Spain’s CNMC Takes Madrid, Bilbao & San Sebastián to Court Over Anti-Airbnb Legislation

7 August 2018 – El País

The competition authorities are cracking down on the attempt by some of Spain’s large Town Halls to regulate the boom in tourist apartments, created by Airbnb and its competitors, which many blame for contributing to an increase in residential rental prices and the expulsion of the most underprivileged from the centre of Spain’s cities. The National Markets and Competition Commission (CNMC) announced on Tuesday that it is going to challenge the urban planning rules approved recently in Madrid, Bilbao and San Sebastián on the basis that they violate “competition” and harm consumers and users. Other rules, not yet in force, in Barcelona and Valencia, could also be targetted by the CNMC, warn sources at the agency.

Imposing a compulsory licence on those who rent their homes to tourists. Limiting the types of properties that may be leased for short periods. They are some of the measures introduced by the Town Halls that the CNMC is now challenging. And the battle doesn’t stop there. New rules that other cities decide to approve may also clash with the opinion of the market regulator, which is now sending the cases of Madrid, Bilbao and San Sebastián to the High Court of their respective autonomous regions. They will have to decide whether to admit the appeals and overturn, in part or in whole, the municipal regulations.

The body chaired by José María Marín Quemada said that it has sent a request to the three municipalities to provide explanations regarding the “need and proportionality” of the restrictions or, failing that, for those restrictions to be annulled. In the absence of a satisfactory response, the CNMC will resort to the courts through a contentious-administrative appeal. The informal talks held so far have made very clear the gulf that separates the independent body from the Town Halls.

In its note, the CNMC details the different regulations that are, in its opinion, deserving of appeal for being measures with “restrictive effects on competition”. Madrid requires a licence for the rental of tourist apartments and homes. The municipality also establishes a period of one year, extendable for one more, before new licences can be granted in areas such as the Centro district. According to the recently approved legislation, the rental of tourist apartments that do not have an independent entrance will be prohibited, which represents 95% of the homes in the city centre.

In both Bilbao and San Sebastián, the regulations limit tourist apartments to ground and first floors only, unless they have independent access from the street. In Bilbao, moreover, tourist apartments need to be authorised and registered; and in San Sebastián new tourist apartments are prohibited in certain parts of the centre.

Higher prices

The Competition authority believes that, with their decisions, the municipal teams in Madrid, Bilbao and San Sebastián “are impeding the entry of new operators and consolidating the position of the existing suppliers of tourist accommodation”. The body has announced that these measures will lead to “higher prices in terms of tourist accommodation” and lower quality, investment and innovation in tourist accommodation in those three cities (…).

The affected municipalities reacted quickly, stating that they will defend their regulations in the courts. The Town Hall of Madrid, governed by Manuela Carmena (Ahora Madrid) said that it wants to combine the defence of tourism with the rights of “citizens in our neighbourhoods”, according to Julio Núñez. “Our objective is introduce regulation that protects the residential use of land and favours competition in a sector where hostels and hotels already operate”, add sources at the Urban Planning Department (…).

Original story: El País (by Luis Doncel)

Translation: Carmel Drake

Carmena to Outlaw 95% of Madrid’s Tourist Apartments

27 July 2018 – Expansión

The days are numbered for tourist apartments in the centre of Madrid. Yesterday, the Town Hall of Madrid gave the green light to legislation that will put a limit on holiday rentals: 90 days or three months, is the maximum term that a person may rent their home for those purposes. From day 91 onwards, owners will need to have a commercial lodging licence, just like hotels.

Yesterday, the Spanish capital’s Governing Body approved the Special Plan for the Regulation of the Use of Lodgings, which will apply to the city’s most central neighbourhoods. The plan is expected to enter into force at the beginning of 2019, after being approved by the plenary session in October.

The Town Hall led by the mayor Manuela Carmena is also going to prohibit the operation of all homes destined to tourist rental that do not have an independent entrance, like in the case of hotels. According to the Town Hall, with that requirement, “95% of homes that operate as tourist apartments will no longer be able to do so”.

“Specifically, the affected radius will span 52.7 km, distributed in three concentric rings, depending on the massification of the ads. According to the Town Hall, in the rest of the municipality, “the existing legislation will be maintained”. Madrid is, in fact, the European capital where the number of adverts on these platforms has grown by the most, up by 67% in 2017 with respect to 2016, according to a report from Colliers International.

With this legislation, Madrid’s Town Hall is opening a new chapter in the fight between public administrations and tourist apartments. Its intention is to outlaw almost all of the tourist apartments that are advertised on platforms such as Airbnb in the centre of the city.

The prohibition is tacit. The trick is that 95% of the homes advertised on these platforms in the capital do not have an independent entrance. That limitation will only exist in the case of homes that are leased for more than three months. The 90-day limit draws a line between what is considered a home for tourist use and a property in the collaborative economy.

Obtaining a licence is not going to be easy. It will be subject to zoning, following in the footsteps of cities such as Barcelona. Once the Special Plan comes into force, it will not be possible to change the use of a home located within the inner two rings from residential to tertiary, given that those properties account for the majority of the regulated and unregulated tourist supply. Together with this new plan, the Town Hall has approved a moratorium that prohibits the granting of tourist licences of any kind for one year.

Putting a cap on rents

The objective of the plan is to preserve residential use in the central areas of the city that, with the tourist boom and rise of online platforms, are seeing rising rental prices.

In this vein, the Town Hall wants to establish maximum rental prices. To that end, and as it already did in the case of the request for the tourist tax, the delegate for Sustainable Urban Development, José Manuel Calvo, yesterday asked Sanchez’s Governments for the necessary powers.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake