News analysis: The crackdown on short-term lets

Over the past decade, short-term letting site Airbnb has attracted millions of travellers in cities across the world. But what has become a handy source of income for many homeowners is causing huge problems for traditional accommodation providers. Emma Lake reports

 

Airbnb has grown exponentially since the idea for an online short-term let

 

The rapid growth of short-term letting prompted by the platform, as well as others who have joined the party, including HomeAway and TripAdvisor,
has outstripped the pace of regulation change.

 

Now many authorities are looking at ways to combat the effects of the increase, which has been accused of breaking down communities and creating a uneven playing field for more traditional accommodation providers.

 

Several cities, including London, have introduced caps on the number of nights a property can be let for in a calendar year before change of use planning permission is required.

 

However, these limits have proved almost impossible to enforce. Airbnb is the only platform to have agreed to introduce an automatic 90-night limit to coincide with the legislation introduced in London in 2015, but a quick Google search reveals countless forums explaining how to evade the cap.

 

It's a problem seen elsewhere, and earlier this year the mayor of Paris, Anne
Hidalgo, announced that the city would launch legal action against
Airbnb for what it has dubbed "illegal adverts" for properties breaching its
120-night cap.

 

Unlike London, Paris has a city registration system for short-term lets and requires hosts to display a registration number in all advertising. French officials are targeting platforms under legislation introduced in 2018, which states that companies that post listings breaching the cap are punishable by a fine of up to €12,500 (£10,763) per advert. Mayor Hidalgo told Le Journal du Dimanche that
action had been launched for more than 1,000 postings in a move that could cost Airbnb €12.5m (£11m).

 

There is evidence that Paris' approach is having an impact. The growth of listings has been slower in the French capital than it has in London, with a 99%
increase since 2015 to reach 58,184, compared to a 329% increase in London
to reach 79,129.

 

Concerns about the rate of increase in London have seen an All-Party Parliamentary Group (APPG) established to examine short-term lets and
the proposal of a registration system made by City Hall.

 

The group is being chaired by Karen Buck, Labour MP for Westminster North, who told The Caterer: "We've set up the APPG in response to what is clearly a massively enlarging short-let sector and a massively professionalising short-led sector. Nobody is objecting to the sharing economy as long as they follow the rules around responsible behaviour; it's good for tourism and it brings income
to home-owners.

 

 

But the scale of it is now turning residential communities into quasihotels
in some places and putting costs and extra pressure on local authorities.
"The mayor of London has proposed, and I agree, that the best thing to do is to require people letting their homes to simply inform the local authority of their intention to do so - that gives the local authority the means to know who is letting, so it is much easier for them to track and know when people
break the 90-day law.

 

"You do not want heavy regulation, but you need to make it possible for councils to uphold the law. What we want to do is find a way of managing the two conflicting demands of allowing people to make use of their homes and make a it of extra money, while preventing the downsides."

 

Buck said that in the first instance what is being sought is a "relatively light way of doing it that keeps the best of all worlds", but added that if it were to prove
ineffective, then the more radical action seen in other cities could not be ruled out.

 

Details of what a registration system could look like have yet to be released but the mayor of London, Sadiq Khan, has also said a "light touch" is required,
adding that in the last year alone approximately 2.2 million Airbnb guests stayed at 75,700 listings across the capital.

 

A system of regulation is also being considered in Scotland, with First Minister Nicola Sturgeon launching a public consultation into ways to "control the number of lets and ensure they make a contribution to the services they use".

 

The industry does appear to be taking note of concerns, and both HomeAway and
TripAdvisor have committed to joining Airbnb in introducing caps in line with legislation in the future.

 

Other cities have taken less of a "light touch" approach, with Palma, the capital of the Spanish island of Mallorca, voting to ban almost all short-term lets of private homes, citing their impact on rental prices.

 

Exemptions include detached homes that are not on protected land or within a specified area around the city's airport.

 

Announcing the change, which was implemented in July 2018, mayor Antoni Noguera said: "Palma should be a habitable city and the worse that can happen is the inhabitants have to leave."

 

It's too early to draw conclusive findings from Palma's approach, but a comparison of the number of properties currently registered with Airbnb and the number registered in 2016 shows a reduction of 33.8%. In comparison, the island of Mallorca as a whole saw an increase of 40.8%, reaching 15,874 listings.
It's clear that officials are keen to catch up with the Airbnb phenomenon and, for
its part, the company has welcomed clear legislation applied across providers.

 

Hadi Moussa, Airbnb country manager for UK and northern Europe, said: "Airbnb is built on the principle of making communities stronger and we are proud to lead our industry on working with policymakers to secure smart rules
that work for everyone. A clear and simple registration system that applies to hosts on all platforms is good news for hosts and will help authorities get the
information they need to regulate our industry effectively.

 

"We want to continue working together with leaders in the UK and across the world to ensure that the sustainable growth of home sharing is good news for everyone."

 

Airbnb policies across Europe

 

Amsterdam Short-term lets for whole homes limited to 30 nights a year
Barcelona Hosts must be licensed
Berlin Permit required to let 50% or more of a property
London Short-term lets for whole homes limited to 90 nights a year
Palma Ban on short-term flat rentals
Paris Short-term lets capped at 120 nights a year