Apartment buildings in Berlin Fabrizio Bensch/Reuters

The city will formally allow vacation rentals again, but there’s a strict new set of rules—and even tougher penalties.

Berlin’s “Airbnb ban” is over.

The city’s assembly decided Thursday to overturn a law introduced in April 2016 that barred almost all landlords from letting their apartments to short-term visitors, enforced by a maximum €100,000 ($123,000) fine. Thursday’s ruling means that, starting May 1, owner-occupiers will, under certain conditions, be allowed once more to rent out their own home as much as they want, and to rent out second homes for up to 90 days a year. For a city that’s become well-known for its extremely tough laws governing vacation rentals, the new ruling might seem like a major compromise.

It nonetheless imposes some pretty firm conditions on vacation rentals and makes the penalties for ignoring them far more stringent. All landlords seeking to rent out their home will only be allowed to do so if they get a general permit from their borough, even if they intend only to rent their property out for occasional short stays. While landlords applying for a permit at their primary residency will likely be approved, second home owners may face a more rigorous process. Landlords who leave an apartment untenanted, meanwhile, will need a special permit from the borough to do so after three months of vacancy without having a permanent tenant registered, cutting the current vacancy grace period in half. Most strikingly, the maximum penalty for breaking the rules has been multiplied by five, to a potential fine of €500,000 ($617,000).

That fine is likely intended as a menacing message to anyone tempted to reserve an apartment as a full-time vacation let, rather than a levy authorities will impose regularly. But it’s clear the city means business: Under the new rules, if a landlord needs to sell their property to pay a fine, the property’s management would be handed over to a trustee. Overall, the ruling is still a relaxation of the current situation, and it’s likely to induce a sigh of relief for Airbnb and other hosting services.

For some time now, the Berlin boroughs that attempted to clamp down on vacation rentals have only been able to pursue proceedings against a small portion of the very large number of people offering accommodation. Frequently these cases have been bogged down in appeals from owner-occupiers, making the process long-winded and expensive. There’s also a good reason to put quotation marks around the term “Airbnb ban.”Any quick scan of Airbnb in recent years would have revealed a significant number of apartments in Berlin during the time they were supposedly banned. Clearly Airbnb landlords—both owner-occupiers and tenants subletting on the sly—felt a degree of safety in numbers, well aware that chasing every single case would be long-winded and expensive for the authorities.

But while few owner-occupiers may have been caught in the crossfire, the real targets of the ban were professional landlords, who rented out apartments full time as businesses, thus draining the available housing supply in a city where apartments are hard to come by. The overall feeling from advocates of anti-Airbnb legislation such as Stephan Von Dassel, mayor of the central borough of Mitte, was that it didn’t matter if the push to curb professional Airbnb landlords affected some owner-occupiers. They’re a relatively small group in a city where most people rent, and the anti-Airbnb crowd would accept some of them as collateral damage if it meant improving the ability for people on low incomes to secure housing of their own. The inverse of this logic: It doesn’t really matter if owner-occupiers are allowed to become Airbnb landlords if professional vacation rentals have been slashed.

Those strict laws do indeed seem to have reduced the number of professional Airbnb landlords. In 2016 alone, 2,500 apartments in Berlin were put back on the rental market following the ban. The law may also have helped to induce a shell-shocked Airbnb to negotiate as cooperatively as possible. If the tough stance seems to be succeeding in its mission to scare professional hosts off the market, it seems fair to allow others a little more leeway. What Berlin will need to look out for now is how slickly its permit system works—and whether it’s able to genuinely pursue people who flout it.

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