Airbnb Suffers Court Blow on Paris Registration Rules

LUXEMBOURG (CN) — Vying to combat the city’s housing crunch, a limit on Airbnb rentals in Paris should stand, a magistrate with the EU’s highest court said Thursday. 

“Neither the freedom to conduct a business nor the right to property are absolute. Far from it: both can be limited,” Advocate General Michal Bobek wrote in his nonbinding opinion. Though closed in light of the Covid-19 pandemic, the Luxembourg-based court has still been issuing opinions in cases it heard before the outbreak began.

(Photo by Walt Girdner)

Here the case stems from fines of 15,000 euros ($16,300) that Paris officials issued to the owners of two Paris studio apartments being rented on the Airbnb platform.

In France’s capital, Airbnb’s largest market, housing has long been in short supply, and Paris is home to more total Airbnb listings than any other city in the world. 

Paris determined after an investigation that Cali Apartments and HX had rented their properties without authorization and would have to turn them into residential accommodation. 

Both companies appealed, arguing that states cannot dictate what companies do with their properties under the Services in the Internal Market Directive. The directive is an EU law that establishes a single market for services within the 27-member political and economic union. The Paris court referred the case to the EU’s highest court for clarification.

The fight over Airbnb has become a central point in Paris’ mayoral elections, which are currently on hold due to the Covid-19 outbreak. Incumbent Mayor Anne Hidalgo has spent her last six years in fighting Airbnb, cracking down on anyone breaking the city’s regulations and forcing the company to collect tourist taxes. 

In a major win for the home-sharing site, the European Court of Justice held last year that France cannot require the California-based company to hold a real estate license since it is only connecting people not providing accommodations. 

But today’s opinion seems like a win for Hidalgo. “Combating a housing shortage and seeking to ensure the availability of sufficient and affordable (long-term) housing (in particular in large cities), as well as the protection of the urban environment, are valid justifications for the establishment of authorization schemes broadly based on social policy,” Bobek wrote.

Though not required, rulings from the Court of Justice often follow the same legal reasoning as advisory opinions. 

Airbnb said it took note of the ruling. “Airbnb is not a party to this case and the CJEU has already set out how Airbnb should be regulated in Europe,” the company said in a statement. 

Beyond the larger legal issues over the applicability of the directive and whether the city can force short-term rentals to register, Cali Apartments and HX raised a number of smaller complaints about the imprecise of the language of the legislation and their difficulty in accessing information from the city. 

Bobek responded: “I fail to see the appellants’ point as to why it is not sufficient to have the municipal rules published in the city hall and online on the city of Paris website. Beyond that general statement, it is not the role of this Court to become a substitute web-master for the city of Paris website, by engaging in discussion of whether or not that interface is sufficiently updated and accessible to everyone, in particular to potential applicants for authorization.”

The Luxembourg-based court has begun its deliberations in the case and a ruling is expected later this year, though that may be delayed as a result of Covid-19 measures. 

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