How San Luis Obispo County's Tax Collection & Planning Departments Increased STR Compliance by 13%

With over 2,000 unlicensed short-term vacation rentals (STRs) in its unincorporated areas, San Luis Obispo County was receiving an increasing number of complaints. Residents took issue with excess cars parked in their neighborhoods, noise, and trash. Licensed hosts viewed competing with unlicensed hosts as unfair — unlicensed hosts were not paying tax or other regulatory costs and could charge less.

It was impossible for the County’s two code enforcement employees to manually track online listings, locate properties, and identify the owners’ contact information. Online STR platforms, like Airbnb and VRBO, don’t provide property or owner data. From the listings staff could find, there were rarely pictures of the outside of the house and the specific location was not revealed in the description or on a map. Some unlicensed operators would even remove and then re-upload their listings as a way to escape the staff’s detection.

When it came to capturing transient occupancy tax (TOT), tracking the total number of nights rented and the cost was also largely left to hosts to report, with no way to verify accuracy.

The tax collection and planning departments at the County saw an opportunity to work together to decrease illegal STRs and increase the collection of TOT. Coming together, they chose Host Compliance to help achieve their goals.

Prior to using Host Compliance software, most information the County had was anecdotal. They had received reports and complaints, but lacked clarity on how many illegal rentals were operating and how many issues they were creating for residents.

Empowered with data that showed which units were unlicensed, San Luis Obispo County worked with Host Compliance to compose a letter and contact these owners.

The County also implemented Host Compliance’s 24-hour hotline service for residents. Host Compliance operators handle the calls and forward the transcripts and recordings to the appropriate department.

Within a few months of using Host Compliance, the County received 200 new business licenses for STRs, a 12.5% increase in compliance. That increase accounted for $72,000 of recovered TOT, which more than covers the cost of the Host Compliance solution.

With fewer complaints from the community and streamlined processes, staff are in a better position to enforce their existing ordinance when new unlicensed STRs appear. Prior to using Host Compliance, it would take staff over an hour to manually identify a listing to an address (if it was even possible). Now the system does it automatically, saving them thousands of hours of extra work.

Since using Host Compliance, staff witnessed a sharp reduction in online listings for unlicensed STRs — roughly 600 have been removed.