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Airbnb slump means Europe’s cities can return to residents

Cities like Barcelona want to use crisis to allow people to rent properties at decent rates

Airbnb has revolutionized travel and since it was founded in 2008 hundreds of thousands of property owners have used the holiday accommodation platform to make ends meet, make a living and, in some cases, make a killing.

But while hosts, as they are known, are wringing their hands over the collapse of the travel industry and their loss of income, many city authorities are rubbing theirs at the prospect of thousands of holiday lets returning to the traditional rental market. Cities complain that the highly profitable holiday lets have driven up rents and forced out residents with the knock-on effect that local businesses no longer have a community to serve.

“We hope to see a third or even a half of these licensed tourist apartments become normal apartments to rent over the next three years,” said Janet Sanz, Barcelona’s deputy mayor.

This was echoed by Ian Brossat, the Paris deputy mayor in charge of housing. “We intend to take the opportunity to regain control,” he said.

Brossat said Airbnb listings had “collapsed” in Paris and hosts had registered just 40 stays with authorities in the first three weeks of April, compared to an average of 1,210 a month last year. Airbnb refutes the figures, preferring to focus on supply rather than demand.

Meanwhile, a report by the holiday rental analysts Transparent shows a drop of about 98% in reservations in Spain since the lockdown began on 14 March. No one expects a quick recovery and in Spain the tourism industry has effectively written off 2020 and is looking ahead to next year.

In order to recoup their losses, owners are now turning to the conventional rental market, with hundreds, possibly thousands, of apartments being offered in Spanish cities for short lets of up to a year, clearly with an eye to a recovery in 2021.

However, short lets are only legal for people who have to move temporarily to the city for work. As no one is allowed to move anywhere at present such rentals are likely to be illegal and Sanz says efforts will be made to prosecute.

Barcelona has had a long-running war with Airbnb. There are 9,600 licensed holiday apartments in the city and at least that many are unlicensed, contributing to an explosion of tourism to the city since the platform started offering listings in 2009. The platform is also blamed for driving up rents in the city.

“What the owners of tourist apartments want now is stability, and they can get that from conventional lettings,” Sanz believes. “Of course they’ll make less than they would renting to tourists.”

Paris city hall, also a longstanding opponent of Airbnb’s relentless expansion, estimates the platform deprives the city’s residents of about 30,000 homes used exclusively for short-term tourist lets, including up to 25% of apartments in the four central arrondissements.

Brossat told Le Journal du Dimanche that authorities were concerned some cash-strapped hosts were renting their apartments for prostitution or other illicit activities, while others were illegally using a new type of medium-term rental contract lasting from one to nine months and reserved for students and employees on secondment or attending training courses.

“The city could buy up some of these apartments and return them to the traditional rental market,” Brossat said. “Several hundred apartments in central Paris could be involved.”

A similar pattern has emerged in Dublin, where there are an estimated 9,400 Airbnb apartments. A week after the start of Covid-19 restrictions in mid-March, 170 additional rental properties in central Dublin were advertised on Daft.ie, Ireland’s leading property website. The surge has continued, if at a slower pace.

However, the numbers switching to medium- and long-term rentals is a stream, not a river, and suggests most hosts plan to sit tight in the hope tourists return later this year. “A little bit of a shift, but not dramatic,” said Eoin Ó Broin, the housing spokesperson for Sinn Féin, an opposition party.

However, Ó Broin and housing activists hope the renewed scrutiny on Airbnb will prompt authorities to extend and enforce regulations to oblige hosts who have more than one property to obtain planning permission.

Since the regulations were introduced last year only a handful of hosts have requested permission, with thousands of others not compliant. Ó Broin proposes making it illegal for Airbnb and estate agents to advertise non-compliant properties, and to enforce that with fines.

Airbnb is bullish about the challenge it faces. In a statement, a spokesperson said: “Today there are more listings on Airbnb than a year ago and our platform will continue to be an economic lifeline for hosts in future. We are already seeing encouraging signs of domestic travel growth in some markets and the number of longer-term stays on Airbnb has nearly doubled. We will continue to work with cities to ensure that everyone benefits from travel on Airbnb, based on our experience of collaborating with more than 500 governments and organisations across the world.”

Nevertheless, the company has laid off 1,900 staff, about 25% of the total. In Barcelona it has rescinded a call centre’s contract, with the loss of 800 jobs.

Many more jobs will be lost in the coming year. An internal Barcelona city council report predicts that many small- and medium-sized tourist-oriented businesses will not survive and refers to an “irrecoverable loss of jobs” and the prospect of “streets with no life or commerce, especially in the areas most oriented to tourism”.

But for many residents, who believed the city was irrevocably lost to mass tourism, there is hope. “We have an opportunity to rethink the city,” says Sanz. “For years we’ve been saying we want to recover the Rambla and the beaches for residents. Business needs to adapt. It needs to offer what people who live here want, which isn’t souvenirs and sangria. A mono-culture aimed at tourists isn’t going to work.”

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