Regulating short-term rentals in the era of digital platforms: A comparison of European cities

The thesis examines the political responses and regulatory approaches adopted by major European tourist cities to address the expansion of short-term rentals (STRs). This sector has emerged informally, disrupting the tourist accommodation industry. The disruption has also occurred at the policy level, leading to regulatory vacuums and fractures. The lack of limitations on the phenomenon leads to several negative impacts on affordable housing, such as tourism-led gentrification and displacement processes. The urban consequences of the phenomenon have triggered a series of mobilizations that have influenced public debate and urban governance regarding the need to implement restrictions. In fact, while the governance of this phenomenon involves multiple levels of government, it is at the municipal level that the strongest demand and pressure for regulating STRs are emerging. In this context, city governments have developed a variety of regulations to manage this phenomenon. Regulatory objectives and stringency vary across selected cities, ranging from very liberal to highly restrictive. In this context, effective policymaking and enforcement remains a challenge for several reasons, including the multiple levels of government involved in the process, the lack of detailed data, and the scarce availability of digital platforms for collaboration. While there are studies in the literature that analyze the impact of Airbnb and how regulation responds to such impact, there are relatively few that focus on evaluating the effect and effectiveness of such regulation. This PhD research aims to fill this gap by critically evaluating different regulatory strategies, their effectiveness in mitigating the negative impacts of STRs, and the spatial effects of regulation given the uneven geography of supply across the city. The thesis adopts a mixed methods approach, composed of three interrelated studies that highlight the variety of regulatory objectives and the stringency of the case studies. The first study consists in a comparative analysis of 16 European major touristic cities that have implemented diverse regulatory measures to address the impacts of STRs. While more attention is given to urban contexts like those in the United States when evaluating the effects of short-term rental regulations, such analyses remain limited for European cases. Given the importance and impact of the Airbnb market in Europe's major tourist cities, where the common European legislation on STRs can be decisive in policy making, and the diverse attempts at regulation where the results are far from obvious and rather opaque, this study aims to shed light on this. By comparing restricted and unrestricted cities, the study shows that the former obtained a persistent reduction in the number of listings of entire apartments, in the ratio between entire apartments and private rooms, and in the number of professional hosts, but no significant impact on the spatial concentration of short-term rentals in the city. This research phase also provides evidence of the effects of the diverse regulatory strategies, and of the importance of obtaining the cooperation of booking platforms. Second study paper aims to examine the spatial effects of regulations in Barcelona and Paris, using a combination of statistical and spatial methods. STRs have grown unevenly in these cities, concentrating more near tourist attractions. Airbnb has penetrated more deeply into the residential fabric of the central neighborhoods of these cities, causing severe congestion. In this context, it is important to examine whether the restrictions adopted by the governments of the two cities have had any effect on the spatial decongestion of the phenomenon. While Barcelona implemented zonal restrictions aimed at redistributing supply, Paris implemented temporal restrictions. The findings show that Barcelona experiences a greater decongestion of short-term rentals in the city center than Paris. These effects are due to the Barcelona municipality's capacity to remove illegal activities concentrated in the city center, rather than to the mere zonal restrictions. The evidence from this study suggests lessons for other cities. In particular, the research indicates that it is not enough to adopt regulatory spatial approaches to decongest short-term rentals, but what makes the difference is the effectiveness of policy enforcement, highlighting that time restrictions are very challenging to inspect. Taking Lisbon as a case study, a city where 60 out of 100 dwellings in the oldest part of the city have an STR title and therefore are ‘legal’, the third study explores how regulation, and deliberated lack of enforcement, have created the conditions for the market to flourish. In this context, the main mechanisms by which STRs are regulated is through the creation of a registry. Far from been a measure to mitigate the impacts of STRs, the study demonstrates as this instrument has been useful to facilitate the sector. Research adopts an urban political economy perspective, combining the literatures on regulated deregulation and urban informalities, to understand how the state formalized STRs by providing legal security and freedom to operators while tolerating informal activities practices to allow the growth of the sector within the legal market. Additionally, it draws on authors who have studied the role of legislation and registration systems in providing legal certainty to informal markets. In this context, the study considered literatures on settler colonialism, where it was precisely registries that were invented. The thesis contributes to the issue of short-term rentals regulation by highlighting the diverse regulatory strategies employed by European cities in managing the disruptive effects of STRs. In this context, the effectiveness of regulatory interventions varies significantly depending on the design and enforcement of the policy, as well as the political will to restrict the sector. Research shows that cities that have adopted stricter regulations and invested significant resources in enforcement have had more effective results in mitigating the negative impacts of STRs. At the same time, what could have a real impact on the effectiveness of regulation is the restriction of existing supply. On the other hand, the research shows that regulation is not only aimed at limiting the market by introducing forms of regulated deregulation. The registration system in the absence of a licensing system, which is one of the main mechanisms by which short-term rentals (STRs) are regulated, is not aimed at curbing the negative effects of STRs, but rather at formalizing STR titles that, once released, are very difficult to withdraw. In this context, the 2024 European STR regulation gives EU countries two years to create a national and simple registration system, and, unsurprisingly, this policy has been celebrated by digital platforms like Airbnb. Finally, the results of this research confirm that it is not regulation per se that leads to a decrease in Airbnb supply. Restrictive regulation and strict enforcement are key to the effectiveness of restrictions. At the same time, the thesis shows how regulation can be a tool to formalize and stabilize this market, where its professionalization and spatial concentration are almost never fully reconfigured by the policies put in place.