Barcelona mayor Jaume Collboni announced on Friday 21st June that Barcelona plans to ban all short term rental properties for tourists from 2029.
The move has caused major shock waves in the short term rental community. Here, we’ll break down what exactly is happening, and what it means for property managers.
What’s happening in Barcelona?
Barcelona’s mayor, Jaume Collboni, announced plans on Friday 21st June to enact a city wide ban on all short-term rentals. The ban won’t be immediate, instead aiming to phase out short-term rentals over the next 5 years. It will take a two pronged approach:
- The city will stop approving new short-term rental licenses.
- The city will also stop renewing existing short-term rental licenses..
The result? By 2029, no homes in the city will have permission to be rented out as tourist accommodation.
But why?
Like many cities in Europe, rents in Barcelona have been rising for some time, leading to a shortage of affordable housing available to residents. The ban is a reaction to claims that local residents are being priced out of the market by the increase in short-term rentals for tourists.
In a statement reported by Bloomberg, Collboni claimed that the measures are to prevent the working middle class being forced to leave the city due to unaffordable rent prices. He stated that rents in the city have risen by 68% in the past 10 years and the cost of buying a house by 38%. He added that limited access to housing has become a driver of inequality, particularly for young people.
Barcelona isn’t the first city to announce major restrictions – we covered New York’s crackdown last September.
Are vacation rentals really to blame for increased rent?
Rent is soaring not only in Barcelona, but across the whole of Europe. And so is tourism. So tourism is to blame… right?
Not necessarily. Correlation is not causation and rental markets are highly complicated. The argument against short-term rentals goes something like this:
- Landlords choose to rent their apartments out to tourists for more money than they would make on longer-term contracts.
- There is now less supply for long-term residents, leading to increased prices.
- Gentrification due to the influx of tourists (think hipster coffee spots and pricey restaurants) further pushes up the prices in certain neighbourhoods.
But let’s take a look at that second point. Increased demand for rentals in Barcelona can be traced back to more than just tourism. Barcelona’s position as a top start-up hub in Europe, for example. Over the last decade Barcelona has garnered a reputation for being ‘unicorn territory’ causing an influx of workers looking to live and work in the city.
Barcelona is also a top destination for prestigious multinationals, more and more of which are choosing to open offices in the city, generating a significant amount of new job offerings to attract workers to the city.
Add the influx of students and the trend for co-primary living (owners of multiple properties wanting to use their second home on a semi-permanent basis) into the mix and the situation starts to look more complicated.
Tourism is far from the only factor when considering a restricted supply of properties to rent. Which leads us to the next point:
Is a short-term rental ban the right move for Barcelona?
This is a question that only time can truly answer. However, there are strong reasons to suspect that it is not.
Chief among them is the economic impact of tourism in Barcelona. A significant amount of Spain’s GDP comes from tourism (it’s in the top three most visited countries in the world, and Barcelona is its most visited city). A reduction in tourism means a reduction in economic activity, which could harm local residents, especially those whose livelihood depends on the tourist industry. In fact, Barcelona’s tourist apartments association Apartur have said in a statement that the short-term rental ban will lead to higher poverty and unemployment in the city.
It’s also worth mentioning that not all vacation rentals are legally registered. Barcelona’s local government has ordered the shutting of 9,700 illegal tourist apartments since 2016, almost as many as the 10,000 apartments which are currently legally approved as short-term rentals. Banning short-term rentals runs the risk of penalizing hosts who play by the rules – those with a license – and rewarding those who don’t with a less saturated market.
What does Barcelona’s short-term rental ban mean for you?
Whilst Barcelona’s ban of short-term rentals is big news in the industry, it is far from a harbinger of the end of the vacation rental market, which continues to go from strength to strength.
However, there are steps you can – and should – take to protect not only your business, but the short-term rental industry as a whole.
- Follow the rules. As we’ve seen, Barcelona is home to a huge amount of unregistered, illegally listed vacation rentals. However, the short-term rental industry should not be defined by its worst players. Done right, it can benefit the local market, and protect both guests and local residents. But following local policies is essential to achieve this. Protect your business and the market by complying with local regulations (see details on how to find them below).
- Support your local economy. Tourism can be a boon for local residents, but it requires effort from your end. Recommend local restaurants, shops and markets. If you’re looking for cleaners, look locally. A welcome guide (digital options such as YourWelcome are available) can help with this.
- Don’t panic. Whilst the Barcelona ban was a shock, the vacation rental industry continues to grow and the demand for short-term rentals is showing no sign of slowing down. For now, properties in Barcelona with a license can continue to be used for short-term rentals, and new measures will likely be implemented gradually, giving property manager time to prepare. And with Jaume Collboni’s term as mayor ending before his proposed deadline for the ban, whether he will make good on his plans is yet to be seen.
How to check your local restrictions:
Staying up to date with the regulations that apply to you and ensuring your property complies is the best way to ensure your vacation rentals success and protect the industry.
Ultimately, short-term rentals must coexist with local communities with mutual respect on both sides. Regulations can help to achieve this and make the business safer and more stable in the long-term.
Here are some things you can do to learn about regulations that apply and ensure you comply:
- Review Airbnb’s online repository — The online repository is a helpful resource where you can look up the different regulations that apply in some of the world’s largest markets.
- Investigate your local area — Research the history of your local area and what regulations have been brought in recently – this might give an indication of potential future changes.
- Contact Vrbo — You can read the information on Vrbo’s regulatory resources page, and enquire about regulations in different markets by reaching out to GovernmentAffairs@Vrbo.com.
- Read your local government policies — Visit your local government website and search for information about vacation rental regulations. Understand role of Vacation Rental Advocacy Groups.
What happens next?
With offices in Barcelona, news of the ban is very close to our hearts at Rentals United. We have flourished in the city, and enabled the property managers we work with to flourish in return.
As always, our primary commitment is to our clients, and we will be supporting them through this transition. Understanding and preparing for the changing regulations will be key going forwards, and we’re here to help our property managers stay informed and prepare for the coming changes.