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The European Commission supports the reduction of short-term housing services

With the everlasting improvement of life quality all over the globe, travelling, thus the short-term housing services were on the rise for the last 10 years, and only the COVID-19 pandemic had such an effect on this market that it began a downfall. Airbnb as an online short-term housing service provider became one of the key actors in the tourism industry. This type of housing service is beneficial for the tourists, as the rent of the Airbnb flats and rooms are 20% less on average than other types of housing. 

Airbnb’s prominent role however was posing a serious problem for the communities of larger cities, as even though it supported the increase of tourism, on the other hand, it had a serious impact on local housing, rent prices, and general satisfaction of the locals. Representatives of locals from many major cities across the globe have raised their voice in the previous years, as securing living conditions became harder, given that the increased demand in the short-term housing market reduced the supply for long term housing market, thus raising rent and real estate prices. Others highlighted another problem, namely that flats rented through Airbnb are usually located in the middle of crowded areas of cities, where the inappropriate behaviour of tourists disturbs the locals.

The European Union has recognized that maintaining liveable cities are equally important as attracting tourists. Based on this recognition, the European Commission intends to take steps for regulating the short-term housing market. In parallel, many cities have taken steps against ‘uncontrolled Airbnb’. A regulatory tool is for example the possibility to prescribe for how many days a flat can be rented through platforms such as Airbnb in a calendar year. The Court of Justice of the European Union (CJEU) argued in a French case that such restrictions are not against the freedom of services. In the given case Paris, the second greatest market of Airbnb after the United States, applied a 120-day rule for Airbnb, that was backed with the decision of the CJEU. 

The European Commission is currently working on a regulation as part of the Digital Services Act after the CJEU pointed at a loophole in EU law. In the given case it considered Airbnb an online platform and not a real estate company, thus declaring that it is not subject to local housing regulations. It is still unclear that what type of regulation the EU intends to impose on Airbnb – experts expect the first regulatory draft to be made in 2021.