Catalonia Launches Attack on Airbnb

Airbnb_Web siteThe Catalonia government has levied a €30,000 fine against Airbnb, claiming the popular international flat rental site the site was advertising illegal rentals.

While the fine is small for the US-based company, which has been valued at more than $10 billion, the move represents a new twist in the escalating battle over short-term rentals in Spain. For the first time, government officials are going after a Web site, not the landlords, hoping to shut down a key link between homeowners and tourists.

Web sites like Airbnb and HomeAway have helped facilitate a boom in short-term rentals; in cities like Barcelona the number of apartments available for rentals of less than 30 days has more tripled in recent years.

For homeowners, holiday rentals represent the opportunity to charge higher rents and avoid the hassles of dealing with long-term renters, who are difficult to evict if they stop paying rent. With sale prices still falling, rentals have become a lucrative way for owners to generate revenue from their property.

But the growth of the industry has led to a backlash. Barcelona, Madrid and Andalucia have all moved to regulate the business in recent months. While government officials cite complaints about noise and trash, flat owners believe the new regulatory efforts are primarily the result of lobbying by the hotel industry, which is eager to limit the new competitors.

Attacking the Internet sites is a new approach growing in popularity around the world. In New York, where government officials have tried for years to limit short term rentals, the state attorney general has sued Airbnb demanding information on users who may be advertising illegal renters.

But this is a gray area of the law. The sites are not renting apartments and it could be argued they are not responsible for policing whether or not users are following local regulations. Airbnb can’t be held liable for the actions of its users any more than Twitter is responsible for what is tweeted, industry officials argue.

The fine by the Catalan government is clearly a shot across the bow of the Web sites, a warning that they are willing to use their regulatory powers to fight illegal rentals. If Airbnb does not comply, government officials are threatening to block the site in Catalan, according to El Pais.

However, that would open the door to a variety of complicated legal issues, requiring cooperation from internet providers and the courts. It would also vault short term rentals into the same discussions as the struggle over sharing technologies such as car-ride app Uber, which are disrupting entrenched industries.

“Barcelona should stay on the cutting edge of innovation, and we’re disappointed to see a ruling … that will hold the city back,” Airbnb said in a statement to Reuters. “We will continue to provide robust information about the rules in Barcelona, and require all Airbnb hosts to follow those rules.”

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10 thoughts on “Catalonia Launches Attack on Airbnb”

  1. speakfreak

    As someone who lives in a block in Barcelona with several flats rented out to holiday lets I’m totally OK with this fine. I’m getting sick of group after group of Liverpudlian hairdressers or American trustfunders screeching on the back balcony of my block at 4am, for 5 days a week, for 9 months of the year. AirBnB can easily bring in measures that would limit the number of illegal lettings e.g. by requiring or even verifying the rental licence number of the flats being posted- something that needs to be done only once for each new posting. The reality is AirBnB simply don’t want to- because that would push away a good proportion of their business. Don’t get me wrong- I love the original idea of AirBnB- to rent out your room/flat while you weren’t in it, getting a bit of extra money along the way. However the reality is that that isn’t their core market anymore. A quick look at the listings and you can see the vast majority of the postings are for whole apartments, which are available for rent for long periods-i.e. plain and simple old holiday lets- and they should follow the same rules as the rest of the sector. I know several people in Barcelona who each rent out a number of apartments on AirBnB- none of which are licenced and they get strangely silent when it comes to discussing whether they pay taxes on their earnings. In fact they use AirBnB precisely because they are much more likely to get away with it than if they use a traditional flat letting agency.
    As for Uber- they similarly have moved away from their original ride sharing concept. They now even offer their members finance to buy a standardised car so they can then permanently cruise the streets for business- which is a taxi service by any other name- except they aren’t licensed and they don’t check the insurance of their drivers. The Twitter comparison is wrong- it’s much more difficult to check every tweet than for AirBnB to check every flat- that said I’m willing to bet if there was money in it Twitter would somehow figure a way.
    As I said- I’m totally for AirBnB but they need to play by the rules like everyone else. Genuine rent-a-room for a few days- OK. Longer term, full apartment- need a license. And don’t pretend that’s too hard to do.

    1. Pedders

      you’re just playing into the hands of the entrenched interests …why should you need a licence to rent out your own property ?
      this isn’t Stalinist Russia or North Korea ..let the market decide what people want not the state

    2. Xisco

      Licence? Don´t make me laugh. We would be happy paying our taxes but here in Mallorca the hotel mafia have devised a clever Catch22. You have to apply for a tourist licence. However, tourist licences are not available. QED: If you rent out and declare income you are breaking the law. If you rent out and do not declare it you are breaking the law. Of course, everyone ignores this stupid ley and the government loses tax income.

