Fed-Up Spanish Cities Restrict Peer-to-Peer Rentals

Spain may be one of the world's top tourist destinations, but many people in its biggest cities have grown exasperated with Airbnb-style rentals.

And now, their city councils are taking action.

Airbnb and other peer-to-peer rental websites have for years been credited with enabling lovers of travel and culture to find new ways to explore foreign lands.

However, complaints have abounded in Spain that greedy landlords are throwing out long-term tenants to cash in on the tourist flow, and that the short-term leases are pushing up rent.

By introducing a slew of new rules, Madrid's left-wing city hall plans to make it impossible for short-term rental companies to rent out 95% of apartments in the Spanish capital by the end of the year.

To get a holiday rental license, homeowners will have to prove their property has a separate entrance from the rest of the building—a condition that is in most cases impossible to fulfill.

Homeowners who rent their primary residence for less than three months a year will be exempt.

"We are aware that this is a very restrictive condition, and that is our intention," Madrid's city councilor for sustainable urban development, Jose Manuel Calvo, told AFP.

  Saturation Level

He said certain Madrid neighborhoods have reached "the same saturation level" as Barcelona, where a boom in holiday rentals has drained the city's housing supply and pushed up rents, sparking a backlash against tourists that saw protesters take to the streets.

There are now around 9,000 flats in Madrid that are rented out to tourists, six to seven times more than in 2013, Calvo said. Of these, about 2,000 operate without a license.

"The consequence is that these neighborhoods end up emptying out gradually, and this must be prevented. There is still time," he said.

Madrid city hall in January stopped issuing new licenses for tourist apartments, and only plans to resume licensing once the new system is in place.

  Theme Parks

Other cities in Spain, the world's second most visited country after France according to the UN World Tourism Organization, are also facing a surge in the number of sharing economy short-term rentals, threatening hotel businesses.

In the Mediterranean port city of Valencia, the number of peer-to-peer holiday apartments has soared by 30% since 2016.

While the situation is not as critical as in Madrid and Barcelona, the city's left-wing mayor wants a raft of new regulations to be approved by July.

"It seems important to have rules in place that, without stopping this model of the sharing economy, are compatible with cities' desire to preserve the spirit of their neighborhoods, without becoming theme parks," the city's economic development coordinator, Julio Olmos, told AFP.

The plan is to apply the same laws regulating hotels to tourist rentals. In practice under the new rules, only apartments on the ground floor or first floor can be legally rented out to tourists.

  Internet Tracking

To ensure the rules are respected, Madrid and Valencia plan to follow Barcelona's lead.

The Catalan city employs 40 people tasked with poring through holiday rental sites to ensure that properties have the proper licenses.

Between mid-2016 and mid-2017, Barcelona city hall, headed by a former housing rights activist, ordered the closure of over 2,300 holiday rental flats.

Fewer than 750 have obeyed the order, with legal proceedings underway against those still resisting.

Airbnb has, however, removed 1,500 ads for unlicensed flats, helping to return the properties to the regular rental market.