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Money Matters and Legal / In Law

Paris clamps down on short-term rentals

©Sylvia Davis

In an unprecedented move, Parisian officials swept through 98 buildings and visited 1868 apartments over three days in the French capital that they suspected of being illegally rented out short term to tourists. Le Figaro reports that 101 citations were issued, or 5.4% of the properties surveyed. The city of Paris launched the campaign on May 20, in an effort to combat what they consider illegal tourist accommodation.

Paris regulations allow a homeowner to rent out their permanent residence while they are away on vacation or on occasion for short periods during the year, without any special permit. If the property is not the owner’s permanent residence, the rental period cannot be less than one year (or 9 months if the tenant is a student) unless the owner obtains an authorization from City Hall for permission to do short-term or seasonal rentals.

The owner of one of the top rental agencies in Paris said that, over his 35 years operating in France, he has seen a gradual anti-entrepreneurial mindset take hold. He spoke to us on condition of anonymity, not wanting to draw attention to his own suite of short term rental properties at this uncertain time.

“Private property used to be sacred in France,” he says. “But it is becoming a target more and more – now culminating in these absurd, police-state tactics. These latest inspections are carried out under the flag of an egalitarian motive – namely, that there is not enough housing for poor people in Paris. But the truth is that the interests of the hotel industry are behind it, protecting their revenues at the expense of competition.

“It’s like the little Dutch boy with his finger in the dyke: there’s no way you can stop this new economic reality of private rentals. They have been around in smaller, quieter scale in Paris for decades, and now the Internet is opening that opportunity up worldwide. Everyone is obliged to change their ways and adjust; it’s short-sighted to just fight to preserve the status quo and the more established interests.”

There has been a proliferation of sites offering short-term rentals in Paris, notably AirBnB, Housetrip and others. Brian Chesky, CEO of AirBnb, visited Paris in February and received the red carpet treatment.

“Paris is the number one destination in the world for AirBnB,” he said to Le Nouvel Observateur, “with 1,8 million guests per year, and 40,000 listed rentals in Île-de-France alone”. AirBnB will host its annual owner meeting, AirBnB Open, in Paris this coming November, for the first time not in San Francisco.

Strong opposition to private online rental offerings comes from hotels, who claim the activity is unfair competition. The 2014 occupancy rate for Paris hotels was at 80%, with an estimated 32 million tourists coming through Paris that year. Nobody seriously debates that, without the short term rental options, Paris hotels would be booked nearly year around and many tourists would be forced to choose other European destinations instead.

Another source of unease stems from homeowners who see their residential buildings turned into a revolving door of strangers, with the consequent noise, security and wear and tear implications. A number of the units targeted by inspectors last week were identified through complaints from neighbors.

For its part, city officials cite that the pricing for these rentals are on a par with hotel accommodation, allowing owners to obtain double or triple what they would if they rented the unit on a long-term contract.  They assert that this distorts the forces of the rental market, driving the price of rental property out of the reach of most people who live and work in the city year round.

 

 

 

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