Another key European city has dealt a blow to Airbnb's profitability. This week, 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 from the town hall before posting an advertisement for a short-term rental on a website, and renters must pay the traditional French "tourist tax."
With 350,000 listings, France is Airbnb's second-largest market after the United States, and Paris, the most visited city in the world, is the service's biggest single market, with 65,000 listings. An Airbnb spokesman told Reuters that the rental website would comply with the new rules and ensure its clients knew about it.
The new regulation will make it harder for those renting out property to exceed the 120 days a year legal rental limit for a main residence, and makes it easier for authorities to track which properties are rented out, and also to collect local taxes.
In the ruling, the City Council noted that Paris had lost at least 20,000 rental properties from the market over the past five years, and tourist rentals now make up to 20 percent of the global rental offer in the central and western part of Paris,
Paris began collecting the tourist tax from Airbnb guests in 2015, and 50 French cities now collect the fee from short-term guests. Reportedly, France collected $8.3 million in tourist taxes last year from Airbnb rentals.
Airbnb's Counteroffer
In response to the ruling, Airbnb has offered to create automated limits on rentals in Paris and other large cities to ensure its hosts do not rent their property beyond the 120 days a year legal limit for a main residence in France.
"We had proposed Paris and other large French cities an alternative to the registration with the automatic blocking to 120 nights of lodgings on Airbnb in order to avoid hidden professional use (of the service)," Airbnb spokesman Aurelien Perol told Reuters.
Europe Fights Back
The new regulation will go into effect a year after Airbnb announced that it would self-regulate its listings in London. In December, Airbnb announced that it would ban London-based hosts from renting out entire homes for more than 90 days per year without official consent from city councils. Significantly, the site itself would prevent the listings rather than leaving enforcement up to local officials. At the time of the announcement, a report suggested that Airbnb could lose more than $400 million in potential London bookings for 2017.
Other European cities have also taken steps to limit Airbnb's growth and to make sure the company (and its users) pay the same taxes that traditional hotels do. In 2015, Amsterdam was 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 on sites like Airbnb—residents can only share the properties in which they live, like a traditional bed-and-breakfast.
And just a few weeks ago, a report from the University of Siena warned that residents were being driven from Italian cities due to Airbnb rentals taking over available apartments, calling for measures to restrict the company's dominance in city centers.