Paris for Parisians! City Hall Rousts Out Airbnb Clients
PARIS — Tourists take heed! If your idea of a perfect stay in the City of Lights involves your own Paris pad, City Hall could come knocking on your door.
Which is exactly what Paris Mayor Anne Hidalgo’s 15-strong team of inspectors did a couple of weeks ago in the stylish 1st and 6th arrondissements when they conducted door-to-door visits in an attempt to crack down on illegal vacation rentals.
The raid on supposedly illicit holiday dwellings, the second since May, is billed as part of the municipal government’s efforts to alleviate the notorious housing shortage in Paris. Officials say it’s got nothing to do with pressure from hotel owners. But few people believe that. And the whole affair is weirdly schizophrenic in a city that prides itself on being the world’s number one tourist destination.
Of course, grumbling, huffing and puffing about the endless stream of pesky foreign visitors is a time-honored Parisian tradition. And it’s true that the most sought-after neighborhoods sometimes feel overwhelmed.
“The Marais has become Disneyland,” one disgruntled resident of the quaint, central Paris neighborhood complained to the Europe 1 radio station. “They [the tourists] come and go at all hours.”
As vacation rentals have surged in popularity in recent years, more Paris property owners are cashing in. Paris is currently Airbnb’s biggest market, with more than half a million visitors using the house-sharing service during the summer of 2014.
According to a recent report on the radio station France Bleu, up to 60,000 Paris rentals are currently offered via Airbnb and other online platforms. Statistics from the French tourist association Ahtop suggest an estimated 15,000 to 20,000 of such apartments are rented out illegally.
The majority of these down-low listings are located in the city’s prime neighborhoods like Saint Germain-des-Près or Île Saint-Louis, where an estimated 17 percent of housing comprises what the French call “tourist apartments.”
City officials say they believe this influx of holiday tenants is draining local color from neighborhoods and keeping much-needed housing away from full-time residents.
“If someone rents their apartment to tourists when they go on vacation, that is not a problem at all,” Ian Brossat, Paris’s deputy mayor in charge of housing told The Daily Beast. “The problem is when an apartment is rented year-round to tourists, which means is it no longer available to Parisians.”
So what exactly makes a vacation apartment illegal? Under Paris housing laws, any primary residence rented out for more than four months is a no-go. Secondary residences or investment properties on the market as short-term rentals require a special “commercial” designation from the city.
What’s more, under the so-called “rule of compensation,” an owner of a vacation apartment is required to make up for the loss of a traditional rental by buying a second property of at least equal size in the same district and offering it to a long-term renter.
The problem, say real estate professionals, is that such commercial designations are rarely issued and very pricey even if approved. Moreover, because housing in Paris is scarce, purchasing a second property of the same or greater size in the same neighborhood poses a gargantuan challenge. Some 800 short-term apartments conformed to the city’s legal guidelines each year according to the weekly Le Point—an indication that the vast majority of property owners are finding it far easier to flout the law than to follow it.
“It is impossible to comply with what they want, and therefore they have turned 40,000 people into criminals,” Adrian Leeds, a Paris-based property consultant told The Daily Beast. "They’ve forced a black market.”
Such “criminals” can comprise everyone from professional vacation rental agencies, to those who own a holiday pied-à-terre and rent it while they’re out of town, to foreigners who rent out future retirement properties to pay off the mortgage. Many others are ordinary Parisians looking to cash in the lucrative vacation rental market, wherein a weekly holiday property can generate up to four times as much money as a long-term rental.
Although a version of the current regulations has actually been on the books since 1948, it was never enforced. Not until 2005 during the administration of Mayor Bertrand Delanoë was the law resurrected, and enforcement was transferred from the police to City Hall.
According to Leeds, things took a turn for the worse in 2009 when a real estate insider looking to increase long-term bookings issued a news release on the illegal status of short-term apartments. Once word got out and the city got wind of it, both apartment owners and foreign tenants found themselves caught up in a crackdown reminiscent of a war-era drama, complete with subversive neighbors and sneaky civil servants who go to great lengths to sniff out unlawful rentals.
“They [city inspectors] follow tourists on the street and harass them,” said Leeds. “And neighbors love to denounce each other.”
Just ask Martha, a self-described “mature” American from Tennessee who rented an apartment for a month in 2013 on the fashionable Rue Vieille du Temple in The Marais. Martha, who didn’t want her last name used, had visited Paris before and was accustomed to renting apartments here. So she was bewildered to return home one day to find a mysterious letter taped to her front door.
“Renting furnished apartments in Paris on a daily or a weekly basis is strictly prohibited,” the letter read. “The condominium has started legal proceedings against the people who practice this illegal activity.”