  2. J

    I rent on Airbnb, have a Spanish registered business, my licences and pay full taxes. There are many many many others like me. It is also my hope that this current government action shakes out those businesses that are not complying with local laws. It is my greater hope, that the people living in this city

  3. J

    I rent on Airbnb, have a Spanish registered business, my licences and pay full taxes. There are many many many others like me. It is also my hope that this current government action shakes out those businesses that are not complying with local laws. It is my greater hope, that the people living in this city learn how to embrace their tourist industry and turn its financial strength into the maximum benefit for this lagging economy. Honestly I dont see much else working well in Spain, yet fear-mongers, the hotel lobby and isolationists seem bent on tearing down this opportunity.

    Speakeasy, I empathize with your living situation and strongly suggest that you call the police, who seem happy to enforce the noise constraints on tourist rentals.

  4. AirBnb host

    I have flats that I rent on AirBnb. None of them are licensed. I ensure that my guests are quiet, well behaved and respect both my apartments and my neighbours. Its true that I have had some problems but with some experience I now turn guests down if they fit the “trouble” profile.

    I am actively involved in the management of my buildings. I get my cleaner to clean the communal areas before and after every stay and out of my own pocket I conduct maintenance (such as light bulbs blowing) when there is a problem, I am not the community president.

    I also support local business by recommending local restaurants, shops and bars. Places that simply would not be visited unless my guests were sent to them. My guests are generally couples, families or groups of young people that simply would not be able to afford to visit Barcelona if they had to pay the 130 euro average for a hotel room sleeping 2 people.

    I have invested over 250,000 euros in the Barcelona real estate market, paying taxes upon purchase, employing builders, cleaners and supporting local business by buying furniture and utilities. The properties I have bought would still be empty, or as in one case squatted in by drug addicts. I have added value to these properties, benefiting my neighbours in terms of quality of life and property prices.

    I would love a licence, and I would love to pay tax. I would welcome the chance to be legitimate as it would allow me to seek investment and build up a proper business. However, where I am situated in Ciutat Vella there are only around 600 licences available (and around 12,000 illegal flats) Licences are being sold on the black market for 75,000 euros (average revenue per apartment is 15,000 a year). If I want to do this business, which is legitimate, even if it is “illegal” I have no choice but to be in the black. The Ayuntamiento have stated that no more licences will be issued. I can buy a building and have self contained flats, but the cost of this is prohibitive and there are still issues on if you can get the licence or not. As with most things in Spain it is a case of who you know.

    I understand the point with neighbours, they need to be respected but this is a small, small problem that can be easily solved if the Ayuntamiento issued more licences. You as a neighbour can also contact your administrator, president or the neighbour directly. More easily available licensing would allow you to do this as you would have rights and the host has to abide by certain requirements.

    Hotel lobbying is an issue, but AirBnb customers are not the same as hotel customers, the pie is big enough for everyone and the hotels can exist and the overall economy can benefit from this.

    In my view this is just plain shortsightedness, this can be a good thing for everybody. A different type of tourist, A boost to the real estate market, employment of support services, boost to local retail business, tax revenue, an ultimately a chance for entrepreneurs in a country where unemployment is 25%.

    To shut this down due to a few unruly tourists and a greedy local government and hotel lobby is a tragedy.

  5. speakfreak

    I’m afraid I don’t sympathise with those of you who are justifying not having a licence because the Ayuntamiento wont issue any more. 12000 rental apartments in a small area like the Cuitat Vella is horrendous! For anyone living permanently there it’s like living in the middle of a holiday camp. I’m glad you’ve learnt who are the troublemakers but for us residents we suffer while you do. And even if your guests are quiet and respectful they don’t contribute to the community socially. They don’t get their dry cleaning done, they don’t get their haircut, and they don’t send their kids to the local school. They won’t set up a little software company or open a restaurant serving a fusion of their home cuisine with Catalan. Few of them will even buy food other than some jamon and a couple of bottles of Rioja- and why should they- they’re on holiday. Result- the whole area becomes Disney-fied- “the Barcelona experience”- full of restaurants just serving any old crap knowing that if they just call it “Tapas” then the tourists will lap it up and shops selling nothing but espadrilles and paella-making kits. In a few years it will be just a middle class Benidorm, completely devoid of the qualities of Barcelona that the tourists have come here to see. It’s completely understandable and commendable that the Ayuntamiento is trying to stop that happening.
    As for “boosting the real estate market”- restricting the number of licences causes prices of apartments to go up not down (Which is a bad thing by the way- what we need is more pressure to force prices to return to affordable levels). As for “employment of support services” – I think that’s moot- a bit of extra work for some cleaners but that’s it. In fact AirBnB has put a whole lot of flat-letting agencies out of business. And do you seriously think that what’s stopping the landlords of 12000 apartments from paying tax is they don’t have a licence? And as soon as they can get one they will start paying up?

