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2018 Statistics are in for Fines to Air BnB Owners Flouting the Law in Paris

Le Figaro yesterday published an article detailing how many fines were imposed on apartment owners in Paris who flouted the laws on how often you can rent your principal residence via apartment-sharing platforms and requiring the 13-digit registration number.

According to the article, there are 100,000 apartments on offer via AirBnB-like listing services in Paris, of which 65,000 of them are on AirBnB itself.

The tribunals fined apartment owners a total of €2.1 million euros in 2018 (compared to 1.3 € million in 2017).

156 apartments were the subject of lawsuits; of those, 118 were judged illegal. One apartment owner had to pay €10,000 for each of his six apartments in the 5th arrondissment.

There are some new fines envisioned in an update to the law. Now, owners who advertise their apartments without the required 13-digit number can be fined up to €5000 for that. (The article says that so far, only 13,000 of the 100,000 apartments on offer list their required registration number.)

And finally, not only apartment owners, but now the platforms themselves, are subject to fines. Platforms that refuse to eliminate illegal listings can be fined up to €50,000 for each non-compliant residence.

To me, all of this indicates two different things:
1) these measures will indeed incite some owners to pay closer attention to the law.
2) this is a very small drop in the bucket compared to the number of listings that exist.

Posted by
1086 posts

1) these measures will indeed incite some owners to pay closer attention to the law.

2) this is a very small drop in the bucket compared to the number of listings that exist.

I agree with your conclusion but consider the trend. Two years ago there were 5 city inspectors to follow up on short term rental violations. There are now 25 and growing.

Judges have been issuing steeper fines as the issue becomes better-known. Overall fines have quadrupled in under 3 years.

The landscape is changing and the ability to fine on line platforms as well as property owners for listings which do not contain the city required, 13 digit registration number probably means that fines will continue to grow.

Paris has a mayor very intent on preserving as much housing as she can for those who actually live in the city.

Posted by
10847 posts

I am glad to see they are enforcing the law. That takes a lot of pressure off those that obey the law.

It's also a good cultural study in value systems. I find watching this sort of thing fascinating.

Posted by
2229 posts

Thanks Kim, very interesting indeed. And James, while I share your interest in watching as this whole reset evolves, I have to ask you, do you mean to say "socialist" or social? I see it as the government exerting and cultivating the social need; the social interest.

Posted by
10847 posts

Dave, if they are regulating for the purpose of providing cheaper housing, then they are taking value from one group (owners) and redistributing that value to another group (renters). Remember, if there are winners, then there is an equal component of losers.

Posted by
1086 posts

then they are taking value from one group (owners) and redistributing that value to another group (renters).

Exactly, rent control. Like they do in California, New York, New Jersey, Maryland, the District of Columbia, and other Marxist countries.

Posted by
10847 posts

I didn't realize NY was a country. Texas, yes, but NY?

Best of all, I respect that they enact the will of the people and then enforce the law. A democracy functioning as it should and something to be respected.

Posted by
2229 posts

Well, they've added regulation, but have not and are not giving actual property or money to renters, so I would take issue with that whole thing, and no, California is not run as a Marxist society, and of course is not a country. A lot of real estate investors in this case have speculated that there is/was money to be made, it got a bit out of hand, and government stepped in and regulated that business model. No Robin Hood here. It's good maintenance of the social fabric of the city, but socialism it ain't.

"Best of all, I respect that they enact the will of the people and then enforce the law. A democracy functioning as it should and something to be respected."
Totally agree.

Thanks

Posted by
10847 posts

When a government removes value from a persons possessions so as to lower the cost for a third party to use that possession, then it is a socialist act. Think of your house, if it is paid off, as a bank savings account. The value of that account is established by its economic highest and best use. So, if a person has a home worth $2 on Monday but only $1 on Tuesday because the government has restricted its highest and best use, then the government has withdrawn $1 from the account. That $1 allows the renter to purchase rights to the house for a lesser cost than the market value. That is a transfer of wealth. People tend to think that the only person being affected by this are rich robber barons. It affects every home owner, including those who were banking on their home to finance a better quality of retirement. For them it can be like someone with a 401(k) seeing the market go down 20% one day.

