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#EHHA: European Holiday Home Association submits official complaint to European Commission on rules 'stifling short-term rental sector'

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ehha_carlos-1Some of the most popular city destinations in Europe are stifling the ability of householders to rent out accommodation to travellers by imposing excessive and often contradictory regulations, according to a complaint submitted to the European Commission by the short-term rental industry. 

Examples of the restrictions range from outright bans, to effective bans via disproportionate requirements about the number of coat hangers in wardrobes, the quantity of cups and towels in bathrooms and the brightness of lightbulbs.

The complaint, lodged by industry body the European Holiday Home Association (EHHA), representing both property owners, renters and managers as well as short-term rental platforms, targets popular destinations including Berlin, Barcelona, Brussels and Paris for some of the most over-zealous rules and restrictions/bans which are not consistent with EU law. However, many other European destinations are also placing a disproportionate burden on people who simply want to rent out their accommodation.

The official complaint follows several months of informal dialogue with the European Commission.  The EHHA warns that Europe’s city authorities risk suffocating the short-term rental sector as well as imposing excessive legal liabilities on the platforms that connect hosts and renters. “The industry is the first to welcome sensible regulation for the short-term rental sector and collaborative economy,” said EHHA Secretary General Carlos Villaro Lassen (pictured). “However, in Europe the collaborative economy risks being crushed by a hotchpotch of excessive and contradictory regulation. While some of these rules may be well-intentioned and appropriate for large hotels, they are completely disproportionate for individuals who are simply renting out their accommodation for a few days. 

“The restrictions infringe the EU’s fundamental freedom to provide services across Europe and that is why we have decided to act and submit this complaint,” he added. 

In Barcelona, regulators have extended tourism regulations – originally designed to govern professional activity – and applied them directly to the collaborative economy without modification. Homeowners wishing to rent their property (they are prohibited from letting a single room) must comply with a long list of technical and quality requirements. Even minor infringements, such as failing to provide consumer complaint forms, can result in fines of up to €3,000. Serious infringements can lead to fines of up to €600,000. 

While in Barcelona permit-holders are limited to letting entire properties only, the reverse is true in Berlin. Berliners wishing to rent out more than 50% of their apartment must obtain special authorisation, which will only be granted if they can prove they have no other way to make ends meet, or in very special and almost impossible circumstances.

Non-compliance can result in a fine of up to €100,000.  In Brussels, private individuals with accommodation to rent face a colossal administrative process – exactly the same as if they were running a high-priced large business hotel. Requirements include providing a wardrobe with at least two hangers per guest; room lighting set at 100 lux; an electric sink light of 200 lux in the bathroom; and a cup or glass per guest and a guest towel. Fines for non-compliance range between €250 - €25,000. 

In Paris, owners wishing to rent a ‘pied-à-terre’ are required to make a ‘compensation’ to the city, an expensive and burdensome process which may include converting up to twice the area of commercial real estate into residential property of equivalent quality as the one being rented – in effect a ban on letting secondary residences.  Online platforms that market short-term rentals also face a host of excessive and contradictory regulations, coupled with heavy liabilities for non-compliance.

This is contrary to the EU’s E-Commerce Directive.  The short-term rental sector provides travellers with more choice, competitive prices and the chance of experiencing places in new and exciting ways. It also brings significant benefits to owners and tenants, including managing their costs of living and unleashing entrepreneurship. Local communities also benefit from increased tourism and consumer spend, driving growth, investment and employment. 

According to a Phocuswright study1, 45 million adult Europeans have stayed in short-term rental accommodation in the past two years and the industry in Europe produces an annual turnover of 80 billion euros. In Europe, private homeowners, rental managers, portals and listing sites provide a capacity of 20 million beds for tourists – twice the number of traditional hotel beds. The short-term rental sector is a key component of the Commission’s Digital Single Market project.

The restrictive municipal rules however affect the competitiveness of European tourism destinations and in particular their ability to attract new travellers that are looking for short-term rentals.  According to the European Commission’s guidance on the collaborative economy published last June: “rules applied to the collaborative economy need to be justified and proportionate and should aim to relieve operators from unnecessary regulatory burden.”

The guidance also points out that “a fragmented approach to the collaborative economy creates uncertainty for traditional operators, new services providers and consumers alike and may hamper innovation, job creation and growth”.  The EHHA complaint requests that the European Commission starts so-called EU Pilot discussions with relevant member states (Germany, Spain, Belgium and France) to bring the identified problematic local short-term rental regulations into line with EU law as a matter of urgency.

The EHHA complaint also underlines that some member states have failed to notify the European Commission of the excessive regulations imposed by municipal authorities, as they are obliged to do under EU law. Following this complaint, the EHHA will closely monitor future laws regulating the collaborative economy which include disproportional rules.  Villaro Lassen concludes: “The EU must intervene to put an end to the unnecessary patchwork of restrictive and contradictory municipal rules and red-tape. These only serve to strangle a vibrant part of the EU economy. The existing regulations hurt consumers, homeowners and renters and the wider tourism sector. They are also contrary to EU law and the Commission’s goal of creating a Digital Single Market.” 

The European Holiday Home Association

The European Holiday Home Association (EHHA) was founded in 2013 to give a voice to the short-term rental industry. The EHHA’s members range from associations representing private house owners to managers’ associations and digital platforms. Its members operate across the European Union countries. The core of the association is the distribution of short-term rentals in private houses and apartments.