  6. speakfreak

    …sorry- me again! For those who are playing by the rules- congratulations and thank-you! I agree that the Spanish economy needs all the help it can get and tourism has a huge role to play. The problem as I see it is that city break tourism has now reached saturation point in Barcelona- the same point as beach tourism on the Costas down south. On the other hand there is HUGE potential for other types of tourism- it’s a howling shame that wine tourism here is virtually non-existent. People will cross the world to go to the Stellenbosch or Hunter Valley but few know that if they instead took a left turn out of the airport in 30 minutes they could be in one of the finest wine regions on the planet. That said- it’s also time for Barcelona (and Spain) to step up to the plate. It’s taken 30 years to get it onto the world stage and now it needs to look beyond just tourism (and tourism-led construction) as it’s mainstay for the economy. I for one think that with a change in mindset and a bit of imagination this place could go way beyond just being a nice spot for Northern Europeans to get their yearly dose of culture and culinary satisfaction.

  7. AirBnb host (again)

    Hello its me,

    Sorry but I have to correct you speakfreak.

    I do live in the Ciutat Vella, and I see the tourists in the main benefiting local areas. Especially in places like Raval. Places like plaza Trippy, which is getting horribly touristic, is benefiting as the drug dealers get replaced by tables and chairs on terraces. They are a pain in the arse, but remove tourism and economically, Barcelona dies.

    You said that “they don’t contribute to the community socially. They don’t get their dry cleaning done”

    Of course they do, my guests have both get their haircut and get their dry-cleaning done. They buy clothes, food and services, tourism is a massive contributor to the economy, something to the tune of 20 million per day if the figures are to be believed.

    True they don’t got to school but they pay taxes on goods and services that contribute to schools and, it depends on the types of tourists I agree, but in my experience they buy more than jamon, and rioja. The restaurant serving fusion cuisine is exactly what they are looking for, so this benefits from tourism as they are their customers. AirBnb guests are definitely not looking for sangria and tapas. Otherwise they would be in a hotel or a hostel, they want something more authentic. These types of tourists avoid as you call it the Disney experience.

    “It’s completely understandable and commendable that the Ayuntamiento is trying to stop that happening”

    Really? 19 new large hotels this year alone, a new cruise ship development bringing 15,000 extra people per day, Ferrari world, charging for Parc Guell? Make no mistake, the Ayuntamiento are not trying to stop this happening. Its just that they are only supporting their own and large corporate interests, not local ones.

    “As for “boosting the real estate market”- restricting the number of licences causes prices of apartments to go up not down (Which is a bad thing by the way- what we need is more pressure to force prices to return to affordable levels). ”

    You can t have it both ways, what do you want? more affordable housing in a market that is massively repressed and at its lowest level for at least 12 years, negative equity and banks scared to lend? or a vibrant real estate economy? You are on this site so I assume the later? If you want the former I would respectfully suggest that you are reading the wrong website.

    The only reason I have purchased property is because I can make money from it. Few Catalans want to live in the areas or even in the apartments I have bought and they have all required serious refurbishment. If I hadn’t bought them they would have remained empty. I am not reliant on AirBnb. I have a long term rental market available and I can sell the property, certainly for a profit even today. But make no mistake I am contributing to the economy. AirBnb allows me to be more than just a property developer it allows me to be engaged in my community, run a legitimate business that provides a liveable income and contributes to the local economy.

    “As for “employment of support services” – I think that’s moot- a bit of extra work for some cleaners but that’s it”

    Yes, my cleaner supports a family of three, my builder supports two children and a wife, plus the local ferrerteria that Ive given 20,000 to, plus bauhaus and the people employed there, plus the second hand furniture store, plus….urgh….Ikea. It all adds up, and in this economy, at this time, to say its “moot” is plain ignorance of how difficult it is for some people.

    ” do you seriously think that what’s stopping the landlords of 12000 apartments from paying tax is they don’t have a licence? And as soon as they can get one they will start paying up?”

    I would pay tax if I could get licences, and I would buy at least 10 more properties. So thats at least one….

  8. david

    I bought derilict property in spain 20 years ago and lovingly restored them – nobody apart from junkies and drugdealers lived here – tired of longterm rentals getting back what was lovingly renovated flats- after severel years – trashed properties – just breaks your heart. I am so happy now with the short term rentals and meeting people who sofar have all been lovely and respektful. I pay my taxes – account every single rental because i believe in paying them even though for no love nor money can i get a license. They want to keep me ilegal so the least thing one can do is pay taxes and keep your nose clean. I have all safety measures such as fire extingueshers etc. So am doing everything right and only the council is in the wrong deniying me legalitie. Saludos and long life free enterprise and creativity.

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