Prague Seeks to Rein In Airbnb to Avoid Ghost City Scenario

(Bloomberg) --

Prague is widening its campaign to put the brakes on Airbnb and other holiday rental websites, which they say are locking locals out of the housing market and changing the face of neighborhoods.

The Czech capital this week approved a plan that calls for legislative changes allowing local authorities to restrict short leases, improve tax collection and force the platforms to share more details about its users, including the number of guests during a stay. The city is cooperating with the national government and will try to push the changes through parliament this year.

“We just have to be able to counter the adverse effects of the boom of short-time rentals through digital platforms for citizens whether it is the touristification of neighborhoods, rising rents or lack of housing,” said Hana Kordova Marvanova, who prepared the proposal. “Unfortunately, the current legislation does not give us means to address the issue.”

Prague has debated for years whether to apply stricter rules to rein in Airbnb. The issue has intensified lately due to ballooning Airbnb rentals in Prague and growing complaints from citizens about noise, damage to historical buildings and rising rents. The city is also battling a housing crisis as apartments are taken off the market by owners jumping into short-term rental craze, mirroring a growing trend across Europe.

Airbnb Response

Airbnb disputed the claim that the system overloads the housing market and pushes out locals. Company spokeswoman Kirstin Macleod said a 2018 study by the Czech Center for Economic and Market Analysis concluded that Airbnb accomodation was equivalent to just 1.8% of the city’s total housing stock.

Prague Seeks to Rein In Airbnb to Avoid Ghost City Scenario

Nevertheless, the company takes “local concerns seriously,” she said in an emailed response to questions from Bloomberg, and is willing to work with all parties in Prague and across the globe to make home sharing viable and safe.

“Recently, we have approached the City of Prague on several occasions,” Macleod said, “and offered to work together on a similar partnership and we are hopeful that we can find a common solution in future.”

Another study in the same year by the Planning and Development Institute of Prague, however, concluded that as many as a fifth of all apartments in the capital’s Old Town district, and 10% in the surrounding areas are listed on the site. Some 80% of listings are entire apartments, according to the study.

Joining Forces

So far, Prague has been unsuccessful in regulating the holiday rental site and similar efforts have previously failed to gain the support of lawmakers. Kordova Marvanova also said that previous talks with Airbnb didn’t bring any feasible results for the city.

It has now joined forces with the Ministry of Local Development to finalize the proposals before going to parliament. City officials are also holding talks with the Czech Chamber of Commerce and counterparts in Cesky Krumlov, a southern Bohemian town also heavily hit by over-tourism.

“There is an overwhelming agreement that we need the platforms to share information with us,” Kordova Marvanova said.

If the amendments are passed, Airbnb-type platforms will have to provide municipalities with detailed information regarding units being used in the business, sharing basic host data and the number of guests. According to Kordova Marvanova, the capital led unsuccessful negotiations with Airbnb about providing the data.

Other proposals still have to be further discussed with the ministry. The city also proposes giving local authorities rights to ban renting whole flats as opposed to single rooms, limit the number of rented days or subject the apartments for rent to stricter fire safety rules.

Prague’s council approved a move to join 10 European cities - Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna -- that signed a letter calling on the European Commission to update its laws as part of a battle to control the sites.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.