Barcelona plans to enact a citywide ban on all short-term rentals to address complaints that tourism is to blame for a local housing crisis and soaring rents.
- Similar restrictions globally
- Short vs. long-term rentals for landlords
- Rent with Flatio
- Insurance for landlords
- Flatio’s StayProtection for landlords
Barcelona is set to implement a comprehensive ban on all short-term rental properties across the city to combat the housing crisis, reports Bloomberg.
The coastal city of Barcelona draws over 10 million tourists from around the globe annually. This influx makes it not only the most-visited city in Spain but also one of the premier summer destinations in Europe.
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However, this popularity comes with significant challenges, as the city grapples with the repercussions of overtourism.
The sheer volume of visitors strains local infrastructure, disrupts daily life for residents, and contributes to issues such as overcrowding, noise pollution, and environmental degradation. The surge in tourism also exacerbates housing problems, with short-term rentals reducing the availability of long-term housing options and driving up rents.
The latest initiative seeks to address ongoing complaints that tourism is a major factor in the local housing crisis and the steep rise in rental prices. By banning short-term rentals, the city aims to mitigate the housing shortage, increase the availability of long-term rentals for residents, and stabilize the rental market.
Stop to new licenses
Barcelona will stop issuing new licenses and will not renew existing ones, with the goal that by 2029, no homes will be permitted to operate as tourist accommodations, the mayor announced at a press conference in late June. Currently, approximately 10,000 homes are registered as tourist rentals.
“More supply of housing is needed, and the measures we’re presenting today are to provide more supply so that the working middle class does not have to leave the city because they can’t afford housing,” Collboni said. “This measure will not change the situation from one day to the next. These problems take time. But with this measure we are marking a turning point.”
Although numerous cities worldwide are grappling with similar pressures, Barcelona's action represents perhaps the most assertive approach globally toward regulating short-stay apartments. These accommodations, frequently advertised on online platforms, have been a focal point of the city's efforts to curb overtourism and its negative impacts.
Barcelona's stringent measures could set a precedent for other cities facing the dual challenge of promoting tourism while safeguarding affordable rentals in Barcelona and maintaining quality of life for residents.
According to a spokesperson from Barcelona’s urban planning department, the city has already prohibited the rental of rooms to tourists, yet rental prices continue to rise.
Collboni said that Barcelona currently has “skyrocketing rental prices that are becoming more expensive every day.”
According to Idealista, rental prices per square meter in Barcelona rose by 14% over the 12 months leading up to April, making them the highest among all Spanish cities. The Barcelona Tourism Observatory reported that the city welcomed 16 million tourists in 2023.
Similar restrictions around the world
Cities around the world, including Europe, Asia, North America and Australia, are implementing restrictions on short-term rentals to combat rising housing costs, displacement of locals, overuse of resources and overtourism.
Let’s take a look at some of the measures that governments in different cities have taken so far, as reported by Euronews.
Europe
Vienna's capital city of Austria has declared that starting in July 2024, homeowners will be restricted to renting out individual units to tourists for a maximum of 90 days per year. Parts of Vienna have already enforced these limitations since 2018, with plans to extend them citywide. The initiative seeks to prevent properties from being exclusively dedicated to short-term rentals.
Residents of Paris who wish to rent out their primary residence on housing platform must first register with their local town hall. They are permitted to rent out their primary residence for a maximum of 120 days annually.
If they wish to rent out a second home or exceed the 120-day limit, they must officially convert the property into a furnished tourist accommodation. Paris has established a specialized unit tasked with identifying illegal rentals and imposing fines on violators.
Berlin had initially imposed a ban on Airbnb, which has since been lifted, although stringent regulations with substantial fines remain in place.
In Berlin, hosts must obtain a permit to rent out an entire property for short-term stays. Second homes can only be rented out for up to 90 days per year.
In Munich, short-term rentals of entire homes are restricted to eight weeks annually, after which specific permission is required.
