"Excessive" tourism vs housing affordability: residents of the most popular cities are calling for restrictions on short-term rentals - FT
Kyiv • UNN
Tourism in Europe is leading to a housing shortage, displacing locals. In Italy, Portugal, and Spain, city residents are protesting to ban Airbnb-like rental platforms.
The zealous surge in the tourism industry in "attractive for recreation" European countries entails a shortage of housing for locals. Residents of a number of European countries are protesting, demanding that a "correct balance" be found and insist on limiting short-term rentals. It seems that the example of New York contradicts the claim of the protesters.
This is reported by Financial Times and transmitted by UNN.
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In a number of European countries, local residents are trying to curb excessive tourism and influence housing prices and availability, in particular to regulate the rules regarding short-term rentals.
In Italy in 2022, the Alta Tensione Abitativa ("High Voltage Housing") association was created, which calls for limiting short-term rentals, especially in cities where administrations face a housing crisis.
In 2022, the Italian parliament approved a special law allowing Venice to introduce a limit on short-term rentals. FT writes that this is the only city in Italy where relevant regulation is allowed.
The powers of other municipalities to control private property are currently limited.
However, there are certain complaints even about Venice. "The rules developed by the city of Venice are very light and ineffective. The number of beds available for tourists is greater than the number of beds available for people to live in," explains Nicola Pellicani, a former Venetian deputy from the center-left Democratic Party.
There is strong pressure from property owners not to approve the plan or even cancel the special law itself
In Portugal, property prices have been on the rise for the past two decades. This rapid rise in house prices in 2011 and subsequent years was facilitated by the bailout received after the financial crisis. The same period was accompanied by an influx of wealthy residents. Real estate prices in some cities of the country are among the highest in the Eurozone. At the same time, local residents complain that they have been forced out of the market. This is confirmed by the example of Lisbon resident Antonio Gori.
We demanded to stop the touristification of Lisbon and put housing rights first
Despite the attempt of the Lisbon city authorities to limit the issuance of licenses for short-term housing rentals such as Airbnb, the development of the tourism industry - especially in historical areas - contributed to discriminatory pricing.
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Last December, the municipality of Lisbon approved the holding of a city-wide referendum on a complete ban on housing rentals - and only the Constitutional Court of Portugal intervened and prevented it from being held.
Among other examples is Spain. As Easter approached, tens of thousands of people took to the streets in tourist centers of the country. Demonstrations were held in Madrid, where people chanted: "Get Airbnb out of our neighborhoods."
It should be noted that some cities are still trying to tighten the rules on short-term rentals. But there is not always enough coordination between local and national governments, which often have "competing" priorities.
Some insist that short-term rentals encourage landlords to maximize profits rather than protect long-term tenants. Others, however, say that the problem is different, and point to deep structural problems - such as a lack of housing stock.
The relevant disputes reached their peak in Barcelona. The city is currently in the process of completely banning short-term rentals. In June 2024, the city authorities announced that by 2028 they would cancel approximately 10,000 existing licenses.
At the same time, complaints from lobbying groups are appearing. In this context, the publication mentions how representatives of the European Commission wrote a protest to the Spanish authorities in 2024. It was pointed out that the planned law "is not suitable for achieving the goal of combating the housing shortage."
Ron Klein, Airbnb's chief legal officer, is one of many industry representatives who criticize Barcelona's approach.
I don't think there's any evidence that restricting the rental of free rooms creates more long-term housing for people
On the other side of the Atlantic
One of the largest and most famous cities in the United States, New York has shown that you can be tough on short-term rentals, but not without negative economic consequences.
In September 2023, in response to the fact that rents rose sharply after the easing of pandemic restrictions, the New York authorities introduced a new law. Owners were prohibited from renting out their homes for less than 30 days unless the owner also lives there.
According to AirDNA, in August 2024, the number of short-term rental properties listed on Airbnb fell significantly to 3,700, which is 83 percent less than in August 2023. Instead, the number of properties available for rent for more than 30 days increased by a third to 34,300.
But the main impact, critics say, was on rising hotel prices, an effect exacerbated by the return of business trips.
The average cost of a hotel room in New York in 2024 was $318. This is 5.7% more than in the previous year. Hotel occupancy increased by 2.6 percentage points to 84.3 percent.
"The lack of short-term rentals limits the number of beds available" - said Jan Freitag, an analyst at CoStar Group.
The consequences of the changes that were introduced in New York "disproportionately affected travelers with limited budgets." That is, those who usually use rental platforms.
At the same time, the housing market does not seem to have been affected since the introduction of the new law.
Analysis by AlixPartners shows that rents in New York have increased by almost 15% from the first quarter of 2022 to the end of 2024. This increase is similar to cities such as Seattle, Tokyo and Toronto (24%, 18% and 17% respectively).
This contradicts the protesters' claim that short-term rentals lead to higher housing and long-term rental prices, stresses Steve Braude, senior partner at AlixPartners.