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Berlin Is Banning Most Vacation Apartment Rentals

The number of Airbnb listings dropped 40 percent in a month as the city prepares for new laws to take effect.

House in Kreuzberg, Berlin, a popular area for vacation apartments (Onnola/Flickr)

Looking to rent an apartment on your next vacation to Berlin? Starting Sunday, you can basically forget about it. From May 1, Germany’s capital is banning landlords from renting out apartments to short-term visitors, with only a few exceptions permitted.

The penalty for breaking the law is a substantial €100,000 ($113,000) fine — levied on people renting their homes, never on the guests themselves. There will still be some loopholes that allow a few vacation apartments to persist, but it seems that, in Berlin at least, the astronomical rise of Airbnb and other short-stay rental sites is effectively over.

The general lack of apartments in Berlin provoked the law change. Thanks in part to German rent laws that are stricter than most other European countries, short-term rentals are often more profitable for landlords than finding longer-term tenants. In a growing city, that has made good, affordable apartments harder to come by; vacation apartments have taken over large chunks of the most desirable streets, and permanent residents have been frozen out of the market. Estimates vary about the number of permanent vacation apartments in the city, with one recent article pegging it at 14,393 units, out of a total of 1.9 million dwellings in the city.

This has provided a windfall for some landlords (and tenants who sub-let on the sly), but it’s less welcome for the many people searching for their own apartments. Locals’ tolerance of loud, late-partying tourists in their midst has also been wearing thin. Many landlords aren’t pleased with the law change, especially people who rent out apartments short-term in areas that don’t have a problem with party tourism. The Berlin Senate’s ruling nonetheless reflects a general feeling across a city in which homes are getting harder to find: Berliners have had enough and they want their city back.

The new laws still don’t mean all Berlin homestays will disappear overnight. People will still be able to rent out rooms in their homes, as long as the rooms don’t cover more than 50 percent of the property’s floor space. Landlords will also be able to apply for official permits to rent out entire apartments short-term from the local borough. Their applications must include a convincing explanation of why they need to rent the apartment short-term, which will be scrutinized and quite possibly rejected by the borough. For those that are approved, the apartment can be rented for no more than the average rent per square meter for the local area.

The changes might seem drastic, even overbearing, but it’s important to remember that the great majority of Berliners don’t own their homes. Homes in the city are thus often seen as public resources first and investment assets second. The new law also hasn’t arrived out of nowhere. It was actually passed in 2014, and Berlin landlords have had a two-year grace period to comply, either by finding permanent tenants or selling their apartments.

In the past few months’ run-up to the law change, the effects have been noticeable, with the pool of available vacation rentals drying up quickly. In February, Airbnb listed 11,000 entire apartments for short-term rental in the city. By March the number dropped to 6,700. The number of apartments offered by commercial operators fell further over the same period, from 2,000 to 1,000.

But does a decrease in the number of vacation apartments automatically equal a rise in the availability of more permanent housing? The city estimates that 1,000 fresh apartments for long-term rent should appear on the market in the next few months, with the new laws expected to release 10,000 apartments for local rent over the longer term. That’s a large number (if those extra apartments do indeed turn up) but in a city of over 3.5 million inhabitants, not necessarily a game changer. Likewise, implementation of the new law may prove to be a headache. It seems likely that some unofficial word-of-mouth holiday rentals may continue even with the threat of fines.

The vacation rental ban isn’t, however, the only weapon in Berlin’s arsenal when it comes to increasing the number of permanent homes. It comes at a time when Berlin is building large amounts of new apartments, with up to 50,000 to be built in the next 10 to 15 years. There are also possible signs that the city’s recent rapid population spike may be about to plateau. This all takes place against a backdrop of ever-tightening rental laws designed to halt untrammelled property speculation and rent rises, although these measures’ effect has been ambiguous. Taken altogether, Berlin seems to be doing everything it can to make housing more plentiful, and thus more affordable in the city. It will be worth watching to see what the long-term effect of all these moves turns out to be.

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