With empty vacation rentals, European cities see a chance to reclaim homes

LISBON – Long before the coronavirus hit Europe this spring, many the cities complained that a proliferation of short-term apartment rentals aimed at tourists via platforms like Airbnb was driving up housing costs for residents and destroying the character of historic neighborhoods.

Now that the pandemic has all but halted the constant flow of visitors, many European cities are seizing the opportunity to push short-term rentals into the long-term housing market.

In Lisbon, the Portuguese capital, the municipality itself becomes the owner by renting empty apartments and subletting them into subsidized housing. In Barcelona, ​​Spain, the housing department threatens to take possession of empty properties and do the same.

Other city governments are enacting or planning new laws to curb the explosive growth in rentals largely aimed at tourists. Amsterdam has prohibited vacation rentals in the heart of the old town; a Berlin official warned of a crackdown on short-term rental platforms “trying to evade regulation and law enforcement”; and Paris is planning a referendum on Airbnb-type ads.

For years, short-term rental properties have wrested homes from residents of several European cities. Lisbon has more than 22,000 Airbnb listings, according to Inside Airbnb, which tracks ads in cities around the world. Barcelona has 18,000 and Paris, one of the platform’s largest markets, has nearly 60,000.

When tourists are plentiful, renting a property on a short-term basis can be more lucrative for landlords than a long-term tenant, which city governments say has distorted housing markets in cities where the supply is already limited. They also accuse online platforms of circumventing laws put in place to protect local markets.

“We cannot tolerate that housing which could be rented to Parisians is now rented all year round to tourists,” said deputy mayor of Paris, Ian Brossat, in a telephone interview. Mr Brossat also said he hopes to reduce the number of days per year that a property can be rented through platforms like Airbnb – currently 120. He accused the company of even breaking that rule.

“Airbnb pretends to be following the law, but it isn’t,” said Mr. Brossat, who wrote a Airbnb review book and its impact on cities.

Airbnb denies any wrongdoing, in Paris or elsewhere. “They set the rules, and we follow the rules,” said Patrick Robinson, Airbnb director of public policy for Europe, Middle East and Africa. “When there is a vigorous discussion about the right regulations, we are part of that conversation, and ultimately it’s up to local politicians to decide. “

He said Airbnb provided registration details and other data to authorities at major tourist centers like Lisbon, Paris and Barcelona to help city officials enforce their rules. “We actually believe that better access to data is the solution here.” In September, the company launched City portal, which she says will allow governments to access data that can help identify ads that do not comply with local regulations, such as unregistered ads.

Perhaps the most ambitious initiative is Lisbon, which has started signing five-year leases for empty apartments for short-term rentals. These properties are then sublet at lower prices to people eligible for social housing. The city government has set aside 4 million euros, or about $ 4.7 million, for the first year of grants.

“We entered the pandemic with enormous pressure on our housing market, and we cannot afford to come out of the pandemic with the same set of problems,” said city mayor Fernando Medina. “This program is not a magic wand, but it can be part of the solution in terms of increasing the supply of affordable housing.

The program aims to attract 1,000 apartment owners this year and has attracted 200 to date. Mr Medina said he is confident the plan will hit its mark, as a rebound in tourism at any time seems increasingly unlikely as the pandemic continues.

The plan was welcomed by some neighborhood associations who had criticized local politicians as allowing the city to become a playground for tourists and wealthy investors, many of whom are drawn to Portugal by residence permits and concessions. taxes offered to foreigners after the financial crisis of 2007-2008. .

“The coronavirus has helped expose the negative aspects of Portugal’s recovery from the financial crisis, which was driven by real estate and tourism rather than a focus on the basic needs of the local population,” said Luís Mendes, an urban geographer member of a citizen platform called Living in Lisbon.

Importantly, Mr Mendes said, the lockdown restrictions used to contain the coronavirus have highlighted housing imbalances in Lisbon. “How can you quarantine if you don’t have a decent house?” ” he said. “We now have a town hall which has come up with an interesting project and which is at least aware that having a roof is a fundamental human right.

However, some landlords do not view the city government as a reliable tenant. Portugal, they say, has a history of legal uncertainty and sudden rule changes every time a new administration takes office.

“If you look at the record of politicians in Lisbon, it’s an absolutely hopeless record of incompetence and often corruption,” said Rita Alves Machado, who owns three short-term empty apartments around Lisbon. “The city owes money everywhere, and I just don’t think it will pay on time or play by its own rules.”

The regulation of short-term rentals has been a long-standing affair in Europe.

In September, the European Court of Justice backed cities that were trying to crack down on short-term rentals, after backing a French court ruling against two landlords illegally renting second homes on Airbnb. The court ruled in favor of Airbnb last year, saying it was a online platform rather than a real estate company, which would have forced it to comply with housing laws. The European Commission is taking further steps to regulate the platform and others through a new Digital Services Act, which aims to modernize the legal framework for these services throughout the European Union.

The more travel hampers the pandemic, the more likely initiatives like Lisbon’s are to gain traction, according to city officials and local property experts. In the meantime, Airbnb has found itself on changing ground.

In Lisbon, occupancy rates at Airbnb and Vrbo, a short-term rental booking site formerly known as HomeAway, fell 50% in May from the previous year, according to AirDNA, which collects data on vacation rentals.

Miguel Tilli, co-founder of HomeLovers, a Portuguese real estate agency, said he has listed up to 60 new properties per month in Lisbon – almost all of which have already been rented through Airbnb but are now open long-term . tenants.

Rental prices in the city have fallen 10% since the start of the pandemic, but landlords who had previously rented properties through Airbnb were still reluctant to cut rents.

“Many owners act like Covid is someone else’s problem,” Mr. Tilli said. “It can’t go on forever. “

Raphael Minder brought back from Lisbon, and Geneva Abdul from Paris.

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