Opinion: Attacks on Short-Term Rentals Are All Hype

AI1000302Judging by recent media coverage, short-term apartment rentals throughout Spain are responsible for everything from hordes of drunken partiers roaming neighborhoods to threats against the safety of thousands of naive tourists.

Don’t believe the hype. The current crusade against homeowners renting to tourists has little to do with community complaints or concern for the well-being of tourists.

That’s all a smokescreen. This new movement to restrict homeowners from renting their apartments is all about one thing – money. And while that may sound obvious, it is getting lost in the mounting hysteria.

On a basic level, the new zeal to regulate rentals is simply a well-orchestrated effort by the powerful hotel lobby in Spain. Hoteliers don’t like the competition from the holiday rentals, which are now organised and easily accessible thanks to Internet sites like Airbnb and Homeaway.

For politicians, a campaign against short-term rentals is a no-brainer. They can appease the hotel interests and raise local tax money, while couching the entire campaign in the cloak of “responding to complaints.”

We’ve all seen this before. Politicians latch on to a populist cause as a front, while they are actually representing the interests of powerful forces.

Of course, many complaints against short term rentals are legitimate. But the real problem has been clearly blown out of proportion, fuelled by this anti-rental movement. And the drastic proposals under consideration will hurt homeowners without really solving the problem.

Barceloneta, Ground Zero

In Barcelona, the anti-rental campaign has turned into a witch hunt, with crowds marching in the streets demanding action against landlords. According to media reports, the beachfront neighbourhood of Barceloneta is suddenly a teeming cesspool of drunk and naked vandals, due to the scourge of holiday apartments. The mayor ordered a sweep and assured the masses that he will take swift action to crack down on illegal apartments.



Of course, there is no direct evidence that tenants in short-term rentals are causing all the problems in Barceloneta, unless someone has been secretly surveying the drunken naked guys about their favourite accommodation choices. Some of them were probably staying at hotels.

Barcelona is bursting at the seams with tourists and Barceloneta has always been known for attracting a rowdy crowd. Cracking down on short-term rentals won’t end the party atmosphere along the beach, unless they also want to cut beer sales.

Even the city’s own data suggests the issue with short term rentals may be overblown. The city claims to have received 109 formal complaints from Barceloneta in 2014, through August, according to coverage in El Mundo. But 50 of those complaints were received in August, after the start of the anti-rentals campaign.

In 2013, before the hype, the city received only 54 complaints for the entire year, slightly more than one a week.

The city’s much-publicised sweep in Barceloneta initially resulted in shutting down 30 illegal apartments, with politicians promising more would be closed in the days ahead.

“We’re going to make things tough for people who cheat with apartments,” Barcelona mayor Xavier Trias dramatically told the media.

But here’s the thing – those apartments that were shut down were, in fact, illegal. They should be shut down. By definition, they have nothing to do with the homeowners in Barceloneta who are following the regulations.

Bigger Issues

The scene in Barceloneta is an extreme example, but similar campaigns are on-going throughout Spain, including neighborhoods where there have been few complaints.

In some cases, hoteliers are arguing that homes should meet the same standards as hotels, which is simply silly. Homes already need to maintain the healthy and safety requirements for residences, which are good enough for the people living there. And if apartments were such hell holes, tourists would be avoiding them for the luxury of the nearby hotels.

Airbnb site

Airbnb site

Instead, tourists are voting with their money. They love the home rental option. Airbnb wouldn’t be such a threat to the hotel industry if people weren’t willing to put up with the quirks of a private home. And if a rental is not living up to expectations, tourists control a weapon far more powerful than any city inspector – a negative TripAdvisor review.

Organizations representing homeowners in Spain have made it clear they are willing to accept reasonable regulations. A strong licensing program and strong standards create system that works for both the neighborhoods and customers. It also provides a method for municipalities to enforce regulations, since the homes are in the system.

