How 10 different cities are regulating Airbnb host activities

Joni Mitchell sang more than fifty years ago, “They paved paradise/And put up a parking lot/With a pink hotel, a boutique/And a swinging hot spot.” These words, penned with the sensibility of a poetess, captured the allure of urban life. Yet, today’s reality tells a different story about urban living. Large cities worldwide are becoming increasingly inhospitable. Numerous residents and urban policy researchers are grappling with appealing but unwelcoming urban environments. Take Milan, for example. Lucia Tozzi, an italian urban policy researcher describes in her book L’invenzione di Milano. Culto della comunicazione e politiche urbane how the city, post-Expo 2015, shifted focus from its resident population to a more transient “short-term” populace. However, the most stark example is perhaps Portugal’s capital, Lisbon. By 2018, must-visit tourist spots like Alfama’s quaint alleys, Belem Tower, and Plaza do Comércio attracted roughly 4.5 million visitors – dwarfing its 500,000 citizens. This influx was fueled by Airbnb’s meteoric rise, aided by the local accommodation policy that deregulated short-term rentals, making them more financially attractive than traditional leases.
 

Lisbon’s story mirrors that of other global cities like New York and London. The rise of Airbnb and similar platforms has not just escalated living costs but also inflated property prices disproportionately. As a result, many areas are now exclusive, out of reach for most, without any significant improvement in services or living standards. In 2007, when Brian Chesky, Joe Gebbia, and Nathan Blecharczyk founded Airbnb, few could have anticipated its trajectory. Born from a simple idea in San Francisco – renting out an inflatable mattress for $80 a night, christened “Air Bed and Breakfast” – the company’s growth was exponential. In under two decades, it has hosted 1.4 billion guests through 4 million hosts across 220 countries. Now, taking a cut from every booking, Airbnb’s valuation stands at $73 billion. Airbnb has undoubtedly revolutionized our conception of home, turning it from a dwelling to an investment opportunity. Yet, it’s also accelerated gentrification and the homogenization of historic centres filled with short-term rentals. Consequently, local governments had to step in. Regulation varies from country to country, often differing between regions or cities.

Recently, New York introduced Local Law 18, imposing stringent short-term rental restrictions. For instance, residents can’t rent out their homes during weekends when they’re away. This has birthed a parallel market with many turning to Facebook groups or Craigslist. Yet, this poses risks, with both guests and hosts exposed to potential fraud, bypassing Airbnb’s safeguards. Various cities have regulated rentals, with many looking to emulate New York’s example, including Barcelona. In Italy, a proposal is under discussion to lay down a national framework. One thing is clear: the debate on the role of rental platforms in shaping our cities’ futures remains open.

In the aftermath of introducing Local Law 18, New York has seen a dramatic plunge in Airbnb listings. In under a month, the offers plummeted from 22,500 to a mere 3,227. The law mandates Airbnb hosts to register with the city and adhere to three key conditions: the owner must live in the rental property, be present during the guest’s stay, and cannot host more than two guests at once. Advocates believe these measures aim to free up housing for New Yorkers, who often grapple with soaring rents and a general housing shortage. As a result, Airbnb saw the majority of its listings vanish, especially in the city’s most coveted neighbourhoods. Yet, many seek ways around these regulations; some Airbnb hosts claim exemptions, while others appear to flout them outright.

Barcelona stands out as one of Europe’s cities most committed to regulating short-term rental platforms, being the sole major urban centre on the continent prohibiting the rental of individual rooms. Since 2011, a stringent licensing system has obliged platforms to display licensing numbers on every ad. However, this hasn’t halted all irregularities. Inside Airbnb reported that as of late June, 30% of the 15,655 Airbnb listings in Barcelona might be illegal, showcasing counterfeit license numbers. Alarmingly, another 25% of hosts confessed to not meeting licensing requirements, a claim that Airbnb doesn’t verify. Hence, the city’s battle against unlawful rentals continues.

In Lisbon, mirroring wider trends across Portugal, no new Airbnb licenses are granted in response to skyrocketing rental costs, except in rural areas. Each license will now undergo scrutiny every five years, and a rent price regulation system has been established. To encourage converting Airbnb properties to traditional residences, tax reliefs are being offered to owners.

Berlin authorities have adopted a stringent approach to short-term rentals, countering challenges from a burgeoning housing crisis. In 2016, a ban was imposed on renting entire apartments short-term, permitting only individual rooms, with hopes of promoting long-term leasing. Despite the strict regulations, platforms like Airbnb and their rivals have refrained from disclosing host information, making enforcement challenging for authorities. Moreover, hosts need a special permit to lease an entire property, and secondary residences are capped at 90 rental days annually. These well-intentioned measures have often seen courts siding with platforms, questioning the rules’ effectiveness

In Amsterdam, hosts can lease their properties for up to 30 nights a year, but this requires obtaining a specific short-stay permit.

Following New York’s lead, Florence has unveiled unprecedented regulations in Italy, proposing a limit on Airbnb short rentals in the UNESCO-recognized historic centre. The motion by Mayor Dario Nardella aims to halt new registrations for short rentals on the city’s Tourist Tax Portal, without which operating as Airbnb becomes illegal. This restriction won’t apply retrospectively. Once ratified in a subsequent vote, it will take effect within two months. Even unrented registered properties must report monthly to the police department. The registration currently binds to the landlord, not the property; if sold, the new owner can’t lease it short-term.

In Paris, regulating short-term rentals, like those on Airbnb, is a focal point. Of approximately 60,000 Airbnb listings in the city, 86.8% are whole apartments, and out of those, 16,000 exceed the city-imposed 120-day annual rental cap. To ensure compliance, Paris bolstered its monitoring team, augmenting officers from 20 to 30. Since 2017, about 13,500 apartments have been inspected, resulting in fines exceeding 2 million euros. With the looming 2024 Olympics, regulatory pressure intensifies. Recent legislative proposals in France look to further tighten the noose around vacation rentals. While Airbnb’s Brian Chesky once hailed New York as a model, he now voices concerns over Paris’s direction. Anyone opting to lease on platforms like Airbnb must notify the city hall, and if they exceed the 120-day mark or for other properties, a “furnished accommodation” designation is obligatory.

Canada is taking a hard stance against not only Airbnb but all short-term rental platforms. Specific areas in Montreal, Quebec, have opted to entirely ban new short-term rentals, aiming to ensure housing availability for residents. Quebec itself has legislated a limit for any stay of up to 31 consecutive days. But it’s not just Quebec; Vancouver has introduced regulations allowing short-term rentals for up to only 30 consecutive nights, and the rented property must be the owner’s primary residence.

Edinburgh has enacted stringent rules for those wanting to rent a second home on platforms like Airbnb, necessitating specific planning permission. Further complicating the short-term rental landscape, a recent ten-year development plan announced in December 2022 indicates a potential tightening of rules. The document suggests the city council might have the authority to refuse any form of short-term rentals in the future.

In London, authorities have capped Airbnb hosts to rent out their property for up to 90 nights annually without the need for a change of use. Such limitations were established to ensure sustainability in the short-term rental sector and balance the demands of tourism with the housing needs of residents.