pandemic prescriptions

The European Cities Using the Pandemic As a Cure for Airbnb

View from the Tagus River of Lisbon, the capital city of Portugal with the old city Alfama.
View from the Tagus River of Lisbon, the capital city of Portugal with the old city Alfama. Photo: Wolfgang Kaehler/LightRocket via Getty Images

If you walked the streets of Lisbon at the end of last year, just after Portugal voted to reelect its surprisingly successful center/left coalition government, it wouldn’t take long to notice something strange. The people spilling out of the capital’s beautiful old apartment buildings were very often, very obviously, tourists — not locals on their way to work, but usually groups of well-to-do 20-somethings looking for an upscale café or jumping on electric Ubers bicycles to find some attraction. When you did see the rare old woman still living downtown in the ancient city, she was usually trailed by a young man with an expensive camera, trying to get a shot of the workaday Portuguese life that had all but vanished.

As Lisbon rapidly transformed into a tourist destination over the last decade, the number of Airbnb units skyrocketed — driving up the cost of housing, and pushing longtime residents out of the city center. When 2020 started, many neighborhoods were more than one third short-term housing; in the worst-affected part of town, around 55 percent of residential units had been converted to makeshift hostels and hotels. Then the virus came, and all the rentals dried up. Now Lisbon is taking advantage of that situation, in order to push some of these units back into the long-term housing market. The city government is renting empty apartments directly from property owners, and then turning around to rent them to Portuguese workers and students at subsidized rates.

“The pandemic offered us a great opportunity to try to resolve a lot of problems at the same time,” Fernando Medina, mayor of Lisbon, said to me on a phone call. “Airbnb had become incredibly important to our economy, but that had put serious pressure on the middle-class and young people trying to live here. The market was inflated, and the housing stock available to permanent residents had shrunk.”

To start out, Lisbon may take up to 2,000 homes off the short-term market, but could expand further, Medina said. They want to prioritize the kinds of workers that are essential — not just to fighting a pandemic, but to keeping the city alive as a place to live, work, and raise families. A lot of the landlords are getting less than they would during peak tourism season, he said, but at least they are getting something. All of the new contracts are for at least five years, and no one will be asked to pay more than 30 percent of their monthly income on rent. Then, over a longer period, city officials plan to use regulation to nudge properties back onto the local market, as well as building new public housing themselves.

In Portugal, efforts to regulate Airbnb rentals and increase housing stock were already underway before COVID-19 crushed everyone’s summer plans; the pandemic simply served to rapidly accelerate efforts to deal with the problem. A similar dynamic is at work in major cities across the continent, as the novel coronavirus has also exposed the extent to which local economies were dependent on tourism.

Last year, the Irish government passed legislation strictly regulating Airbnb-style rentals — but despite the provision for steep fines, the law was weakly enforced. When guests dried up this year, it seems many landlords decided they might as well stay within the law, says Ronan Lyons, an economist at Trinity College in Dublin. He observed a big spike this year in properties entering the long-term rental market — as much as 64 percent in some neighborhoods in the capital. “I suspect a lot of the rush from short-term to long-term rentals in Dublin can be explained by COVID-19, which is acting in a way to enforce the regulation passed last year,”he said, adding that he believed the city would be more likely to hold owners to the new law in the future. As in Lisbon, rents in Dublin had skyrocketed — more than doubling from 2011 to 2019 — not only because of increased demand, but because of a limit on supply. “In that same period, effectively no new rental housing or hotels were built,” Lyons said. “And tourists, at least, were packing into Airbnbs.” In Paris, Mayor Anne Hidalgo has promised a referendum on the future of short-term rental properties in the French capital. “There are about 30,000 Airbnb-type rentals in Paris, the task is to get them back,” Hidalgo said.

The Airbnb press office in London did not respond to request for comment about political developments across the continent.

