June 29, 2018

Legislation Is Not Hampering AirBnB Growth

The short-term rental market spans across the globe, operating in over 81,000 cities in 191 countries. This popularity has led to governments both local and regional attempting to enforce regulation on the industry, usually by legally restricting it. That said, stricter regulation has not hindered the market growth for overnight stays, according to the latest results from Colliers International and Hotel school The Hague and their ongoing research on Airbnb activities in Europe, reports Serviced Apartment News. Looking at five popular European cities that enacted restrictions on vacation rentals, they found that restrictions did not seem to hamper growth; in fact, the short-term market increased by as much as 3.4% in some areas.

Some of these cities have extremely strict legislation, but prospective short-term tenants still show significant interest in vacation rentals. While it is unclear if and how the cities will enforce their laws, it did not hinder bookings or growth in any markets.

How Does Legislation Affect Operators?

There are three primary reasons why city and state or provincial governments have moved to regulate short-term rentals. The first is that locals want to prevent tourists from transforming residential neighborhoods into hotel-like districts. The second is that there is a lack of zoning oversight, which causes uncertainty in development. The third is a concern that relationships between landlords and long-term tenants may deteriorate in favor of the higher profits that come with short-term rental units.

Here are some of the requirements for short-term rental hosts operating in major cities:

·      Paris requires all vacation rental hosts to register with the city and own a commercial business license. They are only allowed to rent for 120 days per year and are required to pay tax. Owners who are found in violation of this law may be fined up between 5,000 and 10,000 euros.

·      Amsterdam’s temporary stay policy requires owners to register with the city. They also recently passed a law stating that owners are only allowed to rent for 30 days per year starting in 2019, cut in half from its current limit of 60 days per year. Violators may be fined up to 20,500 euros.

·      London introduced a law in 2015 allows hosts to rent homes, apartments, or guest rooms for up to 90 days each year. Owners may be allowed to rent for more than 90 days if they have permission from their borough. Violators may be fined up to £20,000.

·      Berlin recently overturned its short-term rental ban, allowing owners to rent out their primary residence as often as they want and to rent out second homes for up to 90 days a year. They must go through a rigorous permit process, and violators will be fined up to 500,000 euros.

·      New York restricts property owners from renting out units for fewer than 30 days unless they are also present. Hosts also face fines of $1000, $5000, and $7500 if they violate these restrictions.

·      Chicago allows for hosted and non-hosted short-term rentals in specific zoning areas. Hosts are also required to register with the city, but they may or may not be required to obtain a license. Violators may face fines of $1500 and $3000.

·      San Francisco allows residents to rent out their primary home for stays that are shorter than 30 days long if they register for a permit. If the resident will not be present during the stay, they are only allowed to rent their unit for 90 days per year. Violations are subject to a fine of $484 per day per unit.

·      Seattle will require short-term rental operators to have a regulatory license beginning in 2019. Owners may rent up to two units out as short-term rentals, provided that one is the owner’s primary residence. Violators may be fined up to $1,000.

Despite these stringent restrictions, some of the European markets have seen growth in the industry. While there is a lack of research being conducted in the United States, there is no reason why American cities wouldn’t also be seeing some growth.

Airbnb has been at the forefront of each city’s legislation to prevent the local laws from banning them entirely. They have also added new rules and regulatory restrictions to help hosts find a balance and understanding of the laws as they change.

These laws are frequently confusing and constantly changing, so Voyajoy works with all of our marketing clients during the onboarding process to avoid non-compliance issues. Contact us today for a consultation.

Chang Kim

My name is Chang and I manage operations at Voyajoy. I've been in the short-term rental space for the last four years and have an operations career dating back 20+ years. I've learned about vacation rental management the hard way and have seen how quickly this industry has changed in a very short time. My objective is to use this experience and knowledge to give our valued clients big competitive advantages.

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