With 65,000 listings, Paris is Airbnb’s biggest single market, but the home-sharing site is facing increased pressure in the City of Light.
Back in July, the Paris City Council ruled that locals wishing to rent their apartments on sites like Airbnb must register the property with the town hall. As of Dec. 1, potential landlords must obtain a registration number before posting an advertisement for a short-term rental on a website, and renters must pay the traditional French "tourist tax." The new regulation also makes it harder for those renting out property to exceed the 120-days-per-year legal rental limit for a main residence, and will make it easier for authorities to track which properties are rented out, and also to collect local taxes.
Airbnb, which has a reputation for working with local authorities, is capping the number of days per year its users can rent out their properties in central Paris. According to tech site CNET, a "nights hosted" counter will be added to users' profiles to help track the number of nights they've already rented out their homes.
Notably, the limit only applies to Paris' first four arrondissements, which will affect rooms close to the Louvre, Notre-Dame cathedral and the Marais. The restrictions will not impact hosts who have permission to rent a property for longer.
Ian Brossat, the housing advisor to the Paris Mayor, told Reuters that the cap should extend to the whole of Paris.
Loi prévoit que ces annonces illégales doivent être retirées dans tous les arrondissements. Aux derniers nouvelles, la loi du profit ne vaut pas plus que les lois de la République.— Ian Brossat (@IanBrossat) November 14, 2017
“The law demands that these illegal listings must be removed in all boroughs,” Brossat tweeted. “The law of profit is no more valuable than the laws of the Republic.”
Meanwhile, Airbnb is touting its platform in the city, careful to position it as something that is not threatening the housing market. "Paris is the number one city in the world for Airbnb and we want to make sure our community grows responsibly and sustainably," said Emmanuel Marill, GM for Airbnb in France. "While experts across the world agree that Airbnb has no significant impact on the housing market, we want to do our bit to address historic housing concerns in Central Paris and help make this city a better place for everyone. We know this solution is effective, targets bad actors and is free for everyone, and we hope other platforms will follow and introduce similar measures to promote responsible and sustainable travel in Paris."
Airbnb & Europe
The law goes into effect just as other cities throughout Europe crack down on Airbnb’s growth. In January, Airbnb started banning London-based hosts from renting out entire homes for more than 90 days per year without official consent from city councils, part of a move to "mollify" regulators. The rule had been in place since 2015, but was rarely enforced. In the nine months since the ban went into effect, Airbnb reported a two-thirds reduction in London bookings of over 90 nights.
In March, authorities in Barcelona announced a ban on new hotels and visitor apartments opening anywhere in that city's center, putting the future of its tourism and travel growth into question. Six months later, Spain’s Balearic Islands voted to put a cap on the number of tourist guestrooms available on the islands of Mallorca and Ibiza—and promised heavy fines for those illegally renting apartments. “We want balanced and sustainable tourism so that it can keep being our lead economic activity for many years to come,” Biel Barceló, tourism minister for the Balearic Islands, said.
Airbnb criticized the Balearic rules as confusing and said that it was ready to work with the local authorities. “By working together, we can help build sustainable tourism models that spread benefits to many—not keep them in the hands of a few,” the company said in a statement at the time.
Other cities cracked down on the service even earlier. Amsterdam, in 2015, became one of the first cities to have Airbnb sign a deal to collect local taxes from hosts. Since then, as in Paris, the site has agreed to enforce the limit on the total number of days guests can stay in an Airbnb rental in Amsterdam—currently 60 days per year. Berlin, meanwhile, has restricted the listings of entire homes; residents can only share the properties in which they live, like a traditional bed-and-breakfast.
Airbnb claimed that the limits in London and Amsterdam prevented locals from breaking the rules, but according to UBS, the restrictions may have also hurt the company’s finances. Airbnb's global growth has slowed due to city regulations and crackdowns, the Swiss global financial services company reported, and in Berlin, the number of listings declined by about 10 percent in 2017.
According to a recent survey from Morgan Stanley, Airbnb adoption growth has slowed in both the U.S. and Europe over the last year, as the percent of travelers who used Airbnb over the last 12 months increased only 25 percent, a “notable deceleration” in the adoption curve compared to 2016. At the same time, adoption expectations of 29 percent for 2018 are roughly flat to last year's expectations of 28 percent for 2017, so there is a chance adoption could continue to undershoot estimates. “Said another way, we're a year behind where we'd thought we'd be...and, in effect, Airbnb's adoption curve is flattening faster than what were our prior optimistic estimates,” the report said.
At this year’s Skift Global Forum in New York, Airbnb co-founder and chief strategy officer Nathan Blecharczyk noted that his business currently has 360 agreements around the world that determine how it operates in everything from towns to entire countries. “Some are policy changes focused on keeping it part-time,” he said. “Others are tax agreements.”
These regulations, he said, are leveling the playing field for traditional hotels and home-sharing services. “We’re prepared to pay all taxes,” he said, arguing that revenue from Airbnb guests can help support all kinds of cities.