Feargus O'Sullivan is a contributing writer to CityLab, covering Europe. His writing focuses on housing, gentrification and social change, infrastructure, urban policy, and national cultures. He has previously contributed to The Guardian, The Times, The Financial Times, and Next City, among other publications.
Facing housing shortages and mass tourism, 10 major cities want the European Union to protect their ability to regulate vacation rentals at the local level.
To get a handle on Airbnb, major European cities are appealing to a higher power.
Ten city governments published an open letter last week asking the European Union for help in what they see as a dangerous turn of events. At issue is a statement from the European Court of Justice that says Airbnb is a digital platform rather than an accommodations provider. The cities—Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna—fear such a ruling would remove a key tool they have to regulate against the worst effects of the vacation-rental industry.
“European cities believe that homes should be used first and foremost for living in,” they wrote in the letter. “More nuisances, feelings of insecurity and a ‘touristification’ of their neighbourhoods is not what our residents want. Therefore (local) governments should have the possibility to introduce their own regulations depending on the local situation.”
The issue dates back to a statement in April, after a stand-off between Airbnb Ireland (the company’s main European office) and French courts was referred to the European Court of Justice. The ECJ’s Advocate General ruled that the site was a digital platform and thus exempt from being regulated like a real estate service. If this advice is fully ratified by the ECJ in the coming months—something that happens in 80 percent of cases—the results could have many ramifications for cities.
The main concern for the cities is access to Airbnb’s host data. According to their letter, allowing Airbnb to shield its data could have catastrophic effects on cities’ attempts to enforce local laws.
“Platforms like Airbnb have exact rental data and they provide numerous services to guide the supply, simplify the process and influence the prices,” the letter says. “Yet, according to the [Advocate General’s] opinion, they would have no obligation at all to provide municipalities with information about the rentals to help them prevent violations of local or national regulations, for instance on the maximum number of days allowed.”
This could jeopardize cities’ efforts to free up apartments for full-time residents. Barcelona, as one example, has successively levied fines against Airbnb—the largest being €600,000—for failing to provide enough information to the city to vet the legality of the apartments listed on the site. Airbnb has since shared data more fully, allowing Barcelona to implement its strict licensing system for vacation rentals. As a result, it is far easier for the city to trace and close down rule-breaking apartments. Earlier this month, it even forced Airbnb and other vacation rental services to remove 107 listings. A Europe-wide ruling that Airbnb was only a digital platform, and thus not obliged to share data, could threaten drives like this.
It’s easy to understand the cities’ concern over the ruling, while simultaneously being aware of the complexities of the legal situation. A comparison with Uber in this case is instructive. In 2017, the ECJ decided that Uber could not present itself as solely a digital platform, ruling that the company was indeed a taxi service with employees, which it had to treat accordingly. This might seem to set a precedent that’s relevant to Airbnb, but Airbnb has a looser affiliation with its hosts than Uber has with its drivers, meaning that the argument for classifying it as a direct accommodation provider is less clear.
For its part, Airbnb said in its own open letter to European officials that it wants to work with government regulators, and claimed the 10 cities in their letter misrepresented the case before the European Court of Justice.
“While we cannot comment on a live case, it addresses whether a 50-year-old real estate law should apply to an internet platform like Airbnb,” the company said. “It is absolutely not about whether governments of any shape or size across Europe can regulate home sharing activities; they can, they should, and they do. We embrace that and want to work with more governments.”
What is clear, however, is that an unregulated vacation rental industry can have damaging effects on cities.
“Many cities suffer from a serious housing shortage. Where homes can be used more lucratively for renting out to tourists, they disappear from the traditional housing market,” the cities wrote. “Prices are driven up even further and housing of citizens who live and work in our cities is hampered.”
This is why the letter ends on an appeal not to the court, but to the European Parliament and the soon-to-be-appointed European Commission, the body that proposes and implements the EU’s new legislation. The ECJ can only interpret the law as it stands. If Europe’s tourist cities are to maintain control of their own housing stock and tourism industry, they’re going to need legal changes that allow them to get a full grip.