Milan
In Italy, students in Milan and Rome slept in tents outside universities at the start of the academic year in September to protest the lack of affordable housing. Days later, thousands of people took to the streets in Lisbon and other centers of Portugal to protest against rent prices.
The two countries, like others in Europe, are facing a housing crisis, including the explosion of shortterm rentals on platforms such as Airbnb.
In response to this phenomenon, local authorities have introduced rules that attempt to protect their cities and residents without insulting the tourism sector and visitors.
The effectiveness of these measures depends on the objectives of the regulations, the application capacity and the cooperation of online platforms. However, a recent study has shown that regulation reduces the supply of properties for shortterm rentals and hinders the professionalization of this market, limiting the action of multiunit hosts.
After recovering from Covid19’s impact on tourism and travel restrictions last year, European countries are on track to break prepandemic 2019 records this year. In the first half of 2023, the European Union recorded a 12.9% increase in the number of nights spent in traditional tourist accommodation compared to the same period in 2022 an increase of 0.9% compared to 2019.
Shortterm rentals via online platforms are becoming even more popular. The number of overnight stays booked on platforms increased by 18.8% in the first half of the year compared to the same period in 2022 and by 22.6% compared to 2019. The data comes from Eurostat, the EU statistics institute, based on data from Airbnb, Booking, Tripadvisor and Expedia.
While the platforms have become attractive for those looking for accommodation due to their cheaper prices compared to hotels, they have become a problem for the more touristy cities.
“The most direct and dangerous effect is the reduction in the availability of units for longterm rental,” he says Sheet Filippo Celata, Professor of Economic Geography at the University of La Sapienza in Rome.
“This impacts access to housing for low and middleincome populations. And when the phenomenon is concentrated in one area, it impacts the entire city, exacerbating inequality between rich and poor neighborhoods.”
Celata is coauthor of a study published in July in the journal Annals of Tourism Research that compared 16 European cities with varying levels of regulation of shortterm rental platforms to examine the effectiveness of the measures. Using data up to 2019, the article analyzes everything from pioneering examples like Amsterdam, which introduced the first rules in 2014 Airbnb was founded in 2008 to Rome, which had no standards at all.
In general, the debate and implementation of regulatory measures are based on two approaches that do not always fit together. One of them is to limit the professionalization of the sector, that is, situations in which a host manages several entities on the platforms. Another is to combat hyperconcentration in tourist areas, typically historic centers and urban areas with good public transport access, which is driving residents away.
In the first case, the authorities’ main tool is to limit the number of days each unit can be rented. In Amsterdam this limit is 30 days, while in Paris it reaches 120 days. In the second case, it is possible to impose geographical restrictions, for example banning new registrations in the most affected districts. This is what the mayor of Florence is currently trying to do to preserve the historic center, which is a UNESCO World Heritage site and accounts for 75% of the city’s shortterm rental properties.
The study finds that cities that adopt minimally strict regulations can reduce overall pressure from online platforms, measured by the number of available onesizefitsall advertisements, by around 30% compared to municipalities without regulations.
The effectiveness of the rules changes in relation to the main objectives. They prevent the professionalization of the sector while protecting the host who rents an individual property. The study calculates that the proportion of multiple unit managers in cities with regulations decreases by about 25%.
The regulations, which are intended to prevent the offer from being concentrated in a few parts of the city, have only a minor impact. Unless there is a complete ban on shortterm rentals in tourist areas a decision that would have to apply retroactively in crowded cities, raising legal problems the geographical restriction brings with it a number of technical problems, such as differentiation of the city by zones, which makes their application more difficult and also poses the risk of the phenomenon spreading to neighboring addresses.
“I think a good approach is that of Paris, which is trying to reduce the job offer through citywide standards. “It’s easier and more effective,” says Celata. “In addition, professional hosts tend to operate more in the center than on the periphery, which is ultimately an indirect instrument of deconcentration.”
Another conclusion is that the rules package requires convincing or forcing platforms to cooperate with authorities by banning irregular hosting and data sharing, an issue that is the subject of EU regulations currently in place be processed by Parliament.
One basic piece of information that websites must provide is the number of days a property will be rented, especially if there is a limit on shortterm rentals. “A casebycase assessment is very difficult in a city like Rome with 25,000 units. In order to apply standards, collaboration between platforms is necessary,” says the professor.
Given cities with different characteristics and different economic dependence on tourism, Celata considers it ideal to have a mix of local interventions for specific needs and national interventions with more competence in regulations. “What is important is the political will and ability to introduce sufficiently strict standards.”