Since 2016, it has been legal for cities in Spain’s Catalonia region to take over properties that have not had tenants for over two years. The law was aimed at bringing affordable housing on to the market — not combating Airbnb-style rentals — and the law has only been used a few times. But in July, the city of Barcelona (the capital of Catalonia) informed the owners of 194 apartments that they better find tenants soon; if not, the government could take them over and turn them into affordable housing. This is not about the effect of tourism per se, but it is aggressive government action making it clear to the entire real estate market that Catalonia wants more properties filled up with local residents.

Per square mile, Barcelona has the most Airbnb properties in Europe — and Lisbon is No. 2, according to Luis Mendes, professor at the University of Lisbon’s Center for Geographic Studies. According to Mendes and other experts, the ease of using something like Airbnb has not just removed properties from the housing market; the convenience also stops big investors from creating the kinds of well-regulated hotels that create full-time jobs. The relationship became between the company and the city became exploitative, Mendes said. Specialists and Lisbon government officials expect tourists to return as the pandemic fades — indeed, they desperately hope they do. But they expect it will take some time, and with the right adjustments, within a few summers, more of them could be in hotels, or in Airbnb-style rentals spread more evenly throughout the city, with more public and private housing available for locals.

In Rome, a group of activists and researchers at the LUISS Guido Carlo University is looking to promote the “Barcelona model,” as part of a multi-pronged approach to make Italian cities more democratic and inclusive. The city center feels desolate at the moment, because all the properties dedicated to Airbnb rentals — as well as many of the urban homes of the wealthy, who have houses elsewhere — are empty, says Elena de Nictolis, a research fellow at at the university in Rome. “This has made it very clear the extent to which we have been over-reliant on tourism, and the extent to which we have a housing crisis in the country,” she said. “Among many other things, Airbnb has disrupted the housing supply in Italy — there are almost a half a million units dedicated to this kind of short-term rental — and COVID-19 has exposed the problem of urban inequalities even more starkly.” She points to alternative models, like, as promising tourism options that give residents a larger stake in the control of the city. Until now, regulation of Airbnb properties has mostly been done by the Italian version of the IRS, but Parliament is currently discussing a national law.

But it was Fernando Medina, mayor of Lisbon, who recently became the most prominent face of the European anti-Airbnb political backlash. This may have actually had a little to do with a headline that — intentionally or unintentionally — served as clickbait for The Independent. He announced and explained the new measures in that U.K. newspaper in July, and the story seemed to imply he wanted to get rid of all Airbnb properties in the city. “There may have been a certain degree of exaggeration in that headline,” Medina told me. “We don’t want to get rid of Airbnb. We want to reduce the number of Airbnb properties and increase opportunities for the middle class.”

Critics of Medina in the Portuguese capital, especially on the left, say that the current program is insufficient, came too late, and as a result has forced him to spend city money essentially bailing out Airbnb landlords. “We have been pushing for more regulation for years, we have been arguing for more public housing for years, but Medina’s response at this point — what he has been able to do — is essentially helicopter money,” said Ricardo Moreira, a city councilor from the Left Bloc party. Portugal is ruled primarily by the center-left Socialist Party, but they don’t have an outright parliamentary majority, so have mostly ruled with the support of the more radical Left Bloc and Communist Party since 2015. Despite his criticisms of the program, Moreira thinks it is a step in the right direction, and celebrated that Medina is finally recognizing that serious action was needed. But even he doesn’t want to abolish Airbnb-style rentals.

“In the wake of the financial crisis, a lot of Portuguese families took advantage of some spare space in their homes to make extra money. That is great. But it is entirely different when major corporate interests buy up hundreds of properties. Instead of building a new hotel, a vertical hotel, create a kind of horizontal hotel across the city, and clog up all the housing stock in the process. That is unacceptable.”

*A version of this article appears in the August 17, 2020, issue of New York Magazine. Subscribe Now!

The European Cities Using the Pandemic As a Cure for Airbnb