Europe decides when Airbnb-type rents can be limited

A ruling by the European Court of Justice has established governments and municipalities can put caps on short-term rentals if there is a shortage of housing in the city

Barceloneta's protest against Airbnb short-term rentals (photo by PAU BARRENA / AFP via Getty Images) New short-term rental restrictions. A ruling by the European Court of Justice states that national legislation may or may not authorize short-term rents if the decision is aimed at tackling the shortage of long-term rental housing. The decision therefore goes in the direction of protecting the right to housing in large tourist cities against the practice of short-term rentals that spread among owners of second homes also thanks to platforms such as Airbnb.

The sentence concerns in particular the case of two French owners sentenced by the Court of Appeal of Paris to pay a fine of respectively 15 thousand and 25 thousand euros, in addition to the restoration of the residential use of two apartments that they had earmarked for short leases but without having received authorization from the city administration. The sentence states that the French building and housing code provides that for municipalities with more than 200,000 inhabitants, as well as in the inner suburbs of Paris, the change of use of second things for short-term rentals is subject to authorization from the Municipality.

So the Luxembourg judges agreed with the Paris court and therefore established that an authorization for short-term rentals by the administrations is fully compatible with European legislation. They also added that: "The fight against the shortage of long-term rental housing constitutes an overriding reason in the general interest that justifies this legislation". Satisfied the mayor of Paris, Anne Hidalgo, who has often criticized Aibnb and who considers the ruling as a "step forward for the right to housing for all".

The ruling, which does not directly concern Airbnb, certainly represents a blow to the platform, which in France alone currently has around 485,000 ads, 340,000 in Italy, 245,000 in Spain and 175,000 in the UK, according to the iPropertymanager website. However, the company has made it known that this decision "will help clarify the rules applicable to guests sharing their second homes in Paris".

And that short-term rentals and the need to regulate the Airbnb phenomenon is one a thorny issue in the large European cities is demonstrated by the open debate in various EU countries to find new forms of agreement with the platform and other property managers. Last January, some parliamentarians had presented an amendment, which was immediately withdrawn, which put some stakes on short leases, such as the fact that the municipalities could establish a limit of licenses to be granted to owners based on the duration of the rents, especially in historic centers of large cities, among the most affected by the shortage of housing for long-term rentals.