But the hotel groups are pushing for more. They want to put the small homeowners out of business.

In Barcelona, the politicians are considering legislation that would limit short term rentals to buildings that are predominantly focused on short term rentals. That would leave the business to wealthy building owners, while preventing homeowners from using their assets.

That’s not fair. In many cases, families are using their home as a source of income in tough times. In other cases, investors bought property with the understanding that they would be able to generate revenue through rentals.

Perhaps most importantly, the measures won’t work. They will simply drive landlords underground, where they will operate free of regulations and taxes.

From a property market standpoint, the last thing Spain needs right now is more uncertainty. Any measure that restricts an owner’s use of their home will only serve to cut valuations at a time when the market is showing signs of stabilising, especially among the foreign buyers propping up the market.

Now that that the media frenzy is starting to fade, it’s time for landlords in Spain to step up and make it clear that if the hotel industry wins, both homeowners and tourists lose.



8 thoughts on “Opinion: Attacks on Short-Term Rentals Are All Hype”

  1. Profile photo of Raymundo Larraín NesbittRaymundo Larraín Nesbitt

    That’s a poignant observation you make Kevin.

    I had drawn the same conclusion last year in my article “New Measures to Bolster Spain’s Ailing Rental Market”. The new landmark law I analysed in July 2013 seemed to be more attuned to cater to the powerful hotel lobby’s interests rather than landlords’ despite its open wording. As you write, it’s all about money. It would appear – in their view – it is necessary to curtail landlord’s rights so as to bolster and benefit the hotel industry as a whole to preserve the status quo which had been severely shaken over the last decade by legions of private landlords renting out their newly-acquired properties in the wake of Spain’s defunct property boom.

    This policy is short-sighted as it has the potential to impact the conveyance industry if lawmakers take to rule limiting the rights of foreign homeownership rights. Spain’s economy is, unfortunately, heavily reliant on tourism and its property industry. Should this policy become widespread to all seventeen autonomous regions in Spain it may seriously hamper conveyance transactions as it is a well-known fact that scores of non-residents acquire property in Spain with a view to make a supplementary (meagre) income on letting them out. This could potentially elongate a much-desired financial recovery. So basically, from a big picture perspective, it is shooting oneself in the foot by foolishly pursuing such restrictive measures.

    As I argued in my article it is daft to demand from private individuals the same letting standards as that of affluent hotel groups. It stands to reason private individuals are not on financial par with powerful hotel groups and it is therefore an inequality to treat both alike when they clearly lack the same (financial) means i.e. regarding compliance on health and safety standards amongst others draconian legal requirements. This would result in artificially limiting the offer in the market to affluent individuals or else powerful hotel groups who would be the only ones in a strong financial position to comply with (unnecessary) stringent short-term rental legal requirements (devised to sweep the competition from small-time landlords I may add).

    We can easily draw a parallelism to what is happening in Barcelona with popular apps, such as Uber, which has riled up the taxi industry as of late and is now hell-bent in seeking aggressive regulation because the apps competition is hurting their bottom line badly. Similarly, hoteliers seek restrictive measures, manouvering in tandem with the political establishment, to thwart private lettings. Over-regulation poses unwarranted restrictions to a free market economy that may eventually bring a backlash – because people are not stupid and cannot be easily fooled. Not to mention that people vote who is in office…

    Competition is good and should always be welcomed by consumers and users at large as it keeps companies on their toes and prices down. Competition should never be purposely restricted through interventionist legislation; much less to maintain the on-going status quo of minority powerful groups at the expense of the majority of private individuals and the broader economy itself.

    1. GarySFBCN

      Nonsense. The author bemoans the lack of data regarding complaints and yet he states that this “is simply a well-orchestrated effort by the powerful hotel lobby in Spain” without providing one shred of data/proof to prove that true.

