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Is There a Treatment to the airbnb “disease?”

If I were to plan a trip with friends to Portugal or Spain this summer, the first website I would check for accommodation options is Airbnb. If you are more than 3 or 4 people, renting out a flat to share could save you a lot of money. For those who are not familiar, Airbnb is a company which describes itself as a peer-to-peer online marketplace and homestay network that allows people to list or rent short-term lodging in residential properties. The cost of the accommodation can vary, but the owner of the property is always the one to determine the price. The platform makes money through a percent of service fees from every booking from both the guests and the hosts.

From my personal experience, Airbnb services are reliable and of a high quality. Moreover, Airbnb helps create some amazing experiences: sleep with sharks, book a photo shoot in a city you are visiting, cook breakfast or dinner with a famous chef, or perhaps most importantly, help them experience an up-and-coming neighbourhood like a local. Yet, despite the advantages of the home-sharing site, not everyone is enthused about many of its variables. Local governments argue that short-term house renting creates a number of negative side effects like noise, trash or lack of parking, as well as generate more serious problems such as an impact on affordable housing and neighbourhood «reputation». However, tacking such an issue is quite challenging. Identifying illegal rentals is difficult and time-consuming, and with no ease to verify rental activity and ensure that apartment owners actually act according to the rules.

The first Airbnb «scandal» took place in Berlin. The local government passed laws in May 2016 stipulating that landlords are forbidden from renting out apartments for short-term stay purposes, with a large penalty up to $113,000 should they choose to do so. The crisis then spread to New York, where in October 2016 New York Governor Andrew Cuomo signed a ban on short-term rentals. Rental of an entire apartment for a stay of fewer than 30 days is illegal with fines up to $7500. One of the most recent destinations where «Airbnb disease» immersed is Palma de Mallorca, capital of Mediterranean tourist destination – the Balearic Islands. In April this year, local authorities voted to ban all short-term rentals of private homes like those on Airbnb, which locals say have triggered sharp rises in rental prices. Under new regulations, it is no longer allowed to rent flat in a block of flats, although, some of the detached houses will still be available, as long as they are registered with the local municipality.  So protests against Airbnb have rapidly spread across Europe and capital across the globe in the past two years.

To make the topic slightly more relevant, the issue of Airbnb bans in Amsterdam was recently addressed by the Dutch Labour Party (PvdA). The Labour Party argues that only a relatively small part of Amsterdammers actually benefit from Airbnb, while most of them are paying for the cost of these rentals. The principal problem, however, lies in taxes. The Dutch government is not particularly delighted that due to Airbnb being a foreign company it doesn’t contribute to Dutch tax revenues through profit taxes. Let’s be frank. Expats and locals have been experiencing the increasingly difficult challenge to find accommodation in Amsterdam the last few years, especially in the more central and trendy areas of the Dutch capital. We’ve all been there – chances of finding an accommodation within Amsterdam for a reasonable price equal almost to zero.

Airbnb problem in Amsterdam is real and it can be a threat to the city. It drives up real estate prices that are already flaming in Amsterdam. Neighbourhood business that creates ties between residents is replaced by businesses that only focus on tourists. Is «Airbnb effect» indeed that big? According to Peter Boelhouwer, professor of housing systems at the University of Technology in Delft: “When so many flats are rented out to visitors, it has an effect on the availability of real estate. There is a great shortage in the housing market in Amsterdam and this doesn’t do it any good – but one shouldn’t exaggerate it.” Boelhouwer says that rapid growth of the number of Airbnb rentals is by no means a primary factor in the city’s gentrification, which “has been going on for a long time in the central areas of Amsterdam”.

City gentrification is a term used to describe «urban renewal» marked by inflated home prices and the displacement of the original, usually lower income, residents. Gentrification is a controversial topic. It was once thought to have a positive effect on areas where economic growth had stagnated or decreased. However, these days it is seen by some as part of a larger discrimination issue. Although gentrification of urban areas generally brings increased economic growth to the area, it displaces the original lower income residents, many of whom have lived there for generations. Families with children have to leave the city due to the inability to pay such a high housing price. Thus, Airbnb contributes to the creation of not only economic but rather social economic issues.

In fact, Amsterdam government has already taken some steps to address the impact of Airbnb on its housing market. Back in 2014, they signed an agreement which enforced Airbnb to hand over tourist tax to the city, block those addresses where the council has intervened because of complaints, and inform users of its rules that the apartment should be rented out for a period no longer than 60 days a year. However, the problem is still there and Airbnb refuses to act together with the local authorities. Consequently, as from this year, the tourist tax on Amsterdam raised from 4 percent to flat 7 percent, and moreover, the number of days permitted for Airbnb-type rentals for tourists will be halved to 30 per year.

Will the problem be solved? Maybe instead of radically banning we should think of effective policies that actually work. Maybe, we should be asking how our communities can reap the many benefits of home sharing while at the same time ensuring that everyone acts in a responsible way. Maybe, we could think of an alternative service, where house owners, local authorities and neighbours are involved in effective management of a platform that is beneficial to the city. A platform that really complies with the principles of a fair and collaborative economy.


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