Stop me if you’ve heard this before: a major European City in the midst of a housing crisis has started to crack down on one of the quintessential brands in the ‘gig economy’. We heard this story back in September, when London stripped Uber of their operating license. This time, however, it’s Amsterdam and Airbnb’s turn to pass the buck.
Like London, Amsterdam is struggling with housing. A study published by the University of Amsterdam in 2016 found that, over a 12 month period, house prices increased by 0.42 per cent whenever the density of Airbnb’s in a square kilometre radius increased. Couple that with a low number of allocated building permits, a lack of high-rise buildings and house prices rising to pre-2008 levels, and you have a market whose supply won’t meet demand until at least late 2019. The national student union LSVb has also estimated that Amsterdam faces the largest shortage of student housing in The Netherlands.
But it’s not just the effect on rent that has driven the city to take action against the firm. Airbnb is one of the major players in the Dutch accommodation scene, accounting for roughly 12 per cent of all overnight bookings, and a wave of sublets.
Nearly 5,000 homes in Amsterdam are permanently rented out on the house sharing site, which locks these homes out of the housing market. The estimated number of illegal sublets account for around half of the total number of Amsterdam homes listed on Airbnb.
City Alderpersons (elected councillors) such as Laurens Ivens believe that ‘Cottage Smokers,’ or ‘Pawnbrokers’ – real estate speculators who buy houses on a large scale and then rent them out to tourists – are behind a number of Airbnb properties. This practice is illegal in the Netherlands, as is renting out more than 40 per cent of your home. What’s more, the Dutch financial firm Rabobank has argued that speculators who buy property simply to rent it out disrupt the market and inflate prices, thereby increasing the risk of a housing market bubble.
The city has often struggled to gather sufficient data on these matters, however. Airbnb only agreed to actively check on whether its host sites are compliant with the law a little over a year ago.
Landlords are obliged by municipal law to report their listings. At the moment, though, the city estimates that it spends around €4m a year on policing casual holiday rentals, while also collecting online information through ‘data scraping’ to discover whether hosts are breaking the current rules.
The current law also allows the city to present fines of up to €6,000 to those found to be breaking these rules; last year, over €4.2m in fines were collected for housing fraud, the majority because of this particular violation. The city has also banned families consisting of more than four people from renting out their home.
The city took further action in January, when it announced plans to limit rental periods to just 30 days a year starting in 2019, down from the 60 imposed in December 2016. The move was, naturally, condemned by Airbnb’s policy manager, who described the move as “legally untenable”. The firm has yet to take any legal action, however.
Next year will also see new B&B owners required to apply for a permit from the municipality, which reserves the right to refuse licences in busy areas such as the growing financial district Zuidas.
Several days later, Amsterdam went even further and joined eight other European cities – including Barcelona, Vienna, Paris, and Brussels – in writing a letter to the European Commission, demanding new rules for holiday rental periods. The cities also noted their desire for platforms such as Airbnb and Booking.com to share data with regulators, whilst also installing ‘quality rules’ to prevent host anonymity.
In spite of this, Airbnb remains popular with tourists, with record overnight stays recorded in 2017. Amsterdam accounted for around 81 per cent of the 2.6m bookings made in The Netherlands, according to Statista. The French data bureau also found that, on average, traditional hotel accommodation in Amsterdam is €11 cheaper per night than an Airbnb booking.
Mid March saw The Netherlands go to the polls to elect new municipal councils (think UK city council elections, but with a better devolution package). The Dutch Labour Party (PvdA) campaigned on a total ban on Airbnb in Amsterdam, a move shared by the Socialist Party (SP) and the Party for the Animals (PvdD). The liberal parties of D66 and the VVD, meanwhile, were less enthusiastic about a ban, but nonetheless support the current restrictions, as well as a further examination of Airbnb’s practices.
The VVD (who lead the current government) recently filed a motion in the Dutch House of Representatives to label housing fraud as an ‘economic crime,’ which does suggest an increasingly hard line from them on these matters. This also comes after one of their parliamentarians, Wybren van Haga, was accused of illegally leasing buildings.
The municipal election’s largest party – GroenLinks (Green Left) – has not called for a ban. But it is in favour of increasing sanctions on those violating the 30-day period. However, such is the nature of Dutch politics that no party is large enough to govern without a coalition. It is increasingly likely that the new coalition will be comprised of GroenLinks, D66, PdvA, and the Socialist Party. Judging by their manifestos, it might be time for Airbnb to start looking for new accommodation.