LUXEMBOURG (CN) — In yet another blow to Airbnb, the EU’s top court ruled Tuesday that affordable-housing interests justify limits in Paris on short-term rentals.
Airbnb is not a party in the case, but Paris lawmakers surely had the San Francisco-based tech company in mind when they passed their law requiring homeowners to register before renting out their property. The law is one of several cropping up across the globe as Airbnb’s rise nudges out long-term rentals.
When two property owners, Cali Apartments SCI and HX, challenged the fines they received for converting their Paris studios into short-term rental units, the Court of Cassation in France invited Europe’s highest court to interpret whether the city’s law ran afoul of the EU’s Services in the Internal Market Directive, which established a single market in the 27-member political and economic union.
The 21-page decision from the Grand Chamber of the European Court of Justice finds that Paris lawmakers were within their authority.
“Combating the shortage of rental accommodation constitutes an overriding reason in the general interest making it possible to justify a national measure,” the opinion states.
Under Europe’s directive, governments can place restrictions on local markets if it is in the “general public interest,” the 13-judge panel ruled.
The court further found that the regulation was proportional and limited in scope since it only covered certain areas of Paris and did not apply to single or primary homes.
Europe’s directive “does not preclude national legislation establishing a system which makes the exercise of certain rental activities for remuneration of furnished premises intended for housing subject to prior authorization,” the ruling states.
Back in April, a court magistrate reached a similar opinion: “Neither the freedom to conduct a business nor the right to property are absolute.”
“We welcome this ruling that will help clarify the rules for hosts who share a secondary home in Paris,” Airbnb said in a statement.
Representatives for the property owners did not respond to a request for comment.
Earlier this year, Airbnb was forced to curb rentals to young people during the Covid-19 pandemic as customers have been rented houses via the platform to host large gatherings.
The two cases now return to the French court for a final decision.