Denver’s missing the mark when it comes to enforcement of rules governing Airbnb-style rentals and is doing a poor job of analyzing data to assess their impact on neighborhoods.

That’s the gist of a new city audit, which sought to gauge how Denver is doing in enforcing its ordinance regulating short-term rentals – roughly one year after it went into effect.

The audit conducted by City Auditor Timothy O’Brien’s office found a discrepancy between how regulations are enforced and the law – which he said puts the city at risk for litigation.

“These discrepancies between the law and enforcement could lead to public confusion on how to stay in compliance, as well as the risk of perceived inequity,” O’Brien said in a statement.  “This could put Denver at risk of legal action.”

Furthermore, O’Brien’s office found inconsistent application of the lodger tax, leading to some being granted licenses that shouldn’t have. The city also hasn’t been using data effectively to assess the impact of short-term rentals on neighborhoods and affordable housing.   

Last year, the city passed new regulations for short-term rentals “to create a fair operating environment, ensure minimum safety requirements” and assess their impact. In the first eight months of the new rules, Denver’s Department of Excise and Licenses issued 2,000 licenses, translating to 68 percent of rentals listed online, according to O’Brien’s office.

The city’s Excise and Licenses Department disagreed with recommendations to shore up inconsistencies in enforcement of regulations, according to the auditor’s office.

The audit found issues with lodger tax license numbers. In some cases, multiple people were sharing the same number, multiple licenses were issued to one applicant or more than one address were attached to one license.

“For example, we identified 45 instances out of 1,642 applicants who received more than one short-term rental license, 20 of them had a license registered to more than one address,” O’Brien’s office said in a press statement.

The rules were designed to keep landlords from renting out multiple properties on a short-term basis, in effect reducing the affordable long-term housing stock.

“The agency disagreed with our recommendation to develop and implement a data collection approach because officials say they are focused on licensing, not affordable housing analysis,” the city auditor’s office said in a statement.

“If the Department of Excise and Licenses does not track and analyze the data, officials should work with City Council to determine who is responsible,” O’Brien said. “A central goal in the ordinance is to determine the impact on neighborhoods and affordable housing, and some agency needs to be working on it throughout the process.”