How technology is helping municipalities crack down on illegal short-term rentals

During what Orest Katolyk calls the "wild west" of short-term rentals — the time before regulations were put in place — bylaw officers in London, Ont., would have to rent properties listed on websites like Airbnb to check for infractions.

"We actually rented a shed several years ago that was near Western University, and it was being rented out as a kind of overnight stay for $35 a night," said Katolyk, director of municipal compliance for the City of London.

The city had been fielding complaints from neighbours throughout the school year. Renting the property was a necessary step that allowed them to prosecute the case.

In recent years, municipal governments across Canada have strengthened regulations to limit short-term rentals. Enforcing those rules, however, can be tricky because most listings don't include an address.

But the jobs of investigators like Katolyk are getting a lot easier thanks to new tech platforms that use artificial intelligence to help uncover illegal listings.

There are some 235,000 short-term rental listings — almost five per cent of the country's long-term rental stock — according to a recent Desjardins report, underscoring concerns they are contributing to the housing affordability crisis and availability of longer-term units.

The technology scrapes publicly available data, such as from the rental listings on websites like Airbnb and VRBO, then matches the listings with addresses.

According to Granicus, the company behind the Host Compliance system, their platform uses artificial intelligence and machine learning to identify addresses, and determine estimated occupancy and rental revenue.

That information is then provided to municipal regulators, who can issue compliance notices to property owners if the addresses are found to be unlicensed.

"What we are trying to track for governments is compliance," Graeme Dempster, sales director for Granicus, told CBC Radio's Cost of Living. 

"So of the number of short-term rentals that are out there in your jurisdiction, how many of them are operating legally versus where are those operators that are operating outside of your regulations?"

Airbnb told CBC in an email that all its hosts agree to follow local laws when listing a property on their service, and adds that it provides governments access to City Portal, a tool developed by the company that curates data about the platform's listings in their area.

Airbnb also says that short-term rentals have no meaningful impact on housing prices. 

A representative for Expedia Group, parent company of the short-term rental platform VRBO, told CBC in an email statement it "collaborates closely with government stakeholders across Canada in support of balanced and enforceable regulations," adding that a "diverse" tourism sector has economic benefits for local communities.