The Other Side of the Short-Term Rental Issue

The legal battle against short-term rentals has won in the European Court of Justice, which must make Madame La Maire Anne Hidalgo very happy, but pisses off a whole lot of property owners and tenants, not to mention Airbnb and other rental portals and agencies.

Twenty-two European cities, including Paris, met with the European Competition Commissioner, Margrethe Vestager, in Paris in their desire to “crack down” on short-term rental platforms, such as Airbnb. The housing shortage is the excuse, blaming short-term rentals for the problem. They also blame these platforms for driving up property prices. I believe they’re using short-term rentals as an excuse for their own inability to manage their housing crises, without actually knowing if that is true or not. I am not aware of any studies that actually seek the truth on this issue.

These city officials see this as a step forward to “housing for all,” but I personally think they have excluded a large number of people who need temporary housing, not to mention the property owners who need the income to support their investments as well as an industry that employs an awful lot of people. I can understand the interest in wanting to put local residents first in line for housing, but they are missing the fact that there are many kinds of residents, not just full time…at least not anymore! In today’s world of working remotely, creating a kind of transiency we’ve never before experienced, this is a step in the wrong direction. It does not include a large faction of people who need housing for less than one year.

“Airbnb” is associated with vacation rentals and nothing more, but that is a falsehood. Airbnb is just a platform that connects a tenant with a landlord and can be used to book any length of stay.

Part of the problem comes from the resentment of permanent residents who prefer not to have transients in their buildings. Co-operative buildings in New York had written these rules decades ago, making rentals of any kind restrictive in their own quest to maintain an exclusive kind of co-ownership, keeping the “riff-raff” out…a kind of legal discrimination. At least with a New York co-op, residents must agree to the by-laws prior to buying in the building and they control their environment for themselves.

In the case with European cities, now with this new decision, the buildings and residents no longer have control over themselves, as the city regulations have taken over. This is another fact to which I take issue, as I believe that the residents should have the right to choose for themselves. The cities may find that their residents will govern the problem for themselves even better than they can, if allowed to.

Owners who violate the regulations can find themselves paying very hefty fines…to the tune of 50,000€ if they don’t have authorization from the city to rent their property on a short-term basis. Can you imagine? I find it shocking that a simple property owner can be turned into a criminal for providing housing that doesn’t meet the criteria of “long-term!”

Keep in mind that no one can tell you who you let stay in your property. This is YOUR property, not the city’s, and I honestly don’t see how they can begin to tell a property owner who is allowed to rest their head on their pillow and who is not. Being paid for that stay is a way of being “reimbursed for expenses,” as property ownership is expensive. Would they prefer no one own property at all? Or that no one profit from that ownership?

In the socialist democracies of Europe, culturally that’s part of the problem. They basically don’t agree with earning any profits from one’s own home, and see that as “gauche” or “greedy.” It’s acceptable to open a retail store or a restaurant, or own commercial property that charges high rents to those kinds of establishments—all in the interest of profit—but an individual property owner is held at a higher moral standard and isn’t expected to profit from their personal investment.

Madame La Maire de Paris tweeted: “This victory, awaited by many cities, marks a turning point for the supervision of seasonal rentals and constitutes a step forward for the right to housing for all.” Ian Brossat, deputy Paris mayor in charge of housing and accommodation, was gleaming with pride. “We are not fighting a war against Airbnb or short-term tourism accommodation platforms. We are fighting a battle for Parisians’ housing. Because in the past few years, we have seen that the rise of Airbnb is to the detriment of Paris housing.” (May I remind you that Brossat is a registered Communist whose grandfather, Marcus Klingberg, was convicted of spying for the Soviet Union. I doubt he believes anyone should own anything and particularly not profit from it!)

They are both feeling victorious and we in the industry are feeling beaten to death. Paris is the most touristed city in the world, and not everyone wants to stay in a hotel. And aside from the tourists, there are thousands of people who come for stays of one month or a few and people who need temporary housing for a variety of reasons that these rulings completely ignore. What if you decide to separate from your spouse and need a temporary place to live? What if you’re renovating your apartment and can’t reside in it while the work is taking place? What if you simply want to spend a few months a year in Paris just for the pleasure of it? What if you do business here regularly and want to own a property for your stays, but see it as wasteful if left empty when you’re not occupying it? Doesn’t that contribute to being vacant, even adding to the housing shortage? Why not ensure that every property is filled as much of the year as possible? Wouldn’t that make a whole lot more sense and doesn’t that contribute to reducing the housing shortage?

The way it works is this: short-term rental property owners must register their property with the Mairie first, and receive an authorization number that proves they have the right to list it online. This number is then shown on the property listing and any properties without this authorization are considered illegal. This is the ruling that the European Court of Justice upheld.

It said: “The national rule requiring authorization for the repeated letting of premises intended for short-term accommodation to transient customers who do not take up residence there is in line with EU law. The fight against the shortage of long-term rental housing is an overriding reason in the general interest justifying such a regulation.”

Interior of Adrian’s Viager with a View

As a result of this legislation, our company has given up the dozens of short-term rental properties we once represented, including two of my own personal apartments. One of them was designed to be my retirement home—a property that took me five years to acquire and create, to which I imagined myself living when I could no longer walk up 70 steps to where I live now. That dream was lost to these regulations as I couldn’t afford to keep it and maintain it without the benefit of the rentals. The city accused me of the short-term rentals and as a result, I sold the apartment much to my dissapointment. (Photo: Interior of Adrian’s “Viager with a View)

I once wrote 10 chapters about the experience of purchasing a “Viager with a View” over the course of those years and how dear to my heart it was. I may never forgive Anne and Ian for taking this away from me, when it gave so much pleasure to so many and was destined for a greater future. You can read it here if it’s of interest.

A bientôt,