Data and Tech Are Long-Term Solution for Short-Term Rentals

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A San Diego-based company is changing the way many cities and counties across the U.S. collect tax revenue from short-term home rentals.

For tourism-heavy regions, Deckard Technologies has a product that’s catching on: Rentalscape, a solution that melds big data, compute, cloud services and machine learning to keep track of every ad in every market where homes can be rented through services such as Airbnb and VRBO.

Placer County contracted with Deckard in 2020 after putting out to bid a project that could automate the tracking and collection of the transient occupancy tax (TOT) that’s charged for short-term rentals, hotel stays and the like. Doug Jastrow, manager of revenue services for Placer, said the solution solved this problem, recouping its $140,000 cost in a short time.

The county’s contract with its previous provider had expired, and Jastrow said Placer — which encompasses part of the red-hot Lake Tahoe short-term rental market — wanted a more advanced solution.

“The beautiful thing with Deckard on that — something that I still appreciate today, even though it’s been a couple of years — is in a very, very short period of time, they had a product up and running by the date we needed it, which was Dec. 1, 2020,” Jastrow told Techwire. “That allowed for customers to do exactly what we needed them to do, which was apply for a TOT certificate and remit the money they had collected. It was a very elegant portal that they were able to create for us. We’ve been with Deckard since then.”

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 as far as customer service experience — walking a customer through the online portal to fill out an application and make a payment,” Jastrow said. “Also, a big selling point when we signed on with them, which we’d never seen before, was their ability to forecast reservations … looking at when there’s movement and change. That was very impressive to us.”

Jastrow said full-time residents in general have viewed the capture of previously lost revenue as a positive thing.

“People know the money is coming back to the community,” he said. “TOT goes to infrastructure projects where the money was collected.”

Deckard’s Rentalscape includes a dashboard for county employees with all the data available.

“The training time was minimal,” he said. “It’s a very intuitive layout on how to use their reports.”

Another tourism-heavy jurisdiction, Big Bear in Southern California, has also found Deckard’s solution to be a win.

“Big Bear Lake is a tourist community,” said Larry Vaupel, the city’s tourism management director. “We have two ski resorts. In the city, we have 2,600 vacation rentals — we have about 25 percent full-time residents, 75 percent part-time,” some of whom rent out their homes through short-term rental platforms like Airbnb and VRBO.

“We have an ordinance that regulates that, so we needed software to help us monitor compliance with our ordinance,” Vaupel told 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 your property out. We ask that you to come in and get a TOT license number, essentially, and pay your TOT for those stays.’ We were actually one of the first cities in the country to regulate vacation rentals, because they’ve become so popular.”

So Vaupel began looking for a solution that could keep up with the burgeoning market — and recoup tax revenue that was previously going unreported and uncollected.

“Deckard came along and said, ‘We can make sure folks in your jurisdiction have a license, and how often are they renting, and what are they charging.’ They’re scraping Airbnb and VRBO for data, and then creating a dashboard for us to log in and see all of the activity that’s taking place in our jurisdiction on those platforms. It’s a great way to forecast revenue, for example, and also to forecast staffing.”

Vaupel said that when the city revised its rental ordinance, it did so based in part on Rentalscape’s abilities.

“When we built our new ordinance, we required things that we know can be tracked through Rentalscape … a license number on all ads.” The new ordinance also requires that VRBO, Airbnb and other rental companies submit the TOT revenue on behalf of the owners, who never have to collect the tax from the renters.

“The owners never see it,” he said. “It goes straight to us, and the owners are appreciative of that.”

Big Bear signed on with Deckard in June 2021.

“It’s fantastic,” Vaupel said. “It’s saved us a lot of work, and when we issue a citation, we’ve got 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, was it a three-night stay or a two-night stay, how much revenue they generated by month, all the reviews. We have all that information.”

Big Bear pays about $70,000 a year for Rentalscape. In the current fiscal year, the city has issued about $500,000 worth of citations to property owners for non-compliance.

“Our fine for operating without a permit is $5,000,” Vaupel said. “So yeah, it’s paid for itself — not just on licensing, but also cost savings for staff.”

Nick Del Pego

Nick Del Pego

Nick Del Pego, CEO of Deckard Technologies, says his company’s success had its roots when he and founder Greg Rose were working for Qualcomm.

“QualComm is one of the last bastions of real innovation in the world,” said Del Pego, who’s based in the San Diego area. “I had this crazy R&D experience with Qualcomm, doing awesome things. We were doing data science on everything — chip set fabrication, code development, IP generation … .

“Founder Greg Rose said, ‘If we took all this crazy data science from Qualcomm, I think we could really help government around real estate, because it’s really important to them … but they don’t really have a way of knowing what’s going on. They can’t keep up with the pace of tech.’

“With tech happening,” Del Pego told Techwire, “real estate has gone from the back of the magazine and newspaper to Zillow and Realtor.com and Airbnb and VRBO, and if you do business, you do business digitally — and it’s moving really fast. And he (Rose) had this premise that with our knowledge, we could data mine what’s going on commercially in this space, and we could leverage our skills to help.

“So we’ve gone from six people four years ago to 46 people, and we’re doing this across 60 jurisdictions spread throughout about 15 or 16 states in the U.S. We have two products and they both revolve around what I refer to as businesses operating in residential real estate markets — home flippers, renovations, short- and long-term rentals … .

“We consume these advertisements — we use machines to crawl this daily. Every single day, I’m going to check that ad: Is it still up? Have they taken a booking? Has the calendar changed? Once a week I’m going to look at that ad and ask, ‘Did they change the text?’

“Computers can touch these things every single day. Computers can find out the changes. Computers can do things like … figure out what the minimum stay is. To do all this with human staff would take armies. I capture this stuff every day. My compute costs are low. We’ve been at this game with big data for a long time, we do it all up in AWS, and we’re able to find all this nuanced detail.”

Del Pego said the best decisions are based on the best data.

“A lot of what this (software) is for is understanding what’s really happening, so that you can craft good policy that really fits the neighbors, business owners, all the players in between,” he said. “The business is flourishing if you regulate it well. The residents don’t have the complaints about the noise, the trash.

“I use the computers and machine learning and tech savvy to give all these insights,” he said. “It makes it really easy to digest the nuance of what’s happening in this ever-changing landscape.”

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