Sharing Verboten Berlin Puts Kibosh on Airbnb and Co.
Starting this fall, people in Berlin who rent out apartment space for short periods could face steep fines. Politicians say the measure will help combat ballooning rents. But opponents counter that it is a gift to the hotel industry as it battles competition from companies like Airbnb.
Perhaps Berlin's senator for urban development had people like Katja Odenthal in mind when he was thinking about a ban on vacation rentals. Odenthal has been living in Berlin for 10 years, near the very popular Alt-Stralau neighborhood in the Viktoriakiez district on Rummelsburger Bucht, a cove in the Spree River.
Since Odenthal has always somehow seen herself "as a communal-living type," she rents out parts of her apartment to tourists on a short-term basis. At first, she did it for financial reasons. Odenthal is a freelance writer who writes what she calls "mainstream art", and her income has never been lavish. Now she hosts people from around the world, mainly because she thinks it's "exotic and exciting" to interact with people with people who have different lifestyles and ways of thinking.
Odenthal has strangers in her home 60 to 70 percent of the year. She makes between 300 ($400) and 400 in additional income, which she uses to offset her rent. In the summer, when the city is teeming with tourists, the rental fees sometimes even cover her entire rent.
Like many others, Berlin transplant Odenthal also advertises her rooms on Airbnb, a San Francisco-based website that is becoming increasingly popular worldwide. The concept already has a number of imitators -- such as 9flats, housetrip and Wimdu -- that operate on a very similar principle. The sites collect a commission for each night booked. Some charge the landlord, others charge the renter and some charge both. The business magazine Forbes estimates that Airbnb earned $150 million in revenue last year.
The US company now lists more than 300,000 private homes and apartments available for vacation use in 34,000 cities in 192 countries. Indeed, the concept of "vacationing with private hosts" seems to be catching on, especially in Germany. Staying with local residents instead of in uniform pseudo-designer hotels, often at a fraction of the cost, is particularly hip among young people.
Although Airbnb has only included listings in Germany for about two years, the site already lists more than 20,000 overnight accommodations.
Political Grandstanding or Help for Renters?
Surrounding themselves with strangers appeals to people like Odenthal, and attracting tourists to the city also ought to be in the interest of Berlin lawmakers. Nevertheless, a few operators of short-term accommodations have become the new bogeymen of Berlin politicians. They accuse them of taking living space off the normal rental market and leasing it out for short-term periods instead--and driving rents up in the process.
Offering accommodations to tourists can certainly be a profitable undertaking. Depending on the city, the furnishings and the size of the space, owners can charge between 50 and 100 a night. Foreign guests find it appealing to stay with ordinary people because they can often introduce them to the city in a way that is very different from using a travel guide.
In some cases, tenants move out of one apartment and into another one but don't give up their leases. Instead, they operate the old apartment as a vacation rental apartment, creating a business model in the process. They can quickly earn between 1,500 and 3,000 a month, which is significantly more than local rents usually are, and they often don't pay taxes on the extra revenue.
But that's the exception. Odenthal, for example, only rents one room to out-of-town guests. However, some politicians, such as Berlin Senator Michael Müller, a member of the center-left Social Democratic Party (SPD), even see that as removing living space from the ordinary rental market. They argue that -- at least in theory -- a room like the one in Odenthal's apartment could also be rented to a longer-term subtenant, such as a student. But, Odenthal notes, "the room I rent normally wouldn't even be available on the ordinary rental market."
In June, the Berlin Senate -- the city-state's parliament -- considered a ruling that could go into effect this fall. It states that anyone in Berlin who is caught renting his or her apartment to others for commercial purposes will pay a substantial fine. Haus und Grund, an association of private property owners, characterizes the new law as "political grandstanding." The city government, the organization argues, should first "prove, using hard statistical facts," that Berlin residents no longer have access to sufficient living space at reasonable prices.
Indeed, of the roughly 1.8 million residential units in Berlin, no more than 12,000 are used as vacation accommodations. For this reason, the new law will hardly ease the housing shortage.
- Part 1: Berlin Puts Kibosh on Airbnb and Co.
- Part 2: Growing Threats to an Entire Business Model