Local authorities in France get power to crack down on Airbnb rentals

Authorities in Paris and other French towns will be able to regulate local businesses who wish to rent property on Airbnb, according to a decree published by the French government. 

Local authorities in France get power to crack down on Airbnb rentals
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online booking homes application Airbnb on the screen of a tablet. (Photo by Martin BUREAU / AFP)

The news was welcomed by authorities in Paris, who have long battled to keep a check on Airbnb and its impact on the rental market. 

On Sunday, the French government published a decree that allows the City of Paris to subject the renting of local businesses to prior authorisation. 

This decree applies to all types of offices, stores or medical offices who may be turned in holiday rentals. 

It aims to allow towns to limit the growth of rentals on Airbnb, “protect the urban environment and preserve the balance between employment, housing, businesses and services on their territory,” says the decree. 

The news was welcomed by authorities in Paris, which has been witnessing “the multiplication of ground floor business premises being transformed into holiday rentals,” said deputy mayor Ian Brossat, who is in charge of housing, in a press release

This decree which comes into effect on July 1st, “will prevent local businesses from being turned into holiday rentals,” Brossat added on Twitter.

The conditions businesses will have to meet in order to get an authorisation still have to be defined said Brossat, according to Le Figaro. But Paris aims to draft these regulations and get them voted by the end of 2021, so they can come into force at the beginning of 2022. 

Other towns allowed to apply the decree are those who have put into effect “the procedure of a registration number for furnished holiday apartments, owners and, subject to contractual stipulations, tenants of local businesses who wish to rent them as furnished holiday apartments.” 

In recent years, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.

Now if owners want to rent a furnished property for less than a year to holidaymakers, they must apply to local authorities for permission to change the registered use of the space.

They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation. 

Until then, these onerous and time-consuming tasks did not apply to local businesses who only had to fill out a declaration.  

In February, France’s highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.

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Berlin rental prices rose by ‘almost a third’ in three months

Berlin is now the second most expensive city in Germany after Munich, as rents rose by almost 30 percent in just three months.

Berlin rental prices rose by 'almost a third' in three months

A recent survey by the housing portal Immowelt has shown that the momentum in the rental market in Germany is continuing to increase, and nowhere more so than in the capital.

Since November 2022, the average asking prices for new rental contracts increased by 27 percent: from €9.86 to €12.55 per square metre.

READ ALSO: Number of furnished rental apartments rising rapidly in Germany

Before this sharp increase, Berlin was in the middle of the price ranking for rents in German cities with more than 500,000 inhabitants. Then, in December, the average rental cost per square metre exceeded €10.

According to the latest available statistics from 2021, the most expensive Berlin district was Mitte, where rents cost on average €14 per square metre. This was followed by Friedrichschain-Kreuzberg (€13.52) and Charlottenburg-Wilmersdorf (€13.29)

The cheapest district was Spandau (€8.22).

Why are rental prices increasing so much in Berlin?

According to Immowelt, there are several reasons for the rental cost spike in Berlin. Firstly, the population has been growing for years due to immigration.

According to the real estate portal, almost 140,000 more people were living in the capital at the end of December last year than five years ago, and the demand for housing has also increased due to the war in Ukraine.

The high interest rates and rising building costs are also a factor. As a result, too few new living spaces are currently being built in the capital. There are also continuing catch-up effects of the failed rental-cap policy – when the German Federal Constitutional court overturned a price cap on rents in the city in 2021.

Since then, apartments that were rented at lower prices have since been offered at significantly higher rates for new leases. 

READ ALSO: EXPLAINED: What the decision to get rid of Berlin’s rental cap means for you

However, Immowelt pointed out that the rental price spike in Berlin is an outlier among all the cities surveyed and the jump in rents could also be a seasonal effect, the momentum of which may weaken again in the course of the year.