Cities can regulate short-term rentals despite EU single market services directive (ECJ, Sept 2020)
- On 22 September 2020, the European Court of Justice ruled that if cities regulate their local short-term rental markets to fight a shortage of housing in the long-term rental market then that doesn't go against the Services in the Internal Market Directive 2006/123/EC.
- The judges were responding to a case between the Paris municipality and two tourist rental companies of tourist accommodation, Cali Apartments and HX, which had rented out studios without the appropriate authorisation.
- Text of the ruling: https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-09/cp200111en.pdf
- Article in Le Monde (translated into English through Google Translate):
- 'In their judgment, the European judges declare that French legislation fully complies with EU law, considering that the fight against the shortage of housing intended for long-term rental constitutes an overriding reason in the general interest justifying the regulation of 'a Member State. They note that "the activity of renting furnished premises of short duration has a significant inflationary effect on the level of rents, in particular in Paris and in other French cities" , thus grateful to the City of Paris and to the State the right to establish an authorization regime. According to them, the existing regime in Paris is moreover "proportionate to the objective pursued, clear, objective, non-arbitrary and transparent". (...)
- '(T)he Airbnb platform has declared that it welcomes this decision, which will help clarify the rules applicable to guests who share second homes in Paris. (...)
- 'The City of Paris estimates that 5,000 rental companies in the capital carry out tourist rental illegally, without authorization or compensation, and has sued 350 of them from whom it is demanding the maximum fine of 15,000 euros, raised, by the ELAN law (for changes in housing, development and digital) of 23 November 2018, to 50,000 euros plus a fine of 1,000 euros per square meter rented and per day of delay, until their regularization. The procedures will therefore be able to resume.
- 'The City of Paris maintains its idea of consulting Parisians on the toughening of the regime for tourist rentals of main residences, wishing to lower the maximum duration from 120 to 30 or 60 days. A local referendum which has no legal effect, but is intended as a means of persuasion to convince the government and Parliament to change the law on this point.'
- Keywords: Airbnn, tourist rentals, tourist accommodation, local regulations, EU regulations