Will Airbnb Berlin Vacation Rentals Soon Be Illegal?

Will Airbnb Berlin Vacation Rentals Soon Be Illegal?

Berlin Holiday Rentals

Hotels in Berlin have become more and more expensive over the last few years as the number of tourists has grown strongly. Whilst more hotels of all types (from lower cost to high end, such as the quite recently opened Waldorf Astoria Berlin) are opening, they struggle to keep up with demand.

Holiday rentals– i.e. short-term apartment rentals (also increasingly referred to as “Airbnb’s” in light of the website Airbnb’s huge popularity in Berlin and elsewhere) have become a popular alternative, particularly for younger travellers, families, groups of friends or visitors looking for a place for a slightly longer stay. They provide guests with more space, more privacy and often a better insight into the city’s day to day life (you will generally be welcomed by the local host, who can give you advice and tips on where to go). In addition, they are often located in areas (i.e. Prenzlauer Berg, Friedrichshain, Neukoelln) which are very popular but lack hotels.

There is also another reason why Airbnb and other holiday rentals in Berlin are so popular: not only do visitors benefit from them as they generally represent better value for money than hotels in Berlin, but landlords also see it as an attractive way to achieve higher yields from their Berlin property investment. With the long-term rental market in Germany – and, in some ways, even more so in Berlin – being strictly regulated and tenants strongly protected (the notice period to get a tenant to move out of an apartment can, in some cases, be 7 years), numerous Berlin property owners prefer to transform their buy-to-let investment into an Airbnb Berlin holiday rental, as it is more lucrative and allows them to access and use the apartment whenever they need it. In addition, selling an apartment with a tenant (especially a tenant on an old contract, i.e. paying below-market rent) will be more difficult and significantly impact the asking price.

However, the good days for so called Airbnb landlords are coming to an end: the Berlin government has introduced and implemented a bill aiming at limiting – and even banning – holiday apartments in order to meet a growing number of outcries against holiday rentals. Those are, allegedly, limiting the number of apartments available for long-term tenants (housing in Berlin has become increasingly scarce over the last few years, as supply has lagged demand and the population of the city has kept growing). In addition, some neighbours have complained about the noisy tourists staying at the holiday rental apartment next door.

It is questionable whether making a few more thousand apartments is really an effective and intelligent measure to fight a housing shortage, especially considering that Berlin has over 3.5 million inhabitants and its population grows around 1-3% (which would imply at least an extra 35,000 apartments needed per year). In addition, it will clearly have the obvious (although unintended) consequence of limiting the availability of accommodation for tourists, who have been fuelling Berlin’s recovery over the last few years.

However, it looks like, for now, that new regulation is there to stay. So, how should landlords and visitors best cope with it?

Landlords, tenants (wishing to sublet their apartment) and apartment managers will have to apply to their local authority. If they don’t hear back within 14 weeks, it means their application has been accepted, and the apartment can legally be used as a holiday rental. It is, however, worth chasing the local authority once the 14 week timeframe has elapsed to ask them for a confirmation that the authorisation has been granted.  Key exceptions are the following:

  1. If the landlord/managing tenant regularly resides at the apartment (and, ideally, is registered there) and only lets the apartment as a holiday rental during their absence.
  2. Any rentals of more than 2 months.
  3. If the landlord/managing tenant lives in the same apartment and rents out less than 50% of its space as a holiday rental.
  4. Any application made before 31 July 2014 will grant the landlord/managing tenant authorisation to continue to operate the apartment as a holiday rental until May 2016. If the landlord/managing tenant applies after 31 July 2014, the ban may be immediate.

Visitors, on the other hand, might want to make sure that the Berlin Airbnb (or other holiday rental) apartment they stay at is “legal”, i.e. that the landlord or managing tenant has received authorisation or that one of the exceptions above apply to the apartment they are booking, in order to avoid any bad surprises (i.e. sudden cancellation of their booking if the apartment faces a ban, neighbours complaining, etc.).

Last but not least, it is worth noting that, so far, the new regulation against holiday rentals has been poorly implemented, with little to no administrative staff having been put in charge of evaluating individual applications. There is hope that the new regulation may, indeed, prove ineffective  and may someday even be reversed – although some parties on the left call for even stricter measures against holiday rentals, which would lead to the death of the Airbnb Berlin phenomenon.