The meddling neighbors didn’t stop there. For the next two days, Martha returned home to the same letter.
“Once there were two copies taped to the door,” she told The Daily Beast. “One at my eye level and the other a lot higher. Whoever left it wanted to make sure it was seen.”
Stricter laws introduced in 2014, which gave additional enforcement powers to city officials, have taken the drama to new heights. A BFMTV segment that aired on January 20, showing a city inspector’s attempts to nab illegal landlords, evokes the odd coupling of the television series “Cops” with a Gallic comedy of manners.
“Hello. I am an agent from the City Hall of Paris,” an inspector named Franck announces in faltering English into the intercom of a building in the chic 6th arrondissement. “Please, can you open the door?”
The British tourist refuses.
“I know it’s not your apartment, but you can’t open the door?” Franck presses.
After a compliant neighbor has buzzed Franck into the building, the interaction continues in the hallway.
“Do you know the name of the owner?” Franck asks the tourist through the tiny crack in the apartment’s front door.
“No, I am sorry, I don’t want to give any of that information.”
“Ok. Thank you. Bye,” Franck replies, telling the journalist in a grave tone, “Obviously it’s an apartment that has been turned into a tourist apartment.”
According to figures supplied by City Hall, this month’s door-to-door crackdown targeted more than 1,200 properties in the 1st and 6th arrondissements and identified 68 apartments suspected of operating illegally.
Once a property has been identified as an illegal rental, said Brossat, landlords are given several months to comply with the law by either offering an apartment as an annual, long-term rental, which is permitted for secondary residences, or obtaining the necessary permits. Apartment owners convicted of not complying face fines of up to €25,000 ($27,000).
Leeds herself received a visit from an inspector a few years back.
“I had a woman come into my personal apartment unannounced,” she said. “She told me she was aware of my two other apartments, and within two weeks I received a letter from the city.”
Leeds ended up selling the apartments, one of which she had planned to use as her retirement apartment.
“While I certainly don’t disagree with the city’s need to find housing, I don’t agree with their tactics,” she said.
Other agents concur.
“It’s disastrous, Carsten Sprotte, president of Paris Sharing, a short-term rental agency catering primarily to Anglophones, told The Daily Beast. “They think that they are going to free up apartments for Parisians to live in, but the foreign owners aren’t necessarily going to sell them. They are going to keep them as their second homes, so these apartments are standing empty anyway.”
“All this rental activity could be a source of tax income for the city,” he added.
It is too early to tell what impact if any, the city’s crackdown will have on the long-term housing market. It’s also difficult to know exactly how much pressure city officials are facing from the hotel industry, which has seen bookings decline in recent years.
In the village-like Montmartre neighborhood, which is the most popular locale for Paris Airbnb customers some hoteliers are cagey about the subject.
“I won’t talk about it, it’s too political,” the director of the two-star Comfort Hotel Place du Tertre, told The Daily Beast when asked his opinion on the city’s recent raids.
The receptionist was more forthcoming.
“It’s a good thing if they are going after people with multiple apartments who are trying to profit off of them,” Madina Sarsembayeva told The Daily Beast. “But not so much for someone with a small apartment who needs some extra money.”
She said she wasn’t concerned about Airbnb’s rapid growth, but acknowledged that the hotel industry needed to adapt to the new economy.
“Maybe they need to develop more incentives to attract tourists, like more flexible check-in and check-out times.”
Over at the four-star Terrass Hôtel the cheerful, young manager was happy to chat until I revealed the subject of the article.
“You need to talk with the accommodations director, and he is not in today,” he said.
The French press has reported that Airbnb’s recent addition of luxury properties to its offerings has high-end hotels nervous.
“The industry is suffering,” Didier le Calvez, CEO of Le Bristol told Les Echos last year.
In the meantime, several-dozen rental agencies have banded together to create the SPLM, an organization that lobbies for revisions to the current housing legislation.
Leeds has also launched a petition calling on the mayor to amend the current laws.
Prime Minister Manuel Valls has even entered the fray, commissioning a study (PDF) whose early findings indicate that a legitimate demand for short-term rentals exists in the French capital, and that such rentals lure investors.
In the meantime, City Hall is determined to continue its war on short-term rentals, with plans to hire additional agents and increase the frequency of the raids.
“We will be conducting such crackdown operations more frequently—one operation per month,” said Brossat.
Many Paris property owners seem to be taking their chances, however. Peruse Airbnb and other rental sites and you’ll encounter numerous listings that, under the current guidelines, are likely not legit.
Even Martha is undeterred by her experience with the harassing letters and has rented other short-term Paris apartments several times since.
“I didn’t go through an agency last time,” she said. “A nice Parisian man was renting his flat out. I don’t want to give his name, though.”