EU: holiday rental regulation is in the public interest

24_Sep_2020Overtourism

In certain municipalities where rent pressure is particularly severe, the application of a prior authorization scheme for short-term lettings is justified by an overriding reason relating to the public interest, the Court of Justice of the European Union ruled.

Highlights:

  • Major cities in Europe are warning about the rapid conversion trend of apartments from residential use to short-term lettings, which is forcing residents from their neighborhoods;

  • The lack of rules in some platforms is exacerbating the housing shortage;

  • The European Court decision constitutes a step forward for the right to housing for all;

  • Fairbnb.coop’s self-regulation policy can make the tourism market more sustainable.

The European Court ruling concerns a case between two short-term tourist rental companies and the Paris authorities, but is binding on other national courts or tribunals before which a similar issue is raised.

In May 2017, Cali Apartments SCI and HX were fined €15,000 by Paris authorities for renting out two studio flats on US based platform without authorization. They were also told to restore the flats to residential use, citing a housing code that requires permission for any change of use in cities of over 200,000 residents and three areas of the French capital. The two tourism rental companies appealed against the ruling and the case was referred to the European Court in Luxembourg.

The legislation in question, the Court noted, is intended to establish a mechanism for combating the long-term rental housing shortage, the objective of which is to deal with the worsening conditions for access to housing and the exacerbation of tensions on the property markets, which constitutes an overriding reason relating to the public interest.

 

 

“This victory, awaited by many cities, marks a turning point for the supervision of seasonal rentals and constitutes a step forward for the right to housing for all”, Paris mayor Anne Hidalgo said on Twitter.

The decision of the European Court is, for us at Fairbnb.coop, a confirmation of the need to regulate the short-term tourist rental market to ensure a sufficient supply of affordable long-term rental housing, particularly in the cities and neighborhoods most affected by gentrification processes.

Fairbnb.coop directly puts this policy into practice in three ways:

  • by asking Hosts for proof of regular registration with local authorities;
  • by privileging Hosts that offer only one property on the touristic market in destinations under threat, according to the rule “1 Host, 1 House”;
  • by supporting local community projects managed and chosen by residents with 50% of the platform booking fee.
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