The French parliament took an important step in tightening the regulations of Airbnb and other tourist accommodation on 7 November.
The move has been under development since April 20,23. It aims at limiting tax benefits for short-term rental properties in order to combat the housing shortage in America.
The bill was introduced by Annaig Le Meur. She is one of those behind it.
This new law forms part of an overall effort to recover housing stocks and make sure that the residential properties are used for their intended purpose, which is providing homes for residents who will stay a long time.
France’s legislation is a major step in curbing speculation on the housing market. Cities are facing the double challenge of managing tourism and ensuring housing access.
France, however, is not the only country to have passed new laws that restrict short-term rental services like Airbnb.
In response to a lack of affordable housing, and the skyrocketing cost of rents around the globe, local and national authorities are tightening regulations for short-term rental.
Despite these restrictions, and even virtual bans on certain products, the problem has not been resolved.
ICDexamines the current situation in Europe and America:
Short-term rental homes are subject to regulation and sometimes even ban by US authorities
The US has increasingly restricted short-term rental platforms, due to concerns about the impact of these platforms on rising rents, and a limited housing supply.
In February 2021 Irvine, California implemented a temporary ban on the use of short-term rental services like Airbnb or Vrbo within residential areas, citing rising costs and congestion.
New York City also took bold measures by implementing Local Law 18 which was passed last year.
The regulation effectively bans Airbnb, requiring hosts to be on site during short-term stays less than 30 days and restricting rentals to only two people per listing.
In the US, there is also a variety of approaches to regulation. Santa Monica, San Francisco Jersey City Nashville and Boston all have implemented different levels of regulation in order to curb the growth of short-term rental properties.
Rent prices are still being debated, even though some housing markets in localities have seen a slight increase.
Europe’s response has been largely caps
In cities across Europe, the struggle to find a balance between the advantages of renting short-term and the need for affordable homes is a common one.
Barcelona has, for instance, taken an extreme approach. Jaume Colboni, Jaume’s Mayor, had announced in June 2024 that he planned to completely ban short-term rentals by November 2028.
Since 2015, Airbnb listings have increased by 42 percent in Barcelona. This trend has worsened the housing crisis of the city by taking thousands of apartments off the market for long-term rentals.
Collboni stated that this initiative would reclaim 10 000 properties to residents.
Vienna will follow suit in 2024 with a new set of regulations that limit tourist rental to 90 days per year.
The measures are similar to those in Berlin where Airbnb hosts have to obtain permits and limit the rental period of second homes at 90 days.
The severity of the authorities’ approach to this issue is reinforced by the hefty penalties that can be imposed for failure to follow these rules.
London also has a 90-night maximum limit without the need to apply for a change in use. This ensures that long-term tenants are still able to use properties.
Has strict regulation worked?
AirDNA reports that the number of listings on Airbnb for NYC stays less than 30 days fell 83% between July 2023 and 2024.
The ultimate aim of the law, to convert these short-term rental units into permanent housing, has not yet been achieved.
Skift’s in-depth report shows that New York City rental markets are still tight one year after the controversial regulation.
The overall effect on housing affordability has been minimal, despite the dramatic drop in the number of listings for short-term rentals.
Rents for NYC’s median apartment have risen by less than 1 percent since the law was passed, yet one-bedroom rentals reached a new record of $4,500 a month. This shows that housing affordability is influenced by many factors, including Airbnb.
Hotel industry in the city has experienced a boom. Local tourism forecasts show an increase of visitors.
Airbnb hosts in NYC have also been forced to struggle to pay their mortgages or rent due to the decline of Airbnb business.
A loophole in law has allowed some condo owners to continue to make money from short-term rental.
A black market has also emerged for short-term rental properties, which offers minimal protection, if not none, for the guests.
Experts weigh in on Airbnb: Is it the primary culprit?
Harvard Business Review published a study earlier this year that revealed while short-term rental does contribute to rent increases, it is not the main driver.
“Put simply, restricting Airbnb is not going to be an effective tool for solving the housing-affordability problems in many US cities,” the report noted.
Airbnb was found to have only a marginal impact on housing prices. The increase in rents by $125 per year is a tiny fraction of what the study shows.
EY’s research in the UK found that there was little correlation between an increase in Airbnb listings, and a rise of housing prices.
The report stated that despite widespread concerns, Airbnb only accounts for 0.7% of the total housing stock in the United States. Most hosts also rent out their houses for less than three days a month.
The housing stock is only 0.17% if the listings are active more than 90 days per year. This further highlights the small impact of these listings on the overall supply.
Airbnb’s defense
Airbnb has responded to claims that the UK housing crisis is caused by a rise in Airbnbs.
It is generally acknowledged that Britain has not been able to meet the demand for housing in recent years. Independent estimates have found that there are around five million homes that need to be built.
Airbnb’s data shows that 40% of UK hosts list only one room, while the majority have more than that.
Airbnb, in NYC one year after the strict law was implemented, asked the city authorities to review the regulations. They cited higher prices for tourists and no impact on housing markets.
Airbnb, using Apartment List data to support its claim, noted that the apartment vacancy rate has remained constant at 3,4% since enactment of the law.
Airbnb also highlighted the fact that hotel costs have increased, as rates for hotels in NYC rose 7.4% in comparison to last year in July. This rate was higher than Co-Star’s national average of 2.1%.
Finding middle ground
Experts advocate balanced regulation that addresses both housing and economic needs.
A policy analyst said that “caps on the maximum number of days a rental property may be rented offer a pragmatic middle way”, such as London’s 90-day rule, or Amsterdam’s 30-day limit.
This allows occasional hosts to generate additional income in high demand periods without encouraging investors to remove properties from the long-term marketplace.
Neighborhood-specific caps, like those in San Diego’s Mission Beach, ensure short-term rentals don’t dominate local housing.
Experts warn that many cities have limited resources and enforcement is a difficult task.
Airbnb and VRBO collect extensive data on rental activity. By requiring platforms to share their data and to adhere to local law, they can be monitored more efficiently.
The post Does Airbnb contribute to global housing shortages? This post may change as new information unfolds
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