After a weekend long party, noise complaints from neighbors and $30,000 later – a company was born. One entrepreneur is changing the growing industry of short-term rentals.
“I can’t say I woke with the idea, what I did wake up with was a problem that led to the idea,” said David Krauss, CEO and co-founder of NoiseAware. He is also an Airbnb host in Dallas with eight rental properties himself
“About two years ago somebody rented my place and ended up throwing a massive party,” Krauss said. “We called it mini Coachella because that’s frankly what my neighbors experienced next door. I didn’t find out about their party until two days after they left and it was in the form of a letter from my building’s lawyers and it included a police report and it ended up costing me $30,000 to unwind this pretty horrific nightmare.”
That’s when Krauss teamed up with his friend, who is an electrical engineer, to create a tool to avoid noise problems. The two friends invented a device for short-term rental hosts and managers to help monitor and respond to noise nuisance issues quickly.
“We call ourselves the smoke detector for noise,” Krauss said.
A noise threshold is set on the device using sound decibels, according to Krauss. Once the guests exceed that noise threshold, a notification is sent to them before the neighbors get involved.
“They aren’t trying to cause a problem they just need a reminder at the right time,” Krauss said. “Noise nuisance issues in short-term rentals are by and large accidental.”
Krauss said most of the time guests are just unfamiliar with the local regulations, building rules and neighbor sensitivity. He said noise, trash and parking are the most common neighbor complaints. Noise is the most visceral and the one that leads to the most issues, especially in city hall.
“We think it’s critically important that cities evolve with this industry and build rules and regulations that are going to allow fair and responsible behavior, both on the guests and the host side with clear expectations with a path to become compliant,” Krauss said. “Enforceability is the third piece that a city is going to need to consider when crafting legislation.”
Right now Salt Lake City has a ban on rentals of less than one month, according to Krauss. That puts the Utah capital in the 10 most renter un-friendly cities in the U.S. He said short-term rentals are a new industry and compared it to the first automobile.
“When the Ford Model-T rolled off the production lines and hit the streets, the rules of the road were built for horses and buggies,” Krauss said. “Right now we have short term-rentals coming into communities and the rules of the road are not built for them, but they are legal activities. Cities that do create a structure framework and legislation that is smart, fair, clear and compliance oriented and lastly enforceable - will succeed and they will grab the economic benefits of those travelers coming and those dollars staying in their community.”
Kraus said short-term rentals are a phenomenon that are just being discovered.
“Being able to rent your largest asset when you’re not there, maybe you’re traveling, or maybe it’s you’re second home and you’re going to pay the mortgage with the proceeds the economic value does not stop at that transaction,” Krauss said. “Data supports that people who stay in short-term rentals spend more than those who stay in hotels. When you’re putting travel dollars in the resident or home owner’s pockets, the circulation of that money stays in a community.”
Krauss said he recommends the local coffee shop to guests so they can get an authentic local experience. Those coffee shop owners are now his friends. He said the local aspect of economics in short-term rentals are really profound and hopes that it becomes more celebrated and more cities will work with the industry.
Krauss told a story of client in the Coachella valley. She had business that went bankrupt during the recession. Slowly she built a portfolio of properties that she managed and took care of. Now she’s built her life back, but now the city looks at vacation rentals as something that needs to be banned. It was the people who were taking advantage of the city’s unenforceable legislation there were on track to bottom out her life again. Krauss said it means a lot to know that his tool plays a small part in being able to help people remain in business and stay compliant and avoid problems.
“Beyond NoiseAware, we’re frankly trying to represent what we think is the viable sustainable long term future of this growing industry,” Krauss said. “When I had my first noise complaint that was the impedes for starting NoiseAware, my neighbors lived with the party house next door - it was my party house. I was the unwitting host to a major, major nuisance and I paid a dear price and my neighbors lost a weekend of sleep - and frankly I feel awful about that. Today, two years later our data shows that if a guest is notified at the proper moment, within fifteen minutes eighty percent of these issues are mitigated.”