Prague joins call for EU-wide sharing legislation

Tyn Church in the Old Town of Prague, Czech Republic.
Prague Old Town

Prague was the latest city to join calls for a EU-wide legislation to curb the sharing economy, citing the impact on residential property.

The city’s mayor, Zdeněk Hřib, has also called for a ban on renting out accommodation other then the owner’s primary residence and for rentals to be limited to single rooms in property where the owner also lived.

The mayor said: “In the past, you could limit the amount of tourists in the city simply by approving a certain number of hotels of certain capacity during the process of building permits. Now in Prague, there is no possibility for the city to limit the accommodation capacity for tourists. The numbers are really critical.”

Airbnb listed nearly 12,000 properties in Prague last year, according to Prague’s development institute IPR.

Prague City Council has approved a proposal to join 10 cities (Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna) in calling on the European Commission to address problems to improve the legislative framework.

The council said: “Increasing urbanisation, together with an increase in tourism and persistent housing shortages, are the main problems our cities face. One of the related problems is that it is increasingly beneficial for property owners to set aside their properties from the long-term accommodation segment and use them for short-term rentals. These short-term rentals are primarily for tourists at the expense of locals and families who want to live and work in our cities.

“Our cities consistently attract students, teachers, healthcare workers, police officers and all other citizens who want to find their home in them. It is our responsibility to accommodate them as much as possible. However, most of our cities face chronic housing shortages.”

Prague City Councillor Hana Kordová Marvanová said: “Over the past 15 years, Prague’s population has increased by more than 12%, which is almost 150,000 [more people] in absolute terms. At the same time, Prague is also a popular destination for tourists from all over the world. In the past 10 years, traditional accommodation has been significantly increased by the way of accommodation through online platforms offering short-term accommodation.”

Prague City Hall is negotiating with the country’s Regional Development Ministry to amend its current laws covering homesharing, including registration for property and limiting the types of property which could be rented out.

A 2016 study by researchers at the University of Siena concluded that sharing platforms were changing the face of the country’s historic cities. The Airification of Cities report said: ‘The Airfication of Cities report said: “The three larger cities frequently recurring in the touristisation discourse – Florence, Venice, Rome – all have a proportion of their centres’ housing stock on Airbnb above 8%. This figure could be considered a sort of canary value for the Disneyfication of the centre. Cities approaching it should seriously reflect on whether touristisation and Disneyfication are desirable conditions for their historical centre.

“Population has been lost, and city residents increasingly tend to perceive these areas with a certain detachment, as no longer belonging to their daily experience of the city. This is a phenomenon that pre-dates Airbnb by far, but the availability of Airbnb data allows us to effectively visualise part of the dynamics at play.”

In 2018 Airbnb launched the Office of Healthy Tourism, to address over tourism by promoting lesser-known destinations.

Chris Lehane, Airbnb’s global head of policy and communications, said: “With travel and tourism growing faster than most of the rest of economy, it is critical that as many people as possible are benefiting – and right now not all tourism is created equal. To democratise the benefits of travel, Airbnb offers a healthy alternative to the mass travel that has plagued cities for decades.

“Airbnb supports tourism that is local, authentic, diverse, inclusive and sustainable. Through the meaningful income earned by the mosaic that is our global community of hosts; our ability to promote tourism to places that need it the most; and the inherent sustainable benefits of hosting, Airbnb is providing the type of travel that is best for destinations, residents, and travellers alike.”

 

Insight: Airbnb is not the reason why it’s hard to live in the centre of Prague unless you have oodles of cash. OK, it’s not the only reason. Delays in planning. Lack of enthusiasm for building. Cost of building. Strict regulations. A shortage in builders. Lack of available land. Building the wrong sort of residential. Lack of decent return from other forms of real estate encouraging speculation, but now we’re we’re starting to get into Airbnb territory…

It’s not the only reason. But it’s high profile and it offers a quick fix, which is very politician friendly. Should there be an EU-wide response? Yes, this is why we have large trading blocs, so that voices can be heard and so that companies who wish to trade know where they stand and can plan their strategies accordingly.

But even if that doesn’t happen, then the different cities who have signed the letter so far are, largely, leaning towards the same solutions; that ‘sharing’ really is ‘sharing’. You can rent out your home, with or without you in it, but no more investment properties. A number of cities are also looking at licences, which will allow for zoning and prevent the dreaded hen-night effect. If you wouldn’t allow a hotel there, why allow an Airbnb?

For the hotel sector, this is likely to limit, but not eradicate, the influence of Airbnb. There are still lessons to be learned from the platform, and many of those are lessons about service, about flexible accommodation, which are being seen in brands such as Jo&Joe and Motto by Hilton. Much as during the OTA debacle, the public has been educated as to what it can expect and demand and even if Airbnb pulls back, the traveller won’t.

 

Read more on