Positive but insufficient step: Paris attempts to tackle illegal Airbnb rentals

The City of Paris is proposing a project aiming to amnesty illegal Airbnb owners in exchange for their properties to go back on the long-term rental market.

According to the industry experts, after deploying a range of repressive measures against illegal peer-to-peer rentals, the City of Paris, which like many major destinations has seen its long-term rental stock shrink and its locals priced out as the popularity of Airbnb keeps growing, is now using a softer approach to bring back some properties on the long-term market.

Although it is a step in the right direction, the project is unlikely to deeply alter the local property landscape. According to the City of Paris, the average fine imposed for illegal renting was €13,000 in 2018, which, considering the average revenue from short-term renting, is unlikely to deter property owners.

Furthermore, it is estimated that a majority of peer-to-peer rentals in the French capital are not respecting the rules – limiting them to three months per year, taking more than 34,000 properties out of the regular market.

With very limited capacities to enforce the rules and catch offenders, it is hard to see how this proposal would squash this very lucrative business. Larger fines such as in Amsterdam where there was a plan, rescinded since, to fine owners up to €400,000 for illegal renting would give more weight to this project.

That being said, it might benefit from the unexpected help of the COVID-19, which led to a significant drop in bookings in 2020 and might last longer than initially expected, giving faulty landlords the possibility to still profit from their assets during the crisis.