Lisbon mayor Fernando Medina has pledged to ‘get rid of Airbnb’ once the coronavirus pandemic is over.
In a text written in English for the UK’s Independent, Mr. Medina admits that a third of the city center has been lost to holiday rentals, incurring incalculable social consequences.
The new Renda Segura (Secure Income) program launched in the Portuguese capital aims to enable key workers to return to the city center after being priced out due to a tourism boom.
The program works like this: Landlords afraid of their apartments lying empty can apply to rent them to the municipality, for a minimum term of five years. The city in turn takes on the burden of finding tenants, through an affordable housing program targeted at young people and lower-income families.
Rents are capped at levels between 450 euros per month for a one-bedroom to 1,000 euros for a generously sized house. For landlords, the income from these fixed rents might be lower than they could have earned from renting to tourists, but it is at least risk and hassle-free, and exempts them from both property and capital gains taxes.
The aim is to sign up 1,000 rentals this year. So far they have had 177 applications.
“We’ve paid a social price,” said Medina. “Essential workers and their families have increasingly been forced out as Airbnb-style holiday rentals have taken over a third of Lisbon’s city center properties, pushing up rental prices, hollowing out communities and threatening its unique character.”
In a statement, Airbnb said that it “helps local families stay in Lisbon and 60 percent of local hosts say the additional income they earn from hosting means they can pay the bills and support their families.”
Medina’s plan does not mean “we don’t want tourism or need visitors to return to Lisbon as quickly as possible”, he adds.“It’s simply time we do things differently and visitors will ultimately benefit”.
Why do tourists love Airbnb?
Mayor Fernando Medina’s decision to get rid of Airbnb as soon as the COVID pandemic is over does not please tourists. Indeed, this famous Portuguese city attracts a lot of visitors, yet organizing a tourist stay there is not often easy. An organization like Airbnb offers services that make this task easier. To understand this, we simply need to list the different offers of this agency.
For starters, before booking a trip, the customer can compare prices of airbnb in lisbon with cozycozy.com. Thus, he can choose the proposal that suits him. Rentals with this provider are always available in a local neighborhood, where the visitor can share his days with the locals, taste the local food and soak up the culture of the country.
The main advantage of this offer is its affordability. Indeed, the cost of hotel rooms in this city is very high, this organization allows people who wish to do so, to have a pleasant stay in Lisbon with an affordable budget. In addition to the attractive rates, this provider offers its customers a significant comfort. Also, it gives the possibility to organize trips for couples, families or friends, renting for example a whole apartment at very affordable prices.
It is understandable that visitors do not agree with the decision of the mayor of Lisbon.
The Portuguese capital is not the only European city hoping to curb Airbnb’s prospects.
Ian Brossat, deputy mayor of Paris in charge of housing, said in May that COVID-19 and subsequent fall in short-term rentals provided the city with “a unique opportunity to switch properties previously listed on Airbnb to conventional rentals and ensure that they again benefit Parisians.”
The French capital is looking at buying properties bought as investments and leased exclusively as short-term rentals from landlords who have been hard-hit by the COVID-19 crisis.
Amsterdam banned short-term vacation rentals in three central neighborhoods from July 1. Since the start of the pandemic, the Dutch city has seen 21% more rental homes on the market compared with the same time last year, an increase attributed to the decline of Airbnb’s business.
For the full text of Medina’s article click here
The real estate market in the capital continues to be characterized by an increasing supply of apartments for rent.
While in February of this year, around 50 new ads were appearing daily on the server Bezrealitky, in March it was 84 and so far in April, it has been 75. It still stands that the apartments going on the market had originally been intended for short-term leases – on Bezrealitky, specifically, it’s 20 to 25 a day.
Initial prognoses, however, expected April numbers to be significantly stronger.
“At the end that didn’t turn out to be true, mostly due to the impact of the Easter holidays, but also the announcement of gradual easing of restrictions. More and more apartments, originally intended for short-term leases, also end up in the offer column in second-hand systems which don’t monitor the quality of ads in any way,” says the CEO of Bezrealitky, Hendrik Meyer.
He says that this path is often used for offering leases without a contract and lasting for example only one month when the owners haven’t yet given up on the prospect of a strong season.
However, the easing of government restrictions won’t culminate until May 25, and a more robust return of tourists is still nowhere in sight. For example, the Hotel and Restaurant Association of the Czech Republic estimates that tourism won’t restart before autumn, and not in mass numbers by far.
Apartments originally intended as Airbnb rentals also continue to enter the supply.
This is not the only indicator of the fact that Prague’s apartment rental market will continue to have a lot to offer – after all, on March 26 the aggregate service Sreality listed roughly 6,200 apartments for rent while these days it’s nearly 7,900. The several months’ old situation which was characterized by a brutal excess of demand is thus starting to turn around.
“In the segment of residential leases, the demand in March was at 62 % in comparison to last year,” says David Šimečka, who leads the department of residential leases at the real estate agency Svoboda & Williams.
As of now, April demand numbers are comparable to last year’s, but the increase in interest focuses primarily on cheaper real estate. “Our driving force is the decreased rent prices, in particular,” Šimečka added.
Despite the fact that rent prices decreased by tens of percent in certain areas, some people expect that living in the capital will be more expensive in relation to earnings and they are leaving the city.
This is how Hendrik Meyer interprets the trends he has been observing on Bezrealitky – the increase in apartments and houses sold in the Central Bohemian region for the second month in a row, despite an overall decrease in the country. “These are primarily Prague citizens, moving due to the impact of the current situation,” Meyer says.
Finally, it’s worth mentioning that sales of new apartments in Prague dropped by nearly a half, which can be seen in March data published by the server CenovaMapa.org. It can be surmised that due to the state of emergency, up to 225 fewer new apartments were sold, which in the context of real estate developer revenues means a drop by nearly 1,6 billion CZK.
The City of Prague has undertaken an inventory of its housing fund and the apartments it owns.
The analysis showed that the city, along with the city districts, manages over 31,000 apartments. Of these 31,000 municipal dwellings, nearly 8% are currently unoccupied. The analysis also showed that the municipal housing fund in Prague is relatively small compared to other cities.
For the first time ever, complete data was obtained on the city’s housing stock in all 57 municipal districts through an initiative led by the City Councillor for Housing, Adam Zábranský. An analysis by the Prague Institute of Planning and Development (IPR) showed that out of a total of 31,456 municipal apartments, 2,409 are unoccupied. Many of these empty apartments are in poor condition and would require renovation before they could be rented. Only 266 apartments are currently ready for tenants to move in without renovations.
“Apartments that have not been repaired, regardless of whether they are managed by the city districts, need to be improved as soon as possible. The Affordable Housing Fund has 500 million crowns in subsidies for reconstruction, and we can offer another 500 million to city districts as interest-free loans,” said Adam Zábranský.
“It is good that we are focusing on all the possible causes of Prague’s housing shortage. Nonetheless, the greatest challenge now is to make sure that Prague residents aren’t forced to look for housing outside the city limits because of the present situation,” explained First Deputy Mayor Petr Hlaváček.
Municipal apartments account for 5 % of all apartments in Prague. Vienna, Copenhagen, and Zurich have fewer than 10 residents for each municipal apartment. Prague currently has 42 residents for each municipal apartment, a figure similar to Budapest. An even more extreme situation is found in Bratislava, which has 217 residents for each municipal apartment.
“In addition to increasing the number of municipal apartments, Prague needs to accelerate the construction permit process and open brownfields to development. If we can address these issues, we will start seeing more affordable apartments that the city so urgently needs,” concluded IPR Director Ondřej Boháč.