ECJ ruling on housing shortage: Cities are allowed to ban Airbnb rentals

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Two owners from Paris have to pay a fine of 15,000 euros for renting their apartment through Airbnb without a permit. On the other hand, they go to Europe's highest court – and suffer a setback. The judges thus also create a legal basis for other metropolises in the EU.

In the fight against the housing shortage, EU countries are allowed to restrict short-term rentals via platforms such as Airbnb. This has been decided by the European Court of Justice. The top EU judges confirmed a French regulation, according to which the short-term rental of apartments in large cities with more than 200,000 inhabitants and near Paris requires a permit. This does not violate the EU Services Directive, provided that there are compelling reasons of general interest. And the fight against the housing shortage is such a compelling reason.

France had introduced such a permit requirement for the greater Paris area and all cities with more than 200,000 inhabitants. For failing to comply, the owners of two studios in Paris were fined 15,000 euros each. They had to offer the apartments on the normal rental market again. The owners then called the French Court of Cassation. He turned to the ECJ to clarify the question of whether the national directive is in line with European law. It does, the Tribunal decided.

The authorization requirement is intended to create a system to combat the housing shortage "to take account of the deterioration in conditions for access to housing and the heightening of tensions in the real estate markets, which is an overriding reason for the general interest". The measures are proportionate – the intended aim cannot be achieved through a more lenient regulation.

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