Berlin squeezes Airbnb on short-term apartment rentals

Tourists who use the peer-to-peer apartment service and others like it will find their Berlin options limited on Jan. 1, when the city implements a new law that it hopes will reduce residential apartment rents.

The view from Katrin’s Berlin apartment reveals some of the city’s most iconic monuments: the chariot-topped Brandenburg Gate, the Holocaust Memorial, and the Reichstag.

All are flocked to every year by a growing number of tourists – including the many, mostly international guests who stay in her spare room, having booked it via peer-to-peer vacation rental website Airbnb. It’s “a way to expand cultural horizons,” she says, as well as a way to earn extra income – including when she goes on holiday herself and rents out her entire space.

But a new Berlin housing ordinance could prevent Katrin (who asked that her last name not be used) and other hosts from offering their apartments to city visitors for short-term stays, which officials say is driving up Berlin’s famously low real-estate prices to the detriment of long-term residents.

Rental rates the German capital have been skyrocketing. Between October 2012 and October 2013, they increased by 8.3 percent, according to German real estate website ImmobilienScout24. Countrywide, they rose 3.6 percent.

The new ordinance, scheduled to take effect Jan. 1, will require residents to apply for a permit to rent out housing or face a steep fine. The restriction will cut down on the number of peer-to-peer rentals of apartments, say supporters in Berlin’s city senate, and phase around 12,000 apartments back into Berlin's residential rental market in the next two years.

But critics of the new law and advocates of peer-to-peer rentals say that these measures will hurt Berlin's booming tourism industry. At the same time that housing prices have been rising, tourism in Berlin spiked by 9.2 percent between August 2012 and August 2013, according to figures from the city’s official tourism bureau. In October, Berlin saw 1.1 million visitors, its highest number ever.

Instead of reducing peer-to-peer tourist rentals, Berlin needs to use the money it receives from the Federal State to construct more affordable housing and apply rent control more intensively, argues Peter Vida, head of legal affairs at a Berlin-based housing website Wimdu.

“The legislation is taking opportunities away from people who want a unique experience,” said Mr. Vida. Along with two other short-term rental websites, 9Flats and HouseTrip, Wimdu formed a lobby group advocating against the law.

Tourists using housing websites are a critical asset to Berlin's economy, says Airbnb spokesman Nick Papas, deflecting concerns common in cities like Paris and New York that tourists would push out local residents. These visitors help bolster local business, he adds, particularly outside of the city center.

Mr. Papas points out that about 77 percent of Airbnb users in Berlin stay outside of the main hotel areas and spend twice as much time in Berlin as hotel-goers. The website's users generated $130 million for the city over a one-year period.

It’s inevitable that Berlin’s rising popularity would also affect housing prices, says Katrin. Long reputed as a “poor but sexy” Bohemian mecca for artists lacking full-time employment, Berlin has enjoyed rental costs only a third (per square meter) of those in other large German cities such as Hamburg and Munich. But Berlin continues to see an influx of trendy shops, hotels, and start-up ventures. Many are in its Mitte and Prenzlauer Berg neighborhoods, both in the city’s eastern part.

“Berlin was an extraordinarily affordable place for the past 10 years,” says Katrin. “But everyone knew that wouldn’t always be the case.”

[Editor's note: The original version incorrectly used Katrin's full name.]