Why Local Governments Need Modern Software for Short-Term Rentals

The rise of short-term rentals is just beginning in North America, and local governments need to be ready to keep up. Local regulations and restrictions are becoming commonplace in municipalities of all sizes across the U.S. and Canada, setting guidelines to manage the impact of these listings on platforms like Airbnb and Vrbo.

Local departments are now tasked with compliance, inspections, and registrations for these rented apartments, condos, houses, and vacation properties. One way to successfully keep up with these inspections, registrations, and compliance needs is by adopting comprehensive software for short-term rentals.

Online short-term rental software like Cloudpermit enables government professionals to manage and track the community’s entire short-term rentals program, including payments, registrations, and more — all in one platform. Property owners can apply for registration online, and staff members can easily review and approve applications and complete registrations.

To understand just how pressing it is to prepare your community for the impacts of short-term rentals and the ensuing need for regulating and inspecting these units, let’s explore the growth of these rentals across North America and what the latest projections show for the future.

How Many Short-Term Rentals Are There?

North America is the clear leader in short-term rentals, capturing 37% of the global market share in 2023. So, just how many of these rentals exist today?

In America, there were nearly 2.5 million short-term rental listings in 2023 operated by more than 785,000 individual hosts. In total, 207 million lodging nights were spent in those listings. By 2033, the U.S. market is projected to grow 11% annually to $81.63 billion.

Canada has seen a growing presence of these listings in recent years, with short-term rentals increasing from approximately 215,000 units in 2017 to 355,000 by 2023.

The global short-term rental market is anticipated to grow to $341.9 billion USD by 2033, up from $131.4 billion in 2024. It’s clear that the need to regulate this market will only increase in communities around the world.

While large cities may seem to be seeing the most growth, the market share is highest in resorts and rural areas. Even smaller towns and mid-sized cities are feeling the growing pains of the short-term rental market.

As the number of listings grows, so does the need for local governments to adopt modern processes to regulate and manage the impact of these properties and ensure compliance in a fast-changing market sector.

What Are Communities Doing About This?

Increasingly, towns and cities are passing their own guidelines to govern short-term rentals. States and provinces have also started taking action, passing laws that dictate what these rentals must do and how they can be registered and renewed.

In 2023, New York City implemented new rules on short-term rentals, requiring hosts to register with the local government to crack down on illegal listings. To get approved, hosts must prove they live in their rental place and verify that the property meets safety codes.

Just in 2024 alone, American cities like Bozeman, Montana; Lexington, Kentucky; and Indianapolis, Indiana, passed new regulations, while other places like Newark, New Jersey, and Portland, Oregon, worked to better enforce laws already on the books.

Late last year, federal leaders in Canada announced the launch of the Short-Term Rental Enforcement Fund, which offered $50 million to help municipalities ensure compliance with local regulations. The effort also seeks to prevent too many properties from being removed from the long-term housing market.

Municipalities were asked to apply by January 24 to get money toward hiring enforcement staff, completing inspections, and managing complaints.

At the local level, expect many more communities to weigh in on short-term rentals with regulations and new rules in the coming years.

How Can Short-Term Rental Software Help Communities?

The need to monitor and manage short-term rentals is becoming clear in communities of all sizes. To meet this challenge, local governments can rely on modern technology and comprehensive software that can make it possible to keep up with these rapid changes.

Cloudpermit’s online short-term rental software makes setting up your community’s program quick and easy, including online registration and renewal, online payments, and mobile inspections and compliance.

Hosts can register with our user-friendly software while government professionals can review applications, track payments, and approve registrations as needed.

The right software for short-term rentals streamlines the process by automating renewal notifications, enabling on-site inspections that can be completed with a mobile device, and simplifying compliance and inspection work.