Can Europe find a way to live happily ever after with Airbnb?
- EU Regulation
- December 30, 2022
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The Catalan city of Barcelona, home to 1.6 million people and famous worldwide for its unique architecture, attracts about 30 million tourists a year.
But the flocks of visitors have also pushed up rent and real estate prices, and chased locals out of the city centre, causing disgruntled citizens to stage protests.
The finger of blame is often pointed at Airbnb and similar sites. They dispute such accusations, and some cities have a harmonious relationship with the online rental marketplace.
Yet in Barcelona, city officials say that registration rules on the platforms are too lax and allow people to advertise flats for short periods without the required permit.
Because anyone can sign up on Airbnb, illegal listings on the platform are proportionally higher than on rival websites, officials told The National.
In a signal of its tough stance on the matter, Barcelona became the first European city last year to ban short-term private room rentals.
At a cost of about €1 million ($1.06 million) a year, Barcelona city now has a dedicated team of about 35 people who check listings.
Every few months, the team sends a list of illegal listings to Airbnb’s Dublin headquarters, which takes them down.
This system has cut the number illegal new listings from about 6,000 a month in 2016 to 500 today, the city says. Over the years, thousands of listings have been removed in this way.
Double checking information submitted by hosts is the city’s job, and the problem is that it is often false or misleading, said Eva Mur, director of Barcelona City Hall’s inspection services.
“Some people put the wrong ID or make up a licence number,” Ms Mur said.
Cities need more help to tighten controls, she said, which is where the EU steps in.
Barcelona and many other European tourist hot spots are closely watching a long-awaited EU proposal to increase transparency and data sharing from short-term holiday platforms such as Airbnb.
In early November, the EU’s executive arm unveiled a proposal to increase data sharing between public authorities and short-term rentals (STRs), which is the Brussels jargon for holiday platforms that include the likes of Airbnb, Booking.com and Expedia.
The proposal calls on countries to give hosts a unique registration number that they must display online on a single digital entry point.
If a host fails to submit the requested documentation, which includes a description of the accommodation and its maximum number of guests, local authorities may suspend their registration number.
Travel platforms would also have to share monthly data on the same portal. They will be able to perform random checks on the validity of hosts’ ID numbers.
The proposal has caused a stir in Brussels after years of attention-grabbing headlines about Airbnb’s legal battles with major European cities, such as Paris, over illegal listings.
“This file is getting a lot of attention”, but the changes that Brussels wants to implement are “quite simple”, Member of the European Parliament Kim van Sparrentak told The National.
Until now, European legislation considered travel platforms as websites with no obligation to share information, said Ms van Sparrentak, a Dutch politician.
But they are more than websites, they are service providers, she said. And service providers must comply with rules on data sharing.
Ms van Sparrentak said popular European tourist destinations such as Barcelona and Amsterdam had been robbed of their power to enforce their own rules on short-term rentals, which most often include a cap on the number of days a year property owners can rent their homes.
“Cities had lost grip,” she said. “Airbnb can decide what happens in cities and they can’t do anything about it. And this regulation is flipping that.
“The European internal market is very much based on ‘the free market will solve everything’ and that ‘we don’t need rules’.
“And suddenly, we’re like, ‘we need rules’. And I think that’s what we’re working towards.”
But Ms van Sparrentak said she expected hurdles on the way to implementing the new legislation.
“It’s not going to be easy,” she said. “We know that Airbnb has a very bad reputation when it comes to lobbying and not abiding by the law, because it makes a lot of money with illegal listings.”
People are leaving the city centre for other neighbourhoods because the centre is only for tourists
Eva Mur, director of Barcelona City Hall’s inspection services
Ms van Sparrentak will represent the European Parliament’s Green group in negotiations in the parliament on the topic.
Parliament must also negotiate with the European Council and discussions are expected to continue for at least a year.
After its adoption and entry into force, the EU’s 27 countries will have a two-year period to establish the necessary systems for data exchanges.
