The ECJ was ruling on a question from the Cassation Court in Paris, in a case where two companies were appealing a lower court decision which obliged them to stop renting out apartments for short stays via AirBnb, because they had not obtained a permit for change of use.
The lower court said that the law on change of use applied to rental apartments being used for short-stay customers. The law is intended to tackle the problems experienced in other cities, such as Barcelona, where the rapid growth of short-stay rentals has taken many apartments off the market and left local people with fewer places to rent.
The two companies appealed. The cassation court wanted to know whether the Paris law was in breach of the EU rules on the free provision of services. The ECJ ruled that while the need to apply for an authorisation for change of use is a restriction, it is justified in cases where there is a shortage of long-term rental accommodation.
The ruling will go back to the cassation court, which is likely to turn down the companies’ appeal on that basis.
In the meantime, the judgement will be studied carefully in other cities like Brussels, as it gives them the power to step in and put the brakes on the growth of AirBnb-type accommodation.
“You are not allowed to rent out buildings that are intended for living in throughout the year,” Ans Persoons, Brussels-City councillor for town planning, told De Tijd.
“The ruling of the Court supports us in the fight against illegal AirBnbs and that is good news.”
The website AirBnb started out as a platform for anyone with a spare bedroom to make some extra income by letting it out to tourists for a short stay. However as the platform grew, it started to attract investors who would buy up existing apartments and rent then out to tourists and other short-stay visitors such as business travellers.
That had the result of removing properties from the full-time rental market, creating shortages in some areas and a some price levels, and generally pushing up rents for local tenants as a result.
“Research shows that in neighbourhoods with an average AirBnb activity in Barcelona, rental prices increased by 1.9% and sales prices by 4.6%,” said economist Sven Damen of the university of Antwerp.
“Because of AirBnb, there has been a shift from long to short-term rental, which is causing more and more affordability problems for the local population.”
In Brussels meanwhile, the city authorities intend to bring 1,000 properties back into the conventional rental market by the end of their term of office.
“We have to find a balance. Tourism is welcome, but we also want to keep housing affordable,” Persoons said.
“There are already more homes on the regular rental market than last year. But it is difficult to determine whether that is because of our measures or because of the coronavirus. In any case, the court’s decision helps us.”