Using Airbnb, a short-term rental service that enables homeowners or tenants to rent out properties for side income, is a huge hit with budget-conscious travelers. Regulatory boards around the world, however, can be a challenge. (To learn more, read: How To Make Money With Airbnb: Risks & Rewards.)

Among the problems that city governments and state regulators foresee with Airbnb are the potential to upend landlord-tenant relations (for example, a landlord could try to evict a tenant to charge higher short-term rents to vacationers). Regulators also fear a potential influx of travelers who will transform quiet residential neighborhoods into revolving hotel districts. There are also concerns of a current lack of oversight and accountability over Airbnb-related tax collection and adherence to zoning by-laws.

Therefore, individuals who are considering using Airbnb (either to find a room or to rent out an apartment), should conduct due diligence to check that the city in question fosters a supportive environment for Airbnb. Moreover, the listing should comply with the city's current municipal codes. (For more details, read: Is Airbnb Safe? Here Is What You Need To Know.)

Paris. In 2018, a Paris official, Ian Brossat, criticized home rental services because he believes they displace local people from the main city. Paris is the largest market in the world for Airbnb, which has over 60,000 apartments on offer. Other cities such as Spain, New York and Santa Monica share the sentiments of Brossat. In 2015, there were government crackdowns on secondary apartments in Paris set up specifically as short-term rental units with officials fining violators up to 25,000 euros. Paris Mayor Anne Hidalgo, who appointed the 20-person team running the crackdowns, also considered levying a charge of 1.50 euros per night on person-to-person housing transactions. The mayor’s housing advisor told Bloomberg, “We can’t have entire neighborhoods or buildings turned into tourist homes…that’s why we’re fighting to keep Parisians inside Paris and we won’t let tourist rentals eat up their space.”

Barcelona. In May 2018, Barcelona continued its tough stance on Airbnb and other similar sites. The city instructed the site to remove 2,577 listings that it found to be operating without a city-approved license, or face substantial fines. Then on June 1, Airbnb and the city initiated an agreement giving Barcelona officials access to listings data. According to CityLab, "For the first time, city officials will be able to refer to host data that details specifically where apartments are located and who their registered hosts are, something that could previously require substantial investigation." Host ID numbers will verify if linked apartments do indeed have permission. In 2016, Airbnb was hit with a (still unpaid and contested) €600,000 fine for listing unlicensed apartments, following a more modest €30,000 fine the year before (that same fine was also levied against the website HomeAway). Last year, the city’s new tourism plan stipulated that vacation apartments must pay the highest rate of property tax. And since last summer, investigations by the city have already led to 1,500 unlicensed apartments being de-listed.

Berlin. German officials, placing some blame on Airbnb for Berlin's increasing rents and housing shortages, passed a law banning short-term rentals that have not received explicit permission from the Berlin Senate. However, in March 2018, the city’s assembly overturned that law introduced in April 2016 and enforced by a maximum €100,000 ($123,000) fine. Thursday’s ruling means that owner-occupiers can, under certain conditions, rent out their own home without time restrictions and rent out second homes for up to 90 days each year. This is good news for Airbnb.

Amsterdam and London. These two cities have been far more receptive to Airbnb than other European destinations. In February 2015, Amsterdam announced a cooperative effort with Airbnb in which the city would levy a tourist tax on rentals while Airbnb inform potential hosts of all rules and regulations. And Londoners interested in renting out their properties on Airbnb have benefited from an amendment to the city’s housing legislation (which passed Parliament in March 2015), which allows homeowners to rent out their house, flat or spare rooms for up to three months a year. Airbnb is booming in London. A study from property services company Colliers suggested that Airbnb’s market share in London , jumped threefold in 2017 from 2.8% to 7.6% of overnight stays.

New York. The biggest tourist destination in the United States is naturally no stranger to Airbnb. However, Recode reported that Airbnb took the city to court in August 2018 over a new law that would require Airbnb and other home-sharing companies to provide the city's enforcement agency the hosts’ names and addresses each month. Airbnb claimed the law violates its users’ privacy and constitutional rights. New York City is Airbnb's largest market but, according to the city, as many as two-thirds of Airbnb's listings are illegal. The law would severely affect Airbnb. When a similar law was enacted in San Francisco, the number of listings on Airbnb dropped by 50%.

San Francisco. San Francisco has adopted a similar policy as New York: Airbnb rentals are allowed only if hosts are full-time residents, rentals are capped at 90 days and all hosts must register with the city. However, despite these stipulations, the "San Francisco Chronicle" reported that only a fraction of Airbnb hosts have actually done the latter. Furthermore, as in other cities, Airbnb faces mounting criticism from housing activists who blame the site for reducing the already-scant supply of housing.

Santa Monica. This city has effectively wiped out 80% of its Airbnb listings by instituting the toughest regulations on short-term rentals in the U.S. The southern California city said it was spurred by overall increases in housing prices and a dwindling housing supply. The new regulations, which have been effective since June 2015, require anyone putting a listing on Airbnb in Santa Monica to live on the property during the renter’s stay, register for a business license and collect a 14% occupancy tax from users that will be payable to the city.

The Bottom Line

Airbnb is far from a stranger to controversy (for more, see: The Pros And Cons Of Using Airbnb). Supporters argue that the service allows travelers to rent more affordable lodging while opponents accuse Airbnb of being a detriment to housing prices, supply and neighborhood quality of life. Cities have a wide range of approaches in dealing with the service, from stringent Santa Monica to fairly laissez-faire Amsterdam. Given this situation, any prospective Airbnb host needs to know where their city lies on this spectrum. Otherwise, they have a possible chance of being slapped with a harsh penalty or, if a tenant, even evicted from their residence.

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