Judgment of the European Court of Justice: EU countries can reduce short-term rents through Airbnb – the economy

To combat housing shortages, EU countries can stop short-term rentals through platforms such as Airbnb if necessary. The European Court of Justice ruled on Tuesday on a regulation from France. (Case C-724/18)

There, apartment owners in large cities with more than 200,000 inhabitants and near Paris need a permit if they regularly rent furnished apartments in a short time. Two providers did so without the required license, and were therefore fined and obliged to convert the rooms back into long-term rental apartments. You are suing in France.

The French judges who dealt with the case asked their EU colleagues in Luxembourg for advice on whether the requirements of the EU Services Directive were in line. The ECJ confirmed this in its landmark judgment.

The fact that a permit for regular short-term rent is required is, in their view, justified by an ‘overriding reason in the general interest’, namely the fight against housing shortages. The permit requirement is also proportionate as it is limited to certain landlords and geographically. Apartments that serve as the main residence of the landlord are excluded.

Airbnb claims to be heavily affected in Paris

In its decision, Airbnb announced that most of its providers in Paris offered their own apartment for short-term rent, not a second house. The case will therefore hardly affect the platform in Paris. A company spokeswoman emphasized: “We welcome the decision to provide clarity to the hosts who share the second house in Paris.”

The company looks forward to working with local authorities on rules “that work for everyone and put local families and society first”.

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The Airbnb platform, founded in the USA in 2008, and similar offers are very popular with tourists as an alternative to hotels. For commercial providers, short-term rentals for several nights are usually much more lucrative than longer-term leases. However, there is strong criticism in metropolises around the world. Large German cities such as Berlin, Hamburg and Munich now impose heavy fines for misuse of living space.

The French regulation takes precedence over “conversion” with a permit requirement and leaves municipalities free to determine permit requirements. Municipalities may, among other things, require the conversion of additional rooms into living space as a condition for short-term lease. The ECJ also confirmed this in principle.

However, French judges need to examine in detail whether this really helps to combat the shortage of housing on the ground. It must also be taken into account whether the compensatory obligation is actually to be implemented. (DPA)

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