The EU’s highest court has come down on the side of Parisian officials who had fined a pair of landlords in the city for renting out their second homes via Airbnb. The ruling effectively means that Airbnb hosts who rent out their non-primary residence must obtain a permit from the city their property is located in, a ruling which may have consequences for Airbnb in the European Union.
The issue came to a head after officials in the French capital had imposed fines on a pair of landlords who subsequently took their cases to a higher judiciary within France. Ultimately the French courts asked their EU counterparts for advice on the matter with the answer coming back that the ruling was valid having been judged to be “proportionate, limited in material and geographical scope, and doesn’t cover the rental of primary homes”.
Along with many other European cities, such as Barcelona which has recently enacted its own measures against short term rentals, Paris suffers from a lack of affordable long term rental housing with short term rentals often cited as a root cause of the issue. This latest EU ruling may set an uncomfortable precedent for Airbnb in Europe as it prepares to go public. For its part, the company issued a statement welcoming the EU ruling as a means of clarifying the situation and that it was unlikely to affect the company in any material way as most hosts rent out their primary residences.
Although experts in short term rentals such as Transparent CEO Pierre Becerril remain bullish on Airbnb’s IPO and the viability of the model in general, the trend seen amongst landlords in European cities towards long term rentals as well as an anti-Airbnb legislative climate may spell a bump in the road for the company in its European markets.