Don't get me wrong. I am not saying I agree with it or disagree with it, I just call it what it is. Its their society not mine. And, I just don't know enough about all the details of who owns what, and under what circumstances, etc., to even form an opinion. I do believe that it isn't a concept that works particularly well in general practice. At times that rent controlled property in the US ends up being nothing more than a slum because the rent controls have reduced the value of the property to the point it isn't worth maintaining properly. And, I am sure there are instances when it has worked out okay.

The fact that the law is being enforced speak well of the will behind the law .... or possibly the government sees the violators as another income stream.... who knows...

Posted by
2229 posts

"That $1 allows the renter to purchase rights to the house for a lesser cost than the market value."

With respect, James, I don't think that is so. Laws affect values, the market value assumes everyone is following the law, even the new laws. A financial bubble, one that everyone saw getting bigger, has been burst, and it just isn't so tragic that we now have to say France is a Socialist country, imho. It's been six years now since I was informed by a Paris apartment owner that neighbors in their building were revolting over the short term rental thing, and that they would not be able to rent to us after all-they returned our deposit, thankfully. Everyone knew the situation was untenable, an option would be no regulation, like before, and we saw what the free market did with that-it drove citizens out past the Periphique.

Thanks for the convo, we'd better wrap this up before someone notices ;-)

(Edited spelling)

Posted by
4218 posts

Interesting discussion, guys, and thanks to Kim for the update. Bottom line is that the 13-digit thing is real and we rent at our peril if we don't see it on the listing. Putting the online sites on the hook will be very effective, I think. And Paris can use the revenue to improve housing and/or fix the damage the gilets jaunes have been doing.

This is what chexbres was warning about (over and over) the last couple of years. Anyone know what's become of him or her?

Posted by
23592 posts

remember that James has a horse in this race.

Posted by
10847 posts

Dave, laws may impact a value, but this law is specifically designed to prevent or drive down value for the express benefit of a third party. That's a bit different. But in general I am not even opposed to it. Some places it may make perfect sense, some places regulating like this may do more harm than good. But thats all subjective and relative to the values of the community in which they exist. From the point of view of an owner in a country in which I am not a citizen; I went into that with the opinion that as a guest I would be at their mercy. Its all good.

Oh, and France is a socialist country. Okay, lets say as much socialist in nature as it is capitalist. Outside of Soviet Communism (maybe) no government that I am aware of is ALL one thing or another; but enacts legislation that represents a socialist or a capitalist agenda or point of view. US Social Security is socialist in nature, and I think its a good thing.

And that's not necessarily bad for the French. Up to them to make that decision and be happy with it. There is on "one world" view on such things. Each to their own. I respect a country more for the stability and fairness of their processes than for the outcome of those processes.

Posted by
633 posts

With apologies as this is one of the more civil discussions involving political topics, I'm going to have to nuke the whole thread if there's any more talk of socialism. We understand the relation to the topic, but it's not the topic. Thank you kindly for your understanding.

Posted by
7693 posts

Thank you Webmaster. I appreciate Kim's update very much and was sorry to see the turn to a political discussion.

Posted by
10847 posts

Understood Mr. Webmaster. And you were correct in that it was a very nice and very civil exchange of ideas. Speaks very well for the RS people. Dave (above) is the sort of guy I bet i would enjoy having a beer with. I love being challenged. One of the great experiences of travel, for me at least, is to observe the culture and see first hand that every culture is unique, requiring unique solutions. There is just so much to example to learn from. The RS people, it is my impression, are a bit above arguing who has the prettiest churches.

This guy said it better than I ever could, and we should all strive to be jesters of our home community:
https://www.ricksteves.com/about-rick/social-activism-philanthropy/how-to-travel-as-a-political-act

And yes, it was sort of a runaway topic on this thread unless you consider the words in the link above to be some overarching umbrella for the site as a whole. Might make an interesting stand alone thread. Remember the travel ethics thread went well (but cost me some popcorn).

Posted by
7693 posts

Back to the topic....I am interested in how the apartment rental situation is playing out.

