As the short-term rental market continues to expand all over the world, regulations surrounding them have taken shape as well. Following a scan of the regulatory approaches taken in communities around the world, the following eight elements have consistently been applied:
- Host Registration and Fees – Requires that any property offered for home-renting be registered with the local government. For the benefit of hosts and municipalities, platform companies should facilitate the registration process. Along with the collection of an annual fee to recover costs, registration enables the monitoring and reporting of rental activity.
- Platform Registration and Fees – Require registration of the rental platform companies along with a significant annual fee and an ongoing fee for each booking. Rental platform companies must be prohibited from listing any property that is not properly registered.
- Principle Residence Restriction – Limits home-renting to a principal residence only. This prohibits the operation of ghost hotels and/or large scale commercial enterprises operating under the veil of home sharing. A significant issue remains in that short-term rentals are permitted in areas without proper zoning but with some limitations.
- Cap on Usage – Limits the number of days that a home can be rented through a home-renting platform. This helps to moderate the decline in available housing stock and the nuisance factors associated with the conversion of ordinary residences into commercial operations. Caps typically run from 30 to 180 days per year. Some condominium boards put the cap at zero days and some regulations require explicit approval from homeowner’s associations before short-term rentals can be offered.
- Health and Safety Standards – Regulations that require certain standards for safety (e.g) smoke detectors, fire extinguishers, pest control). This provides some minimal level of protection for guests.
- Reporting – Special provisions at the platform level to conveniently collect and remit various taxes and/or levies on behalf of hosts. This creates a more level playing field with commercial operators and provides revenue to government to cover the costs of managing home sharing activity.
- Taxation/Levies – Special provisions at the platform level to conveniently collect and remit various taxes and/or levies on behalf of hosts. This creates a more level playing field with commercial operators and provides revenue to government to cover the costs of managing home sharing activity.
- Enforcement/Penalties – Mechanisms to ensure regulations are applied and enforced (e.g. confirm principal residence with a driver’s license). Effective enforcement can only be achieved with reliable and timely reporting of activity from the platform. Penalties help to ensure the system is operating as intended through voluntary compliance.
The full report can be viewed here: