Supervision of short-term rentals
Short-term letting (STL) has grown rapidly as new digital platforms have brought together local accommodation providers with the global tourism market. This has caused numerous problems for cities, their housing markets, and local residents. Indeed, a recent review by the OECD stated that: “the exponential growth in accommodation platforms such as Airbnb in many cities has contributed to a disruption of the local real-estate market.
Description
Impacts include inflated real-estate prices, unfair competition for licensed accommodation providers, and gentrification of tourism hotspots and inner-city areas, sometimes to the point of pushing locals out of the area”.[1]
A recent review [2] of actions taken by eleven cities in different countries identified three categories of responses to the rise of STL:
- Permissive regimes which enable and encourage short-term letting can be found, for instance, in London and Phoenix;
- Notification and restrictive systems, such as those found in Paris, which regulate STL;
- Prohibitive regimes and those preventing the use of homes for short-term letting, for instance, in Amsterdam, Berlin, Barcelona and New York.
Across the United States, a variety of approaches have been applied in different cities. For example, New York City tries to detect illegal stays and prosecutes hosts for violating 30-day minimum tenancies. The city of San Francisco requires hosts of short-term holiday rental housing to register with the municipality, which in turn tries to limit short-term lets to short periods, provided the hosts themselves reside in the dwelling for at least 275 days per year. In Portland, Oregon, the local planning code is used to require dwellings to be occupied by the host and used for at least 270 days per year. It also limits the proportion of dwellings in apartment blocks which can be short-term let to 25 per cent.
Amsterdam has introduced a ban on “holiday rentals” – entire homes without the owner present, as opposed to rooms in homes with the owner present – in three neighbourhoods in the city centre and is looking to expand this to surrounding neighbourhoods. There is also a yearly cap of 30 nights in Amsterdam for holiday rentals and 90 nights in Berlin. Registration or a permit is also required in both cities.
However, in almost every city, it is local government rather than short-term letting platforms, that bear the burden of ensuring compliance. This has required significant resources and has proved both challenging and onerous for some tourist-attracting cities (see footnote 84). Particularly challenging is the lack of reliable data on STL activities as platforms do not provide this data to cities, citing privacy concerns. While platforms have suggested they are open to collaboration with cities, the extent of actual cooperation seems to be minimal in practice.[3]
While the effects of STL are mainly felt in cities, policy decisions and court cases at both national and EU level strongly affect the possibilities of regulation. In 2019, the Court of Justice of the European Union (CJEU) published an opinion that regarded short term housing rental platforms as digital service providers, thereby exempting them from regulations for real estate agencies.[4] However, a more recent decision backed cities by confirming that regulating STL can be seen as a measure to curb housing shortages.[5]
Researchers have recommended a number of strategies to manage STL better, these include:
- The inclusion of a registration system for STL listings, combined with independent data collection and analysis of active listings, to facilitate enforcement
- Additional localized strategies to limit STL and ensure adequate affordable rental supply in areas of intense STL use
- The integration of measures to limit commercial-style STL within a broad ranging, integrated housing policy, which reflects the changing nature of housing markets and the complex drivers behind these shifts
- The development of an ongoing research agenda into STL across cities and regional areas and its impact on housing and urban planning outcomes, supported by access to detailed, up-to-date data.
- Collaborating with other cities to inform and influence policymakers.
Scale
Local
[1] OECD, OECD Tourism Trends and Policies 2020. Available at https://www.oecd-ilibrary.org/sites/6b47b985-en/index.html?itemId=/content/publication/6b47b985-en.
[2] Laura Crommelin and others, “Technological disruption in private housing markets: the case of Airbnb”, AHURI Final Report 305. Available at http://www.ahuri.edu.au/research/final-reports/305.
[3] For example, see https://www.euronews.com/2019/06/21/rental-platforms-like-airbnb-do-not-cooperate-with-authorities-claims-letter-from-european.
[4] For example, see www.reuters.com/article/uk-eu-airbnb-idUKKCN1S61GZ.
[5] In relation to a French law under which municipal authorization is required for short-term rentals in cities of more than 200,000 residents showing that greater regulation is possible, see https://www.reuters.com/article/us-airbnb-france-idUSKCN26D0YX.
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