Posted by
10847 posts

The European city where I own my property has a good way of dealing with it. Foreign nationals are restricted to one property in most city districts and essentially none in a couple. I say essentially because the restrictions and the costs are so high it's just not profitable. Seems to be working out okay. My building is maybe 10% short term rentals, 50% Tennant owned (mostly retired folks who inherited the properties from the failed communist state) with the rest being long term rentals. A good mix for everyone. The long and short term rental owners subsidize the building repairs and upkeep and that improves things for the older tenant owners.

Posted by
1086 posts

There is no restriction in France on who may purchase property. Anyone may purchase an apartment in Paris though non-resident owners (French or otherwise) may pay higher real estate taxes.

The restrictions are for purposes other than those of primary residency.

Posted by
10847 posts

In Budapest Most of the building associations charge retail establishments at a higher rate. The income from that practice has done more to revitalize neighborhoods than most any other activity. It's all about balance.

Posted by
10265 posts

It might help if someone on this thread clarified how this affects US and Canadian travelers to Paris.
I mean, I think I get it, but perhaps a clear statement of how we are affected would be helpful to others.

Posted by
4218 posts

I'll try to respond to Kent's very reasonable request, others may do better. The risk in renting a place without the 13-digit number is that you may arrive, after paying a deposit, and find that you can't get in because the authorities have discovered that the owner is renting the place illegally and the owner has stopped doing it. You may or may not be able to get back whatever you've paid, but it will be a hassle and you'll have the immediate problem of finding last-minute accommodations. Right now that may look like a small risk but it also looks like an increasing one, and the stakes for any given traveler are pretty high. What they call "low probability / high consequences."

Less of a "risk" to individual travelers, but still affecting us, is the potential that airbnb, VRBO, and the other online sites will limit their offerings to those with the registration numbers, now that they're on the hook too. That would greatly reduce the supply of units and presumably raise the prices. Having enjoyed my stays in several Paris rentals I'd be sorry to see this happen, though I completely understand the problem Paris authorities are trying to address. It would be good for the hotel industry and the people it employs.

Please correct me (diplomatically and without political references?) if I misunderstand this.

Posted by
10847 posts

Dick, impossible to guess with out some understanding of the regulations. If they reasonably allow existing units to comply, then things shouldn't change much. If not, then you could be right, but in time maybe hotels will move in, purchase entire buildings, and pick up the load? Sill a fascinating thing to observe.

Posted by
1085 posts

I just rented an apt in Paris via AirBnB. The registration number made me feel more secure the apartment would still be there for rental use in the fall. I used it as a criteria in my search and not all had it yet. The occupancy tax was minimal and the apt I rented looks lovely. I will report back after my visit. I've used AirBnB in the US, but this will be my first time in Europe.

Posted by
5443 posts

Le Figaro today published this map showing in what arrondissements the fined apartments are.

Article is in French, but the map is pretty easy to read. The title of the map is "Total Amount of Fines Imposed on Owners for Illegally Renting Out their Lodging in Paris on Air BnB".

The total of fines assessed in each arrondissement are color-coded.

https://immobilier.lefigaro.fr/article/ce-que-nous-revele-la-carte-des-locations-airbnb-illegales-a-paris_00e9da8e-14b7-11e9-8616-0ced9439dd56/

Posted by
5443 posts

I think Dick's explanation is excellent, but allow me to add: that you could also be "kicked out" before you arrive. I feel like we've seen reports of this on the Forum over the past maybe 18 months: someone who has rented an apartment through one of these platforms who then closer to departure time for their trip, receives a notification from the owner or his/her rep that the apartment will not be available.

That then puts the traveler in the position, much closer to their departure for travel, of having to find accommodation -- probably with many fewer options on the table than there were when they were first planning their trip. This means the traveler may have to make more compromises on their lodging -- as regards price, location, amenities, or all of the above. Paying more and getting less. A shift in budget close to departure time.

The other broader prospective implication includes an eventual/gradual diminishing of the # of apartments available via these platforms if it becomes too onerous for the owners to manage their properties in a way that complies with the local laws and regulations.

Posted by
7147 posts

Kim, do you know what they plan to do with the €2.1 million they collected?