      I purchased a flat in a RESIDENTIAL building. I do not want the keys to the front door, the first line of security, given to anyone who has only been screened to see if they have the 50 euros to pay for a night’s stay. I do not want them on the roof at 4am, drunk and yelling. I don’t want to see their trash in the common areas.

      Last May, one of the units in our building was rented to students who had loud parties. Finally, the police arrived and evicted 70 people from a 40 meter square unit. The tenant and his landlord were put on notice. I don’t fully understand but it seems as if the police have 2 more valid complaints, the tenant and landlord will lose all access to the flat for 3 years. That seems a bit harsh, and as my Castellano isn’t 100%, I may have that wrong.

      Last Sunday, an atico 2 blocks away was the target of the same – tourist rental and loud party. From my balcony I could see women squatting between parked cars to relieve themselves.

      I understand that some people need the extra money from these rentals. But until the landlords take responsibility for the guests, watch for more restrictions to be enacted.

      We are pushing for new building rules to ban holiday rentals in our building. That party in May ensures that it will be enacted at the next meeting.

      If you want to see harsher restrictions, keep pretending that this problem doesn’t exist. Residents who pay more taxes than tourists, buy more goods than tourists and are here for the long-term should not have to put-up with noise, crime, litter and other issues so you can make a buck.

      Find a better way.

      1. GarySFBCN

        I should add that I don’t live in the ‘tourist core’ of the city. My flat is several blocks away because I didn’t want to be subjected to ill-behaved tourists. But with holiday rentals of residential units, it sometimes feels like I’m in the center of things.

          1. GarySFBCN

            Loud parties confined to hotels vs loud parties in a residential building. Loud parties and rowdy behavior in the streets in the tourist core vs loud parties in rowdy behavior in an otherwise quiet residential area. AirBnB enables residential units to be used as hotel rooms, often affecting residents of the building.

            Zoning/use regulations exist for a reason.

            If you want to ensure that AirBnb be prohibited, keep denying that there are problems.

  2. Malcolm Berry

    We are renting a short term rental near Granada. Our hosts live in the suite below us and it was very welcoming to arrive after a long flight from Canada with a fridge stock with tea, milk etc. Hotels are fine for a couple of nights, but eating out becomes expensive. Loud mouthed drunks are found in hotels and rental suites. If owners do not like rental units in their block, then pass a by law limiting them. Negative reviews on Tripadvisor are far more effective than some government edict.

  3. Mark Hardy

    I’ve rented an apartment for a short term a couple of times in Barcelona and really appreciated it. Much better than a hotel room with unique furnishings, more space and good value. I do however feel for the other tenants in the building. As visitors we are generally not aware of the accepted ‘rules’ for the building, we get excited and talk loudly in the corridors, come back late after dinner, disturb the dogs, have trouble with the locks, etc. And when you live in a building that has a constant throughput of new faces it changes the feel and dynamics of the place. Your building should feel like your home: not just the space behind your front door. It seems that the condo management needs to develop better defined rules for its owners should they wish to let out their place. And if they repeatedly flaunt the rules they face the possibility of losing the rental option. The risk of losing valuable rental income might encourage the owner to select a different type of guest. But this only addresses the rental problem. What goes on in the street is another issue. As a guest I also get really annoyed with the drunken behaviour so it has deterred me from returning to certain areas. But this is a product partly of the type of tourism that has been encouraged in cities such as Barcelona. Cheap flights for a party weekend except the weekend seems to be perpetual.

  4. Simon

    You can get problem tenants in a hotel (loud, drunk Russians for example) or in a private apapartment. We have used Airbnb in Greece and Paris without problems, it is cheaper, more flexible, and gives greater choice than using a hotel, although some hotels give very good service for the money. The Spanish Hotels cannot prevent progress, they should advertise on Airbnb also, and this attempt at restricting private letting may well be against European law as Spain is a member of the EU. Spain is very good at shooting itself in the foot regarding property purchase or renting, and this restriction is certain to fail in the longer term.

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