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Money Matters and Legal / In Law

Paris hunts down short-term rentals… again

Paris immeuble Art nouveau

A wave of impromptu visits by city officials to suspected short term rental properties in Saint Germain des Pres yields little results and fuels growing frustration with the city’s inconsistent policies. 

On Tuesday, January 12, the City of Paris sent investigators to storm Parisian apartments they suspected of being illegally rented out for short stays. The sting operation was based on apartments city officials identified through AirBnB and other rental listing websites.  According to Le Monde, almost 1,200 properties were investigated; and only 6% – 68 homes – were found to be engaging in illegal renting activity. This is the second operation of this kind in the last year. 

The aim was not to sanction “owners who rent their apartments out one or two weeks per year when they go on holiday,” explained Ian Brossat, deputy mayor in charge of housing in the capital. Rather, the city was targeting “professionals who advertise several properties on holiday rental websites and illegally rent these out year round, or people who buy a property with the intention to transform it exclusively into a furnished tourist-rental.”

Kathryn Brown of Paris Property Group laments the resources allocated to the crackdown and the conflicting signals from the city on this issue. “Preliminary reports from a city-sponsored study  “clearly illustrate the need for additional short-term housing in Paris,” she said. “And the mayor rolls out the red carpet when AirBnB comes to town and announces it will collect the city per-night tax on all its rentals. Then they go out and hassle 1200 property owners, with just a small fraction of them found to have even potentially violated the law. The city is all over the map on this issue. It’s frustrating for owners and real estate professionals alike.”

In recent years, Paris has adopted a fairly strict interpretation of a long-existing law to try to outlaw the exponential growth of short-term rental of private apartments in the city. Paris residents are afforded some leeway: they can lawfully rent out their homes on a short term basis for a maximum of four months per year. For any longer than that, these residents must request special authorization.

Owners suspected of violating the regulations are afforded 6 months to comply with regulations or can be taken to court and handed substantial fines. In 2014, similar inspections resulted in 20 convictions and a total of 560,000 euros in fines.

But the law is particularly burdensome for second home owners, who must apply to change the “status” of their property from residential to commercial in order to engage in any short term rentals at all. To do so they must obtain permission from both the co-owners in their buildings and from the city which can be difficult or impossible to obtain; and then pay a hefty price for the change. What’s more, the status change is permanent: if the owner decides to just live in the property again, he or she must change the status back.

Most owners – resident or otherwise – have chosen not to comply with these onerous regulations. In the meantime, Paris has become the top destination in the world for Airbnb users, boasting over 50,000 Parisian properties on the holiday rental website. According to AirBnb France, “the vast majority” of landlords renting out their property on the site are “occasional renters,” averaging 26 nights per year.

Brossat has announced plans to expand the city’s monitoring team from 20 to 25 investigators, and try to form partnerships with other popular tourist destinations such as Barcelona and New York. Brown is skeptical of those efforts. “It’s not clear what the real objective is here: lowering rents in Paris’ most expensive neighborhoods will still not put them in reach of most Parisians. Discouraging international investment in the most coveted destination in the world won’t stop visitors from coming here.  With fewer than 100 suspected violations out of over 50,000 rental apartments, this is obviously not an effective way of achieving affordable housing.”

Photo credit: Flickr / Jean-Pierre Dalbéra

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