New Law Threatens Short-Term Rentals in Paris

 

Many of today’s travelers find rooms with Airbnb, a website that connects property owners with vacationing renters. Foreigners can skip the pricey chain hotel and take in local culture, while owners can rent out their homes when not using them. On the surface it might seem like a win-win for all…except maybe the host city. Top destination, Paris, is experiencing downsides to Airbnb popularity.

Where did All the Locals Go?

It’s probably not surprising that The City of Light is one of the most sought-after destinations on Airbnb. This is reflected in the city’s population shift – according to the Mairie de Paris (or town hall), seasonal rentals take up 7% of homes in Paris’ first four arrondissements (or neighborhoods).  In some neighborhoods, almost all residents rent out to international visitors. Since Airbnb tips the supply-demand scales in favor of vacationers, the local hospitality industry is feeling the competition. On top of this, Airbnb skirts Paris taxes since they process payments through offices in Ireland. Even though 10 million French residents used Airbnb, the website paid just 100,000 euros in French taxes.

The rivalry turns criminal when Airbnb property owners rent their homes more often than the Paris government allows. In 2016, France created a law stating that primary residences may only be rented 120 days, or four months, each year. If owners want to rent more often than that, their property’s status must be changed from residential to commercial. Many owners simply don’t do it because the process costs time and money. According to parispropertygroup.com, the amount of registered seasonal rentals does not reflect the market. Barely a hundred are registered compared to the thousands available elsewhere online.

airbnb paris crackdown

Paris Lays Down the Law

While Airbnb advises users to obey local law, the Paris government is still determined to restrict apartment owners. Property owners operating outside the law now face heavy fines if they don’t respect the 120-day limit. In early-to-mid 2017, thirty-one owners of 128 rentals faced a combined bill of 615,000 euros (or $723,000). Then in November 2017 the maximum fine jumped from 25,000 to 50,000 euros.

On December 1st, the government crackdown forced Airbnb hosts to register their property. The deadline came and went with only 11% of owners – or 11,000 out of 100,000 properties –showing up for registration. As for January, the government will require over-120 day rentals show a year-round rental license.