Meanwhile, in Stuttgart, hosts renting out more than half of their property for short-term stays are limited to 10 weeks per year without a permit.
Florence has followed Rome's lead in implementing regulations on rentals. The city plans to restrict new tourist accommodations in its historic center. Venice and Milan are also considering similar measures.
This movement appears poised to expand further. Italy's tourism ministry has crafted legislation aimed at curbing short-term vacation rentals nationwide. The law is designed to assist popular tourist destinations grappling with housing shortages and overtourism.
The proposed law, which focuses on rentals of less than 30 days, is still under development. It proposes a minimum stay requirement of two days in cities and tourist hubs.
In Amsterdam, property hosts are allowed to rent out their accommodations for up to 30 nights annually. Exceeding this limit necessitates obtaining a permit for short-term rentals.
Portugal
In an effort to address increasing rental costs, Portugal has stopped issuing new licenses, with exceptions made for rural regions.
All licenses for vacation rentals will now undergo review every five years. Additionally, a new framework to regulate rental prices is being implemented. Owners are eligible for tax incentives if they choose to convert their properties back into regular residences.
In London, hosts are restricted to renting out their properties for 90 nights or fewer annually without needing to apply for a change in usage. These limits are enforced to ensure that short-term rentals remain sustainable and cause minimal disruption in the city.
In Scotland, hosts with new listings are now required to acquire a license for short-term letting before accepting bookings.
In Edinburgh, obtaining planning permission is mandatory for renting out a second home. The city's recently announced 10-year development plan might grant the council the authority to deny short-term lets entirely in the future.
In Northern Ireland, individuals offering tourist accommodations as a business, must obtain a certificate from Tourism NI.
U.S. and Canada
A rising number of cities and states across the USA are implementing stricter regulations. In certain cities, limiting the issuance of permits for short-term rentals serves not only to control tourism influx but also to sustain profitability for current hosts. Here’s how several popular tourist destinations in the U.S. are managing rentals:
Facing challenges from overtourism and soaring housing costs, Honolulu is taking action against short-term vacation rentals. Hawaii has tightened regulations by prohibiting rental stays of fewer than 90 days on Oahu, where the renowned Waikiki Beach is located. Additionally, counties on the island now have the authority to implement their own measures to gradually reduce short-term rentals as of 2023.
Known for being the residence of Elvis Presley and the site of Martin Luther King Jr.'s assassination, Memphis, Tennessee is a well-liked tourist spot. As of July 2023, new hosts in the city are required to obtain a license. This involves securing a minimum of $1 million (€930,000) in insurance coverage and designating an adult within 80 kilometers who can promptly address any violations of city regulations, such as excessive noise levels.
In early June 2023, New York City attracted attention when Airbnb filed a lawsuit against the city challenging its prohibition of short-term rentals. A law implemented in July introduced stringent regulations encompassing registration, zoning, and property maintenance requirements.
Hosts must also demonstrate residency in their properties when hosting guests for stays shorter than 30 days, and are limited to accommodating a maximum of two guests per stay.
Hosts must also register their listings with the mayor's office, and any listings that are not registered are prohibited from booking platforms under the newly enacted Short-Term Rental Registration Law. Violations can result in fines of up to $5,000 (€4,670) for hosts. As a result, fewer rentals are expected to be accessible in New York, and some bookings may be canceled while hosts await approval.
In Palm Springs, California, there is a restriction on short-term rental days, with properties limited to 26 days per year. Additionally, the city has imposed a cap of 20 percent on the number of homes in residential areas that can be used for short-term rentals. In San Francisco, California, there is a 90-day limit on rentals, accompanied by rigorous compliance regulations.
Canada is also taking a firm stance on rentals. Certain boroughs in Montreal, Quebec, have implemented a complete ban on new short-term rentals to prioritize housing availability for residents. Additionally, in Quebec, the maximum duration of stay is limited to 31 consecutive days.