Yet some cities say more is needed. This month, Barcelona described the EU Commission’s proposal as a “necessary starting point”.
But it also made several suggestions, such as asking platforms to conduct systematic inspections of host’s ID numbers, not random ones, and requested that cities receive logistical support ― possibly from the commission ― to provide better checks.
Ms Mur said illegal listings appear more often on Airbnb than on rival sites because its hosts are less likely to be professionals.
On Booking.com, about 50 listings of the 2,000 posted every month are illegal. That is about 2 per cent of the total compared with one quarter on Airbnb.
“Booking.com works more with professionals and hotels,” Ms Mur said. “With Airbnb, anyone can put an announcement up.”
Since 2018, Airbnb has shared data with Barcelona that includes the URL of the listing, the name of the owner of the flat and the licence number.
Since 2021, Airbnb requires all new listings in the Catalan capital to provide a verified address before posting a new listing.
It says this means that the city can be sure that the data Airbnb has is accurate, which helps with its inspection and law enforcement.
The city of Barcelona disagrees. It says it continues to receive data from new listings that do not contain detailed address information.
Likewise, Airbnb considers that if it has an active listing without a licence that does not have an open calendar, this does not imply a breach.
“That’s an aspect we don’t agree with,” Ms Mur said.
Barcelona stopped issuing new short-term rental licences in 2014 to try to curb their number, which is now at about 9,500.
But it is not illegal to continue advertising long-term rentals on the platform without a tourist licence, which is required only for hosts advertising flats for less than 31 days.
The city can fine hosts who illegally rent their flat up to €60,000 ($63,660).
In addition to causing inconvenience to neighbours, illegal holiday rentals have raised the prices of real estate in Barcelona.
“There’s a huge rise in prices,” Ms Mur said. “People are leaving the city centre for other neighbourhoods because the centre is only for tourists. It’s hard to rent long term there now.”
A 2020 study published by the Journal of Urban Economics found that Airbnb activity in Barcelona had increased rents in highly popular areas by 7 per cent, and real estate prices by 17 per cent.
With more than 11 million guest nights booked, Barcelona in 2019 was the second most popular European city among short-term renters behind Paris, the EU’s statistics office Eurostat said.
The agency in 2021 started releasing data shared by Airbnb, Booking.com, Expedia and Tripadvisor.
The European cities alliance, which includes more than 20 major European cities and Eurocities, a Brussels-based network, echoed Barcelona’s concerns.
“The fact that important short-term rental platforms have not fully co-operated with us by sharing the data we need to ensure compliance with our regulations has indeed been a burden over many years,” it said after the Commission’s proposal.
But Airbnb protested against accusations of lacking transparency, saying it wants to be part of the solution to challenges facing cities.
“We have partnered with governments across the EU on measures to help hosts share their homes, follow the rules and pay tax,” Airbnb’s Belgium office told The National.
“We want to work together to improve access to data, boost transparency and address disproportionate local rules that prevent families from sharing their homes, at a time when 40 per cent of hosts on Airbnb in the EU say their earnings help them cover the rising cost of living.”
In a position paper published on December 20, Airbnb also shared ideas regarding the Commission’s legal proposal.
It said that that it should go further in adressing what it described as “disproportionate STR rules” such as the ban on room rental in Barcelona.
Other proposals were on the opposite end of the spectrum to those suggested by Barcelona city officials to The National.
Airbnb said that while random checks can be of assistance to competent authorities in flagging possible instances of non-compliance, it is imperative that they are done in compliance with EU laws to prevent a “general monitoring obligation” from being enforced on the platform.
More generally, Airbnb called for harmonised rules across the EU, and suggested that the single data entry point be implemented at EU level, not at country level, with a clearer role for the Commission.
The paper argued that local rules are often “burdensome and complicated” for hosts, and gave the example of the city of Berlin, where hosts must follow a “burdensome offline registration and permit process, even if they host in their primary residence”.
