Short-term rentals: French lawmakers launch cross-party offensive

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Regulation of short-term rentals for holidaymakers should be tightened, according to a call launched by several French parties on Tuesday (2 May) that ties in with a broader EU debate on how to facilitate data collection by online platforms.

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To combat ‘over-tourism’ and poor housing conditions that online rental platforms such as Airbnb, Booking.com, or Abritel contribute to, three MPs and a senator, all members of different parliamentary groups, co-signed the “Let’s Regulate Airbnb” initiative.

“While 4.1 million people are unhoused or poorly housed, the proliferation of these rentals is further exacerbating the housing crisis,” reads the website created for the initiative.

“We are unanimous” on the consequences of short-term rentals throughout the country, Iñaki Echaniz, the Socialist MP behind the project, told EURACTIV France.

The same was said by his ecologist counterpart, Julien Bayou, who explained that the call is “in the stage of solving issues, not so much in the stage of assessing impacts”.

The situation is rather “alarming”, particularly in the Basque Country, a major tourist destination, and in the heart of Paris, Bayou added, pointing at soaring rental prices due to over-tourism.

The initative’s manifesto highlighted a ‘vicious circle’ that pushes local populations further and further away from city centres, “degrading [their] conditions and worsening [their] precariousness”.

Overnight stays in France reached 109 million in 2019, which accounted for 20% of the total 554 million overnight stays in the European Union, according to numbers from France’s Institute of Statistics and Economic Studies (INSEE).

Taxes and overnight stays

Stricter regulation is therefore necessary, according to the lawmakers. They want to first take aim at the tax deduction enjoyed by short-term rentals and are pushing for an overhaul of the tax rules on secondary residences.

The current tax allowances would make short-term rentals much more lucrative than a year-round rentals. In the case of a “classified furnished tourist accommodation” rental, a tax allowance of 71% is applied to the declared rent.

To shift the rental market’s focus back to long-term rentals, the French MPs propose to reduce the number of overnight stays allowed for short-term rentals by 25% – from the current 120 to 90.

“Who lives away from their main residence for 120 days? No one, unless they are lying to the tax authorities,” said Echaniz.

The parliamentarians are also proposing that properties that consume too much energy should be banned from being rented out for a short period. This change would be in accordance with the French climate targets based on the EU Energy Performance of Buildings Directive (EPD).

The measures proposed by the group have already been widely condemned by the National Union for the Promotion of Holiday Rentals (UNPLV), which noted that it would constitute “a threat to the purchasing power of the French”.

“The issue with access to housing for all is complex and deserves better than an inventory of display measures directed against the only players in furnished tourist accommodation”, said the union that speaks on behalf of the major players in the sector.

An EU regulation in the working

Other proposed measures refer more or less directly to the regulation proposal the European Commission presented in November.

Citing a critical lack of ‘reliable information’ on “the identity of the host, the location where those services are being offered, and their duration,” the proposed EU regulation aims to define a common system for registration procedures.

The intent is to assign a unique number to hosts and accommodations to ensure greater transparency and a better grasp of the actual figures behind the phenomenon, which are currently blurred due to multi-listing, the practice of offering accommodation on multiple platforms simultaneously.

Hosts would be required to provide regular information, including the address, type, and size of accommodation listed, as well as the name, contact details and registration number of the business if the host is a professional and exists as a legal entity.

Similar to the European desire to harmonise data collection at the EU level, the French lawmakers recommend introducing some certification system for “short-term furnished accommodation”.

The idea is that a certified third party would guarantee the actual existence of the accommodation.

In their initiative, the French lawmakers also noted the importance of having greater access to data on the nature of each rental property, as this would “strengthen the fight against fraudulent practices to promote access to housing”.

The initiative also said local authorities should have the freedom to ‘demand’ documents relating to a rental property.

Regarding the short-rental file, EU member states agreed on a common position as early as February, paving the way for inter-institutional negotiations, better known as “trilogues”. Meanwhile, the European Parliament is still in the negotiation phase to reach its own common position.

According to information obtained by EURACTIV France, a bill on the matter is expected to be tabled before the French National Assembly in mid-June.

[Edited by Luca Bertuzzi/Zoran Radosavljevic]

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