There Are 17,000 Illegal Tourist Apartments In Madrid

26 April 2017 – Expansión

In just a year, the number of tourist apartments has increased by 100% in the Spanish capital. Of the 20,000 that currently exist in the Community of Madrid, only 3,000 have been registered. Hoteliers are asking for an urgent decree to be passed. 

“For a year and a half, we have been hearing that the Community of Madrid is going to publish a new decree to regulate the supply of tourist accommodation, but nothing. To open a hotel, one needs to comply with 400 rules, we have counted them; meanwhile, tourist apartments are not subject to any legislation. Unfair competition is harming every hotel in Madrid”. That is according to Madrid’s Association of Hotel Businesses, which is alarmed by the boom of tourist accommodation in the city.

According to the latest report from Exceltur, the alliance for tourist excellence, the supply of this type of tourist home has risen from 10,000 (37,000 beds) in 2015 to 20,000 (74,000 beds) in 2016, which represents an increase of 100%. Of the 20,000 beds, only 3,000 are actually registered, according to the Community of Madrid’s decree dated 2014, which governs tourist activity. (…).

To understand the severity of the problem, which has led to a 20% increase in rental prices in the city centre in a short space of time, causing gentrification, the expulsion of residents who have lived there for their entire lives, the Association presents another fact: Madrid’s hotels offer 80,000 beds in total, just 6,000 more than offered by the tourist accommodation establishments.

“We want to participate in the modification of the current decree, we don’t want to receive it a day before it is approved, but rather we want to work with the authorities to make the legislation correct and effective for both hoteliers and residents”, said Mar de Miguel, President of the Association. She added that these accommodation alternatives, besides not complying with the majority of the rules in terms of security or quality, are not subject to the urban development plan and do not pay the corresponding taxes, which is leading to tax fraud of €800 million per year. (…).

The Community of Madrid plans to legalise the market although it is very aware of the handicap that it faces. “The problem is that there is no legal precedent in Europe due to the mixing of jurisdictions and the reality of the fact that the activity is being performed in individuals’ homes, which significantly limits the capacity to exert control over it”, explained Carlos Chaguaceda, the region’s Director of Tourism. Homes let to tourists are therefore not regarded as businesses by law, and so “the Administration is unable to intervene in an agreement reached between two parties to rent a home”, said the Director of Tourism. (…).

The regional government proposes the creation of a register for these tourist apartments, where the owner legally acknowledges his/her activity. “Ideally, we would have the capacity to act against any platforms that advertise these properties online (without the corresponding permissions). For example, if a property does not have a registration number, it may not be advertised on any website”, suggested the Director of Tourism. (…).

Meanwhile, the Town Hall of Madrid considers that the Spanish capital is a long way from the problems that hoteliers are facing in Barcelona and Paris, given that the average number of beds per 1,000 inhabitants is 2.7 in the Spanish capital compared with 8 in the Catalan capital, but even so it wants to minimise the “risks of saturation” that is starting to exist in certain neighbourhoods, such as Cortes. (…).

The Town Hall is also looking to sign “memorandums of understanding containing certain commitments with Homeaway and Airbnb” (…).

Original story: Expansión (by R. Bécares and L. F. Durán)

Translation: Carmel Drake

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