Berlin ban on Airbnb short-term rentals

upheld by city court

Website and rival portals face bleak future in German capital under ban that may inspire other
European cities to follow suit

Philip Oltermann in Berlin

The Guardian
Wednesday 8 June 2016

Tourists planning to pop over to Berlin for a weekend break may have to give up on the hipster dream
of living like a local in a spacious loft apartment, and get back into the habit of staying in an
old-fashioned hotel room instead.

Airbnb and other short-term letting agencies face a bleak future in the German capital after the citys
administrative court on Wednesday upheld a de facto ban on short-term rentals, in a landmark
ruling that could inspire similar restrictions in cities around Europe.

Under the ban, in effect since 1 May, people who let more than 50% of their apartment on a
short-term basis without a permit from the city risk a fine of 100,000 (78,000).

Landlords will still be able to let individual rooms as long as they use at least half of the apartment
for themselves. Home exchange, where two parties agree to swap their apartments for a period of
time, will also be unaffected by the ban.

The city senate has set up a website where users can give anonymous tipoffs about Airbnb usage, and
officials for popular districts such as Mitte have announced they will reject 95% of permit requests.
The senate believes the ban, known as the Zweckentfremdungsverbot or ban on wrongful use, will
help to reclaim short-term holiday apartments for the rental market amid rising property prices and
a growing housing shortage.

The four property managers who had jointly lodged the first legal complaint against the ban argued
the law was unconstitutional since it curtailed their professional freedom.

But the judge who rejected the complaint said: The plaintiffs basic rights are not violated by the
regulation and are in line with the constitution.

Explaining the verdict, Rautgundis Schneidereit said: The availability of affordable housing is
severely threatened in the entire city of Berlin and the regulation therefore justified.

Peter Vida, Wimdus head of legal, criticised the decision. The senate has been looking for a
scapegoat and now it has found one, he said. Over years the city failed to build enough housing, and
now, just ahead of the local elections, they have found someone to blame.

With rents rising and a population that grew by 80,000 last year, commercialised home-sharing has
become a highly politicised issue in Berlin.
According to estimates by the city senate, portals such as Airbnb, Wimdu and 9flats have registered
between 10,000 and 14,000 flats in Berlin almost as many as the city builds on average each year.
While Airbnb said as many as 20,000 Berlin residents let out their apartments via its website in 2015,
putting up a total of half a million visitors, the company reportedly nearly halved its Berlin listings in
anticipation of the new law.

The landmark ruling comes just a week after the European commission warned governments that
bans on sharing economy services such as Uber or Airbnb should only be used as a last resort.
Taxi-hailing app Uber suspended its services in Hamburg, Frankfurt and Dsseldorf last year after a
German court banned the company from running services using unlicensed cab drivers, though the
service still operates in Munich and Berlin.

But Berlins decision on Airbnb could set a precedent for similar bans not just in popular German
cities such as Hamburg, Munich or Freiburg, but also in other European cities where the company
faces growing political opposition, such as Barcelona and Paris.

Gracia Vara Arribas, a lawyer who advised the EU on the sharing economy, told Reuters: Cities are
closely watching each other to see what types of regulations are possible and Berlins verdict will
surely have an impact on the behaviour of other cities.

This article was amended on 9 June 2016. An earlier version said peer-to-peer holiday-rental
companies, including Airbnb and Berlin-based Wimdu, had jointly lodged the first legal complaint
against the ban; it was in fact lodged by four property managers. The spelling of Rautgundis
Schneidereits name was also corrected.