In Vancouver, there is a restriction limiting each stay to 30 nights, and the property must serve as the owner's primary residence. Meanwhile, in Toronto, hosts are permitted to host guests for a maximum of 180 days annually.
Asia and Australia
Penang, a sought-after tourist destination in northwest Malaysia, implemented a prohibition on short-term holiday rentals in May 2023 to address disruptive tourist behavior.
Certain commercial properties, including serviced apartments, are still permitted to accommodate guests for up to three days. However, they must comply with regulations requiring registration with the local government, payment of an annual fee, and approval from at least three-quarters of the residents in their building.
Tokyo
Although Airbnb is permitted in Tokyo, Japan, regulations implemented in 2018 resulted in a sharp decline in listings. Short-term rentals are restricted to 180 days annually and require either an onsite owner or a designated administrator. Hosts are also obligated to collect guest information for government reporting purposes. Additionally, in specific districts, rentals are only allowed during designated periods of the year.
Singapore
While Airbnb is not explicitly prohibited in Singapore, stringent regulations restrict its use for short-term holiday stays. The country enforces a minimum rental period of three months, which extends to six months for government housing.
Sydney
In Sydney, Australia, Airbnb hosts are restricted to renting out their properties for a maximum of 180 days per year. Bookings exceeding 21 consecutive days are exempt from this limitation.
Short-term vs. long-term rentals for landlords
As a landlord, deciding between short-term and long-term rentals is a pivotal choice that directly impacts profitability, workload, and property management strategies. Each option presents unique advantages and challenges, making it essential to weigh the pros and cons carefully before committing.
This section explores the considerations landlords should evaluate when choosing between short-term rentals, such as vacation rentals, and long-term leases. By understanding the implications of each approach, landlords can make informed decisions aligned with their investment goals and market dynamics.
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Short-term rentals:
Pros:
- Higher rental income: Short-term rentals generally command higher nightly rates than long-term rentals, particularly in popular tourist destinations or urban areas.
- Flexibility: Landlords have the flexibility to use their property for personal use or accommodate friends and family between rental periods.
- Potential for higher occupancy rates: Short-term rentals often see increased occupancy rates, especially during peak seasons or local events, which can maximize rental income.
- Greater control over property: Landlords can closely manage their short-term rentals, including guest screening, maintenance, and cleaning schedules, ensuring the property is well-maintained and meets high standards.
Cons:
- Higher turnover and increased workload: Managing short-term rentals requires frequent turnover and cleaning between guests, which can be time-consuming and labor-intensive.
- Seasonal demand: Demand for short-term rentals can fluctuate seasonally, resulting in periods of low occupancy and potential income variations.
- Legal and regulatory considerations: Short-term rentals may be subject to local regulations, permits, and taxes, requiring landlords to stay informed and compliant.
- Higher expenses: Operating short-term rentals can incur higher expenses such as utilities, maintenance, and cleaning costs, impacting overall profitability.
Long-term rentals:
Pros:
- Stable rental income: Long-term rentals offer consistent monthly rental income, providing landlords with predictable cash flow.
- Lower turnover and reduced workload: Compared to short-term rentals, long-term leases involve less turnover and maintenance, reducing the landlord’s workload.
- Fewer legal and regulatory considerations: Long-term rentals typically face fewer regulatory hurdles and compliance requirements than short-term rentals.
- Lower expenses: Operating costs such as utilities and turnover expenses are generally lower for long-term rentals, potentially improving profitability.
Cons:
- Lower rental income: Long-term rental rates are typically lower than short-term rates, potentially resulting in lower overall income.
- Less flexibility: Long-term leases often require landlords to commit to extended lease terms, limiting flexibility for personal use or rental term adjustments.
- Limited control over property: Landlords may have less control over their property, including tenant selection and property use, due to tenant rights and protections under lease agreements.
