Europe’s top court on Tuesday gave its backing to European cities cracking down on short-term rentals of private homes to solve a housing crunch, dealing a setback to homesharing site Airbnb.
From Amsterdam to New York and Paris, authorities have blamed Airbnb for worsening housing shortages in their cities which have pushed out lower-income residents. France is Airbnb’s second largest market after the United States.
The Court of Justice of the European Union’s (CJEU) ruling came after a French court sought guidance in a case involving two Parisian apartment owners who were fined by the city’s authorities for letting out second homes on Airbnb without permission.
Owners in Paris are obliged to declare the renting of second homes to the authorities.
The Luxembourg-based CJEU said the French measure was justified as it is proportionate, limited in material and geographical scope, and does not cover the rental of own or primary homes.
“National legislation making the repeated short-term letting of accommodation to a transient clientele which does not take up residence there subject to authorisation is consistent with EU law,” judges said.
“Combating the long-term rental housing shortage constitutes an overriding reason relating to the public interest justifying such legislation,” they said.
Airbnb, which is not a party in the case, said the ruling will have little to no impact on its operations in Paris as the vast majority of hosts on its platform in the city rent out their own or primary homes.
It is not clear what the percentage is in other cities however, as Airbnb does not provide figures.
“We welcome this ruling that will help clarify the rules for hosts who share secondary home in Paris,” the company said in a statement.
“We look forward to working closely with local authorities on proportionate regulation that puts local families and communities first and works for all.”
Paris caps short-term home rental at 120 days a year.
The cases are C-724/18 Cali Apartments and C-727/18 Procureur general pres la cour d’appel de Paris et ville de Paris.