Posted by
5443 posts

Susan -- no, but that's an excellent question. I'll dig around and see if there's any info on that. Whether it's put back into compliance efforts or something totally different.

Posted by
10847 posts

I've always wondered what the cancellation rate was for AirBnb. You have a bunch of individuals with no name brand to defend, many of which rent as little more than a hobby. Quality control has to be somewhat more of an issue than with Marriott. On the other hand, the AirBnb's may have helped save a number of great classic buildings from the wrecking ball to provide land for that new Marriott. When the quantity goes down, prices will go up, and that will create a whole new dynamic with a whole new list of unintended consequences.... But of what little I do know about what is happening in Paris it seems to be pretty reasonable in the big picture view. I can still remember posts here when all this began from individuals who pretty much flaunted the law. I am glad that is getting an end put to it.

Posted by
6811 posts

The Le Figaro article is very interesting. What struck me was how few apartments, in fact, were targeted, considering how many apartment rentals are available. The number per arrondissement reflects only what the City decided to target, not necessarily a percentage of those available. Although no apartments were fined in the 14th, 19th, and 20th, it doesn't mean there aren't illegal rentals in those areas.

The last line of the article jumped out at me in particular. It says that although it's not publicly stated, it does appear that the City of Paris wants to clear out illegal rentals from the touristic core area of the City, the 1st, 2nd, 4th, and 5th. Le Figaro's words, not mine, but that explains why some arrondissements have more rentals fined and higher total of fines.

"Il n’y a pas que le total des amendes qui est le plus élevé dans le Ve. C’est aussi le cas du total de logements loués illégalement (31). Suivent le IVe (17), le II (12) et le Ier (11). C’est bien la preuve que, contrairement à ce que laissent entendre la mairie et Airbnb, ce n’est pas forcément dans les quatre premiers arrondissements que les fraudeurs sévissent le plus. La Ville veut supprimer les locations touristiques dans ces zones touristiques. "

Posted by
10847 posts

I found what is the big deal. Paris restricts short term rentals to no more than 120 nights a year per apartment. WOW!!! That will have impact on the market. I suspect, if they all complied (as opposed to closing), it would be the equivalent to loosing 50% or more of the units in Paris. Where are all those thousands and thousands of people going to go? This will be interesting to watch play out.

Posted by
7693 posts

Kim, thanks for the continued information. Also Bets, thanks for the extra translation!

Posted by
2546 posts

"Paris restricts short term rentals to no more than 120 nights a year per apartment. WOW!!! "
That is not 100% correct. The 120-day restriction applies to short-term rentals of entire homes by permanent residents who have the right to rent the spaces. If you are the owner of a second home or if you own a number of apartments and want to rent them on the short-term market, you can only rent legally if you follow certain requirements such as owning a second place in the same arrondissement that is available for long term rental. Those requirements are: declare your intention to city hall to do so; request an authorization to use this residence as a furnished vacation rental (meublé de tourisme); and offer a replacement of the square meters you’re taking off the private, long-term housing market (as a rental or a purchasable property) by the same surface area (or sometimes double) in the same arrondissement for long-term housing. Last time I checked, there were only about 100 registered rentals of the type described here in the city.

Posted by
10847 posts

JHK, thanks for clarifying that. Unfortunately news stories tend to skip the details in favor of the "impact". Still a bit of a challenge. But that's okay. I just wonder where all those now displaced tourists will end up staying. Something will have to be built and I dislike modern hotels in historic town centers. But I will enjoy seeing more Parisians living in Paris. Adds to the ambiance.

Posted by
5443 posts

I don't know how much time you've spent in Paris, but there's not a lot of tear down of classic old buildings here to replace them with modern hotels. Mainly you get classic old buildings refurbished to become grand new hotels (i'm thinking Peninsula— formerly a Ministry of Foreign Affairs building — the Shangri-La — formerly the residence of Prince Roland Bonaparte — La Réserve, which was the home of the Duc de Morny, or thé Mandarin Oriental, a 1930s Art Deco jewel that was previously home to elements of the Justice Ministry). It's just a red herring to talk about AirBnB apartments keeping buildings from being torn down and replaced with hotels in Paris?!!!!!