🏡📰 Read Airbnb’s new position paper on the EU’s Short-Term Rental proposals to learn why @Airbnb is calling for:
📊 Streamlined data sharing
🇪🇺 A more active role for the European Commission
🛑 EC enforcement against disproportionate local ruleshttps://t.co/RC4eKLJ5Dd
— Airbnb Public Policy (@AirbnbPolicy) December 20, 2022
Airbnb said that the typical host earned just over €3,000 ($3,194) last year and that as of August 2022, European tax authorities had collected $573 million in tourist taxes thanks to Airbnb.
Airbnb first began collecting and remitting tourist taxes in the EU in the Netherlands in 2014.
The company does not publish estimates of illegal listings. On its website, it has listed legal and regulatory guidelines for hosts who, by accepting Airbnb’s terms of services, certify that they will follow local regulations.
Airbnb declined The National’s request to interview the platform’s co-founder, Nathan Blecharczyk, who published an op-ed on November 17 in news website Euractiv in response the Commission’s proposal.
His proposals echoed those made in Airbnb’s position paper published this month.
Mr Blecharczyk said that the company was “excited about the future” and wanted “to move forward and build on this opportunity in collaboration with governments, communities, and industries across the EU to develop rules that truly benefit everyone”.
Some observers believe that the Commission’s proposal is avoiding the underlying issue that pushed it to increase data sharing between cities and STRs in the first place — access to affordable housing.
Barbara Steenbergen, head of the International Union of Tenants’ liaison office with the EU, said the Commission’s proposal was “a good first step that serves to set up a data interface with the platforms to fight illegal short-term rental practices”.
“It might particularly help cities that do not already have a system in place to control Airbnb in their inner-city areas,” she said.
But Ms Steenbergen also said that the Commission’s proposal failed to address the “professional profit-oriented exploitation of the market”.
“When you walk through cities like Lisbon you have endless streets that are Airbnb,” she said. “These are all extracted apartments from the regular housing market.”
Luis Mendes, a researcher at the University of Lisbon who has worked extensively on the Portuguese capital’s housing crisis, said that better information helped European cities strongly affected by mass tourism and gentrification to make better decisions.
But so far, data is held on corporate digital platforms that “have generally not disclosed it in a systematic manner”, Mr Mendes told The National.
“The EU has consequently become a key battleground for the future regulation of both short-term rentals as a service, and of platforms as online intermediaries of such services,” he said.
Lisbon, which was the third most popular city for STRs in 2019, with 10.5 million guest nights booked, according to Eurostat, does not know how many illegal listings there are because it lacks the data.
The city’s communications department told The National that it would soon release a comprehensive report on the sector with input from Airbnb and other stakeholders, which will play an important role in the city’s regulations for local accommodation.
The city welcomed the new EU regulation on data sharing, which will allow “regulators to have an accurate picture of the market and make informed decisions”.
The housing crisis in the Portuguese capital, born out of the 2008 European debt crisis, has made headlines. Prices are soaring and ordinary city dwellers are being evicted from their homes.
STRs made the situation worse, Mr Mendes said.
Like Ms Steenbergen, he highlighted the need for EU regulation to form part of a broader debate on the housing crisis, which he said has been caused by factors including the financialisation of real estate and local measures affecting the supply of social housing.
“These dynamics … raise the highly political question of how housing should be governed and regulated when it has become an asset in a globalised world of transnational mobilities and capital fluxes, investments and financialisation,” Mr Mendes said.
Ms van Sparrentak said that the right to affordable housing should be handled separately from the Commission’s proposal on data sharing.
“Having transparency on short-term rentals is a very good first step, but there are a lot of housing providers and building buyers that still have to have more scrutiny,” she said.
“That’s a bigger step in working on the internal market and making it less free for all. And it’s also a bit more of a difficult discussion.”
Updated: December 30, 2022, 6:00 PM