In the ‘HOTREC Position Paper on Eu-Wide Regulation of Short-term Rentals’, we looked over years of regulatory debate and policy responses to growing challenges across Europe’s cities and, more recently, rural areas. It was the most important milestone of our partnership with HOTREC since 2015. For all these years, we have been empowering HOTREC’s 46 member associations from 35 European countries in their own efforts to help public authorities assess and deal with the impact of STR services on the quality of life and cost of living for local communities. Here we share some insights from the position paper in relation to positive steps identified in the Commission’s proposal that was announced on the 7th of November, making the most of our in-depth primary and secondary research including:
- Interviews with eight policy-makers and experts on STR regulations
- Review of STR regulations from more than 20 countries and cities
- A thorough timeline of market updates, policy initiatives and legislative work for STR services over an eight-year period, 2014-2021) (see the image below)
- Lessons on how and why the enforcement of STR regulations has worked well (or not) for destination authorities both before and after the pandemic.
Here we share the five key lessons from the Enforcement of STR Regulations in Europe and North America in relation to the tools provided by the Commission’s proposal to regulate the STR sector:
Neither local governments nor national-regional governments have managed to enforce STR regulations on their own - instead, broad-based cooperation is required: Poor law enforcement is often the result of national and regional governments not working closely enough with local governments (e.g., due to the lack of a legal framework at the local/province level or due to ideological differences between the parties that control different tiers of government). Defining mandatory provisions for any registration procedure of STR services established by a Member State (Article 4), the Commission’s proposal provides public authorities with a roadmap for creating registration systems or adapting existing systems at the national/local level.
Easily accessible and instructive registration schemes can help destination authorities implement fair and enforceable regulations for STR services: Our research showed the destination authorities are well aware of the need to invest in digital tools (e.g., in order to integrate required steps for mandatory registration into an online application system) and set clear conditions for compliance with the law. The Commission’s response to this evidence specifies a proportionate set of information to be provided by hosts upon online registration (Article 5) along with conditions for host (Article 6) and platform compliance (Article 7) as well as penalties for non-compliance (Article 15).
Thresholds of rental days are likely to remain unenforceable unless data-sharing solutions are adopted by destination authorities and the full range of STR platforms: We expect this to remain one one of the most highly debated measures in the field of STR regulations. Under the Commission’s proposal, national and local authorities retain the power to design STR regulations to deal, for instance, with health and safety, urban planning and security issues. In the future, public authorities will be expected to better assess the situation on the ground and make more targeted and proportionate rules to mitigate the negative impacts of STR services through data collected on the basis of the Commission's proposal.
STR platforms have considerable experience in buying time for their benefit as long as data disclosure is merely an option rather than an obligation: The Commission’s proposal has a clear goal to target any further effort by online platforms to escape scrutiny and data-sharing by defining registration procedures for data reporting (Article 8), obligation on online platforms to transmit activity data and registration number (Article 9) and the establishment and functionalities of Single Digital Entry Points by Member States for the receipt and forwarding of respective data (Article 10)
Knowledge of market failures, stakeholder agendas and enforcement gaps is essential for ensuring the enforcement of STR regulations: As previously mentioned, national and local authorities retain the power to design STR regulations to deal with a wide range of issues. Naturally, they will also continue to have a great interest in consulting with a wide range of stakeholders. Although the Commission’s proposal specifies that the new rules will be subject to evaluation and review in no later than five years after the date of their application (Article 18), we believe that destination authorities are required to encourage stakeholder engagement as a means to enhance their capacity to enforce the law.
In short, the Commission’s proposal provides a common EU framework for registration and data sharing to support destination authorities in moving forward from a fragmented regulatory landscape to future-proof the wellbeing of destinations and local communities.
