France, the world’s second-largest market for Airbnb, has introduced new regulations targeting short-term rentals. This move comes amid rising concerns about housing shortages, over-tourism, and the platform’s impact on local communities. The law, which some have dubbed the “anti-Airbnb law,” marks a significant shift in how short-term rentals will operate in France. For vacation rental managers worldwide, understanding these changes is essential, as they could signal broader trends affecting the industry.
1. Why Is France Cracking Down?
Several factors have driven France to adopt stricter short-term rental rules:
- Hostility Toward Airbnb: Critics argue that Airbnb and similar platforms contribute to housing shortages, especially in cities like Paris, Lyon, and Nice. Many locals believe that residential apartments are being converted into tourist accommodations, driving up rents and reducing availability for long-term tenants.
- Housing Shortage: France faces a housing crisis, particularly in urban areas. Short-term rentals are seen as prioritizing tourists over residents, exacerbating an already dire situation.
- Political and Economic Factors: The French government is addressing its budget deficit by cutting tax benefits for hosts, while also making a political statement. By cracking down on Airbnb, leaders aim to show they are prioritizing local housing over corporate interests—a move with strong populist appeal.
2. Key Measures in the New Law (Explained Simply)
The new regulations impose tighter controls on short-term rentals. Here’s a breakdown of the most important changes, along with their broader context:
a. Reduced Tax Benefits
- What’s Changing?
- Tax deductions for unclassified rentals have been slashed from 50% to 30%, with a cap on annual revenue set at €15,000.
- For classified rentals, deductions drop from 71% to 50%, with a reduced cap of €77,700.
- Why It Matters:
- Previously, these tax breaks made hosting on platforms like Airbnb highly profitable. By reducing them, the government is making short-term rentals less attractive, especially for casual hosts who depended on these benefits.
b. Shorter Rental Limits
- The New Rule:
- Primary residences can now only be rented out for 90 days per year, down from 120 days.
- The Goal:
- This limit is designed to ensure that residential properties are used for long-term housing rather than being turned into tourist accommodations.
c. Energy Efficiency Requirements (DPE)
- What Is a DPE?
- The “Diagnostic de Performance Énergétique” is an energy efficiency rating for homes in France. Properties are graded from A (most efficient) to G (least efficient).
- Why It Matters:
- Starting in 2025, properties with a G rating cannot be rented out, with stricter bans coming for F-rated (2028) and E-rated (2034) homes. Owners will need to invest in costly renovations to remain in the market.
d. Localized Restrictions
- Municipalities can now designate specific areas where short-term rentals are restricted to primary residences or impose quotas on the number of vacation rentals allowed in a neighborhood.
e. National Registration System
- A centralized online registry will track all short-term rental listings, making it easier for authorities to enforce compliance and monitor activity.
3. Implications for Vacation Rental Managers
For those managing short-term rentals in France—or considering entering the market—these changes bring both challenges and opportunities:
a. Compliance Burden
- Property managers must navigate a more complex regulatory landscape, ensuring that properties meet the new requirements for registration, rental limits, and energy efficiency.
b. Shrinking Inventory
- The stricter rules may drive many small-scale hosts out of the market, reducing the pool of properties available for management.
c. Diversification Opportunities
- Managers can adapt by expanding into long-term rental management, offering energy compliance services, or focusing on high-end properties less impacted by these rules.
d. Increased Demand for Expertise
- Property owners will increasingly rely on professional managers to handle compliance and maximize profitability under the new framework.
4. Broader Market Impact
The new law is expected to reshape the short-term rental landscape in France:
- Reduced Supply:
- Fewer listings will be available, particularly in urban centers, potentially driving up prices for tourists.
- Shift to Premium Rentals:
- Wealthier owners with the resources to meet compliance requirements may dominate the market, shifting the focus to high-end accommodations.
- Increased Long-Term Rentals:
- Property owners unable or unwilling to comply with the new rules may pivot to long-term leases, alleviating some pressure on the housing market.
5. Potential Conflict with EU Regulations
France’s approach could clash with the European Union’s vision for harmonized short-term rental rules:
- EU’s Harmonization Goals:
- The EU has proposed a unified framework, including a common registration system, to ensure transparency and fairness across member states.
- France’s Stricter Local Rules:
- By empowering municipalities to impose localized restrictions and quotas, France risks creating a fragmented regulatory environment that complicates cross-border operations.
- The Barcelona Precedent:
- Similar tensions arose when Barcelona banned short-term rentals for entire homes, sparking debate over whether such measures violate the EU’s principles of free movement and fair competition.
Conclusion
France’s new anti-Airbnb law is a game-changer for the short-term rental industry, not just within the country but globally. As one of Airbnb’s largest markets, the changes here could set a precedent for other nations grappling with housing shortages and over-tourism.
For vacation rental managers, the key to navigating this new landscape lies in adaptability. Whether it’s helping clients comply with stricter rules, diversifying services, or focusing on premium markets, those who stay ahead of the curve will find opportunities in the challenges. At the same time, the broader industry must watch closely as France’s bold approach tests the limits of EU harmonization and the future of short-term rentals in Europe.