Ever since the horrific Tour Montparnasse fiasco, the preservation and planning authorities have kept a tight lid on things. That's not to say that nothing new and icky ever gets built here, but this notion that Air BnBs are saving Paris from unsympathetic development are off the mark.

Posted by
6811 posts

I was going to comment on that too, but passed because my last post was long enough.
Kim named elegant hotels, but the lower end of the Accor line is going into existing buildings too: Ibis, Mercure, etc. In fact, that was a Mercure across the street from the bakery in a Haussmannian building. There was almost a building/destruction fiasco in the fifties to tear down the Marais, put in new building and freeway, but it got killed, and they’ve kept their heads screwed on right ever since.

Posted by
10847 posts

But if one of the complaints, and yes I know there are others, is the dislocation of the Parisian working class from the inner city then converting whole apartment blocks into hotels seems to me to be as bad, or worse, than short term rentals. Even if the are very chic.

Posted by
6811 posts

Indeed. The problem revolves around two points. Many apartments are off the market, unoccupied except for some weekends because they are family inheritance. People keep them, pay the upkeep charges, but see property as money in the bank. Second, when they come in the market, they go fast as all-cash deals, sometimes to short-term rental investors. Voilà.

Posted by
10847 posts

Contrary to general opinion, I am not philosophically married to the concept of short term rentals. Sure, I own a couple in a popular European tourist city, but its a means to and end and if it ended tomorrow I would just cash out and do something else. What i am really fascinated by is the thought process and the cultural values in action. Oh, and self rule. I am fascinated without judgment. Not my city. I have heard all the extremes from people being homeless to rich greedy conglomerates ruining the world. I suppose at some location and at some point in time its all true; but as a rule i push back on over generalizations and anecdotal data. I have seen short term rentals rebuild slums and I have seen them cause havoc in apartment blocks with rude and noisy tourists. And I suppose in circumstances they degrade the cultural integrity of some locations. But, like I love to say, Europe is not a place; its a collection of places, each unique.

Personally, as a tourist, I would love Paris without short term rentals. Actually I would love it more with no other tourists. But I am not sure if getting rid of short term rentals is a good idea, and I mean that sincerely "I am not sure" if the alternative would be much better. I have no idea if the luxury boutique hotel that takes an entire apartment block is healthier in the long run than 50 short term rentals spread up and down the same street. And that could only be answered, street by street. But most important, its up to the Parisians to decide and what ever they decide should be respected. I detest law breakers, especially when they are guests in someone elses home (or country or city).

Posted by
1085 posts

Thank you, James E for your well thought out and well expressed thoughts on this subject. I, too, am not sure.

Posted by
1086 posts

There is no effort being made by the government to ride Paris of short term rentals. The government has provided for vacation rentals in two important ways, to reiterate what is already explained by others:

  1. Allowing resident owners to rent their homes for up to 120 days a year. A number of Parisians relay heavily upon this income supplement.
  2. Allowing investors to establish commercial (short term) apartments by creating residential apartment space in a meter for meter fashion. In some arrondissements, residential apartment space must be created at twice the size of what is approved for a newly created short term apartment.

The government´s actions have all been for one very clear purpose - the preservation of housing for residents of Paris. An investor may not purchase an apartment and list it on Airbnb for short term rental income (which removes it from residential use) without first having met the requirements set forth in item 2 above.

Similarly, an individual may not purchase property, live elsewhere, and subsequently rent this apartment short term (defined as any period of fewer than 12 months). Renting secondary homes or pieds à terre short term does not meet the requirement of #1 above.

In either case, an apartment offered on line must have a city issued, 13 digit registration number to be clearly displayed with the listing. Interesting to note: anyone can obtain a 13 digit registration number for his property. It takes about 5 to 10 minutes and is completed on line. However, there is no legal screening process when issuing numbers. Thus, a non-resident owner of a vacation apartment in Paris may obtain a registration number for his apartment, even though he may not legally rent it short term (item #1 above).

Apartments without registration numbers are unquestionably offered illegally and with the associated risks, not the least of which is you are dealing financially with an unscrupulous owner. However, registration numbers themselves only suggest legality. It's really a buyer beware environment.