Airbnb ban upheld in Berlin courts

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In a highly controversial dispute, Berlin’s courts sided with the City over Airbnb ban. Effective May 1, 2016, homeowners were no longer able to rent out entire apartments to visitors, most commonly through through sharing economy websites such as Airbnb, Wimdu, and the like without a proper license.

The law emerged as an action towards keeping housing affordable and accessible to Berlin’s permanent residents.

Since coming into effect last month, the law has faced harsh criticism. City authorities reported that dozens of cases have been filed thus far. Four property owners who claim the Airbnb ban infringes on their constitutional rights as property owners brought the most recently decided case forward. The capital’s constitutional court didn’t agree and upheld the regulation.

Effect of the law thus far

Berlin’s administrative court believes that “the ownership guarantee provides no claim for a residential property to be used with the expectation of making profit”. Since May 1, about 15,000 apartments have been taken out of the tourist rental market.

How much of an impact does this make in a city with new residents pouring in each day? Along with the shortage of housing to begin with, Berlin demand for housing is continuously on the rise. Job seekers are turning to Berlin as an emerging as a start-up haven and large numbers of refugees are still living in shelters, in addition to the Germans who’ve lived there their entire lives.

Does this change tourist’s experiences?

Another question to ask is what effect will this ban have on Berlin as a tourist destination. Sure, sharing economy concepts such as Airbnb are still less than 10 years old. But the fact that millions of homeowners and travelers utilize the site all over the world speaks volumes as to its popularity.

Traditionally, visitors could choose between a budget hostel or a pricy hotel. Airbnb filled that gap of providing a private, comfortable stay on a hostel price tag. Could this ban deter visitors from choosing Berlin as their next travel destination in lieu of a city with less stringent regulations?

Global impact

Although cities like New York and San Francisco have already placed a similar Airbnb ban in the U.S., the Berlin ruling was the first significant challenge to a city regulation against such rental agreements across Europe.

Gracia Vara Arribas, a lawyer who advises the EU on the sharing economy feel that, “Berlin’s verdict will surely impact the behavior of other cities.” Already, Airbnb is engaged in a legal dispute with the city of Berlin and the European Commission recently took a stand against legal roadblocks to the sharing economy.

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