions of records every single day,” said Del Pego.

It’s the kind of big-data work most cities are not equipped to perform. But they need this level of understanding to make informed policy decisions.

“Making decisions without good information leads to really bad decisions with unintended consequences,” said Del Pego.

The data allowed La Quinta to break up the city in different areas, and then manage the industry at a more aggregate level.

“They [Deckard] made areas for us that we could just click on, and it showed how many [homes] were permitted, and how many were not, in that area. It brought it to light, which was really eye-opening, and really jaw-dropping for us,” said Villalpando.

Other cities, like Denver, have also turned to technology to aid in enforcing vacation rental compliance. Denver uses software from Accela to make it easier for homeowners to file hotel bed taxes they are required to collect from customers.
Skip Descant writes about smart cities, the Internet of Things, transportation and other areas. He spent more than 12 years reporting for daily newspapers in Mississippi, Arkansas, Louisiana and California. He lives in downtown Sacramento.
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