Sharing Economy 

The Collaborative Economy (or Sharing Economy) refers to systems that enable access to goods, services, data and talent, without the need for ownership. These systems take a variety of forms but all leverage information technology and peer-to-peer communities. Last year the European Commission launched a public consultation on the Collaborative Economy which looked at the economic role of online platforms (search engines, social media, video sharing website, app stores, etc). The EU sees a clear potential in the Collaborative Economy in terms of innovation, growth and jobs.

EU

Amid France-Turkey row, UK calls on NATO allies to defend free speech

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Britain’s Foreign Secretary Dominic Raab called on NATO allies to stand shoulder-to-shoulder on values of tolerance and free speech, in a veiled rebuke to Turkey which has been calling for a boycott of French goods, writes Estelle Shirbon.

Turkish President Tayyip Erdogan has urged Turks to stop buying French goods and has accused France of pursuing an anti-Islam agenda. Britain, France and Turkey are all NATO members.

Erdogan is one of several leaders in the Muslim world angry with France over its response to the murder of teacher Samuel Paty, who showed pupils cartoons of the Prophet Mohammad as part of a lesson on free speech.

“The UK stands in solidarity with France and the French people in the wake of the appalling murder of Samuel Paty,” Raab said in a statement. “Terrorism can never and should never be justified.

“NATO allies and the wider international community must stand shoulder-to-shoulder on the fundamental values of tolerance and free speech, and we should never give terrorists the gift of dividing us.”

Paty, a teacher at a state-run school in the far outskirts of Paris, was beheaded on 16 October by a man of Chechen origin. The teacher had been criticised by some in the local community for showing his pupils the cartoons because Muslims view images of the prophet as blasphemous.

The French government, backed by large numbers of citizens, saw the beheading as an attack on free speech and said they would defend the right to display the cartoons.

President Emmanuel Macron called Paty a hero and pledged to fight what he described as Islamic separatism, saying it was threatening to take over some Muslim communities in France.

The reaction to Paty’s murder has caused widespread anger in Muslim countries, where there have been anti-French demonstrations and calls for boycott. France has warned its citizens in several Muslim-majority countries to take extra security precautions.

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EU

Customs Union: Commission proposes new ‘Single Window' to modernize and streamline customs controls, facilitate trade and improve co-operation

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The European Commission has proposed a new initiative that will make it easier for different authorities involved in goods clearance to exchange electronic information submitted by traders, who will be able to submit the information required for import or export of goods only once. The so-called 'EU Single Window Environment for Customs' aims to enhance co-operation and co-ordination between different authorities, in order to facilitate the automatic verification of non-customs formalities for goods entering or leaving the EU.

The Single Window aims to digitalize and streamline processes, so that businesses will ultimately no longer have to submit documents to several authorities through different portals. The proposal is the first concrete deliverable of the recently adopted Action Plan on taking the Customs Union to the next level.

It launches an ambitious project to modernize border controls over the coming decade, in order to facilitate trade, improve safety and compliance checks, and reduce the administrative burden for companies. Economy Comissioner Paolo Gentiloni said: “Digitalization, globalization and the changing nature of trade present both risks and opportunities when it comes to goods crossing the EU's borders.

"To rise to these challenges, customs and other competent authorities must act as one, with a more holistic approach to the many checks and procedures needed for smooth and safe trade. Today's proposal is the first step towards a fully paperless and integrated customs environment and better cooperation between all authorities at our external borders. I urge all member states to play their part in making it a true success story.”

The proposal, the press release, the Q&A and the factsheet are available online.

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coronavirus

Merkel plans circuit-break lockdown as German virus cases surge

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Chancellor Angela Merkel pressed regional leaders on Wednesday (28 October) to agree to a partial lockdown in Germany which would see restaurants and bars closed but keep schools open, a draft document seen by Reuters said, write and

The drastic measures, to take effect from 4 November, are aimed at curbing the spread of the coronavirus in Europe’s biggest economy as the number of new cases hit a record high.

Under the planned new restrictions people would only be able to go out with members of their own and one other household. Fitness studios, discos and cinemas would close, as would theatres, opera houses and concert venues.

Restaurants would only be allowed to offer takeaways, the document said. Shops could remain open if they implement hygiene measures and limit customer numbers.

Merkel will hold a virtual conference with the country’s 16 state premiers later to try to agree the nationwide rules and ditch a confusing patchwork of regional measures.

Almost all regions of Germany face an exponential increase in infection rates, said the document to be discussed, and local health authorities can no longer trace all infections.

“The aim is to interrupt the dynamic of the infection fast so no far-reaching limits on personal contact and economic activity are needed over the Christmas period,” it said.

Germany was widely praised for keeping infection and death rates below those of many of its neighbours in the first phase of the crisis but is now in the midst of a second wave. Cases rose by 14,964 to 464,239 in the last 24 hours, the Robert Koch institute for infectious diseases said on Wednesday.

Deaths jumped by 85 to 10,183, fuelling fears about the health system after Merkel warned on Tuesday it could hit breaking point if infections continue to spiral.

“If we wait until intensive care is full, it is too late,” Health Minister Jens Spahn, who last week tested positive for the virus, told broadcaster SWR.

The government has long insisted it wants to avoid a second blanket lockdown after an initial one this year hit economic growth, with the economy shrinking by a record 9.7% in the second quarter.

While economists expect a rebound for the July-Sept period, they warn that a further lockdown could wipe out growth in the last quarter. Third quarter data is due on 30 October.

Under the plans, the government aims to provide aid to firms hit by closures, including the cultural event sectors.

Only necessary overnight stays would be allowed, according to the document. Brothels, swimming pools, beauty and tattoo studios would close but physiotherapists and hairdressers could stay open. The steps would run until the end of November but are subject to review.

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