- Potential for vacancy and turnover costs: Vacancies between long-term tenants can lead to periods of lost rental income and turnover costs to prepare the property for new tenants.
Considerations:
- The choice between short-term and long-term rentals hinges on factors such as location, market demand, personal preferences, and financial goals.
- Short-term rentals offer potential for higher income and flexibility but require more active management and compliance with regulations.
- Long-term rentals provide stable income and reduced turnover costs but may offer less income potential and flexibility.
- Landlords should evaluate each option’s pros and cons based on their specific circumstances and investment objectives.
- Consulting with a knowledgeable real estate professional or property management company can provide insights into local market conditions and regulatory landscapes.
Rent hassle-free with Flatio
Are you finding being a landlord too demanding? You're not alone.
Many landlords who want to enter the rental market often feel overwhelmed by the responsibilities. To address this, they often hire property management companies to handle tasks like tenant screening, background checks, and rent collection, allowing them to focus solely on receiving payments.
However, relying on property managers can be costly and time-consuming. Finding a trustworthy manager with consistent service is challenging without automation.
Flatio, a rental housing platform offering flexible stays, was designed with these challenges in mind. More than just a rental marketplace, Flatio educates landlords on their rights, responsibilities, and legal updates, providing a comprehensive solution to rental management.
Here’s an overview of how Flatio empowers landlords:
- Free Listings: Post your property without any fees.
- Flexible rent setting: Set rental prices according to your preferences.
- Varied rental periods: Offer durations from 5 days to a year.
- Efficient rent collection: Simplified, quick payment processes.
- On-time payments: Flatio ensures on-time rent transfers.
- Digital convenience: Automate rent payments and lease management online.
- Accommodation options: Rent out entire properties or individual rooms.
- Professional tenants: Access a pool of reliable, high-paying tenants thanks to our focus on digital nomads.
- Global reach: Reach tenants across Flatio's diverse markets.
- Direct engagement: Communicate directly with the tenant and sign leases online.
- Calendar management: Easily manage rental schedules with the calendar synchronization function.
- Centralized control: Handle multiple properties through one platform.
- Legal security: Access lawyer-approved lease agreements in multiple languages.
- Regulatory updates: Stay informed on relevant rental laws.
- Educational resources: Access detailed guides on the rental process.
- Support services: Receive dedicated customer service support.
- Tenant screening: Review feedback and information on potential tenants.
- Transparent processes: Clear visibility into the entire rental process.
- Fair fees: Commission deducted only from received rent payments.
- Privacy protection: Flatio complies with privacy regulations, ensuring data security.
Insurance for landlords
As discussed in the article, navigating the rentals market requires a proactive approach to risk management, especially through comprehensive insurance coverage. Landlords should prioritize obtaining the right insurance policies to protect their interests and ensure a secure and enjoyable rental experience.
Flatio’s StayProtection for landlords
At Flatio, we uphold a deposit-free policy and aim to offer landlords an alternative method to safeguard their properties, all while alleviating deposit-related worries for tenants. This commitment has led us to develop various services and implement diverse measures to ensure the safety, security, and peace of mind for landlords.
Among these initiatives is StayProtection, designed to provide comprehensive coverage for landlords.
What does StayProtection for Landlords include?
StayProtection for Landlords is a package of services offered by Flatio in partnership with AXA to provide landlords with a higher level of protection and peace of mind during their rental experience.
Here’s a list of the base services provided to every single landlord renting via Flatio:
- Upfront payments
- Ready-made lease agreement
- Tenant risk warning
- 7 days a week support
On top of all this, most of our landlords use our Rental Insurance for Landlords - Powered by AXA. It provides you with additional coverage that was specifically designed for Flatio landlords and includes:
- Liability insurance (up to 20 000€ per lease)
- Assistance services insurance (up to 500€ per lease)
- Legal assistance insurance (up to 1000€ per lease)
- 24/7 emergency line to handle all insured events
Happy renting!
