The European Holiday Home Association (EHHA) supports a call of the European Committee of the Regions (CoR) to put the collaborative economy at the forefront of priorities of the EU institutions for the 2019-2024 term of office in an effort to strengthen a fair, proportionate, and harmonized European regulatory framework. EHHA, however, urges decision-makers across the EU to objectively assess the nuance and complexities of the sector, taking into account the valuable work done by the Commission, stakeholders and Member States on the topic in order to ensure a balanced development of short-term rental (STR) services to the benefit of all stakeholders, i.e. hosts, travellers, industry and society at large.
[1]
In the lead-up to the CoR draft opinion, the EHHA has tried to engage and seek constructive dialogue with the CoR. Given this, we would like to put forward some key issues for consideration ahead of the vote in the plenary session:
• Collaborative economy in accommodation sector is a consumer driven phenomenon. A balanced opinion shall showcase not only real or perceived problems, but also the opportunities and benefits short term rental accommodation offers to regions and people living there.
Last year, Eurobarometer opinion poll on collaborative economy was published. It showed that nearly one in four Europeans has already used services offered via collaborative platforms, mostly in accommodation and transport sector. Among those who have used services offered via collaborative platforms, nearly nine in ten (88%) would recommend those services. A majority of users mentioned convenient access to services (73%), availability of user ratings and reviews (60%), the fact that services are cheaper or free (59%), and the wider choice of services (56%) as advantages of using online platforms.
Importantly, one of the primary contributions of the collaborative economy is that people can generate additional income on an occasional basis and without becoming a professional service provider. Second, entrepreneurs can easily interact with distribution channels and access new customers, generating more jobs and taxes. Third, communities can reap the full benefits of tourism through short-term rentals that disperse tourists to wider areas, helping to accommodate them in places where there are only few accommodation options available or there are none. As a voice for the short-term rental sector, we are convinced that it contributes to innovation, boosts entrepreneurship, drives competition, and inspires the growth and jobs. It creates opportunities and benefits for all stakeholders, i.e., hosts, travelers, industry and society at large.
• Challenges are not universal – issues encountered in certain cities do not necessarily exist in other cities and regions – and the CoR should be careful to portray collaborative economy services (and specifically STR) as being unwilling to work with local and national authorities.
Even though tourism provides a main source of income, some larger cities face challenges with today’s scale and form of tourism. EHHA highlights that if one country/region/city or specific area within a city may be suffering from a high number of tourists, the other may be struggling to attract tourists at all. Banning or imposing restrictive policy measures with bias against collaborative economy services – and specifically STR without assessing the variety of factors that contribute to context – and city-specific issues, raises a question of suitability of the law as targeting solely STR would not contribute meaningfully to overall policy goals.
On the contrary, the STR platforms that are members of the EHHA have proactively worked with local and national authorities on issues of data-sharing for tax purposes, voluntary tax collection on behalf of municipalities, and raising awareness of local STR rules among their hosts. This can be a complex task though: STR businesses are exposed not only to 28 national rules of Member States, but thousands of local, municipality level rules. For example, there are around 2,000 local tourist taxes in France, which makes collection and remission of accurate amounts extremely challenging. EHHA members affirm that they are open to solutions which would allow for easier collection and remittance of relevant tourist or accommodation taxes for the transactions occurring actually via their intermediary, provided that simple, straightforward and fair systems are put in place to enable that outcome. The EHHA stresses that tax compliance – whether income tax or tourist tax – will be more effectively ensured if governments take the lead in creating incentives for people to declare their income, simplifying and communicating the rules in ways that can be understood by those engaged in smallscale trading, as well as those running more established businesses.
Saying that STR sector has not worked with national and local authorities would be advancing falsities that do not accurately portray the sector’s willingness to work with authorities.
• Impact on availability and affordability of housing and environment
EHHA highlights that politically inflamed accusations that short-term rentals impact availability and affordability of housing is too one-dimensional in a multi-faceted and complex discussion. Issues such as increasing urban population (according to Eurostat, ¾ of the EU population lives in urban areas and it will grow to 80% by 2050), ageing society, migration and mobility flows, 2008 financial crisis and inability of national/regional/local authorities to address and manage these urban development challenges have led to the housing situation we have today. EHHA encourages CoR to shift away from politically infused accusations targeted to short-term rentals and look at the evidence based wider
picture in order to address the housing challenges in a suitable way[2].
The short-term rental market is dominated by housing units that would have remained vacant in the absence of home-sharing. Owner-occupiers, those who own the home in which they live, may supply the short-term rental market with spare rooms and cohabit with guests, or they may supply their entire home during temporary absences. These otherwise vacant rentals could also be vacation homes that would not be rented to long-term tenants because of the restrictiveness of long-term leases. In either case, such owners would not make their homes available to long-term tenants, independently of the existence of a convenient home-sharing platform. Instead, home-sharing provides them with an income stream for times when their housing capacity would otherwise be underutilized.
EHHA is convinced that STR sector positively contributes to the environment and the Real Estate Market Advisory Group of the United Nations Economic Commission for Europe (UNECE) in its Policy Framework for Sustainable Real Estate Markets confirms that. UNECE maintains that, contrary to the widespread belief that real estate sectors have negative impact on sustainability, they can actually contribute to the achievement of the UN Sustainable Development Goals. UNECE points out that the real estate sector is one of the main contributors to inclusive and sustainable economic growth as it contributes to the conversion of unused or underused resources into productive capital, hence increasing employment and other economic opportunities and reducing poverty (SDG 1, SDG 8, SDG 11 and 12). The framework even highlights that collaborative economy is one of the criteria helping the real estate sector to contribute to inclusive and sustainable economic growth.
• Challenges experienced by the STR sector and specific asks for policy-making going forward.
In order to fully tap the potential of the Digital Single Market, EHHA urges CoR and policy makers to focus on reducing regulatory fragmentation, implementing existing EU regulation and share of the best regulatory practices[3]. The Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, E. Bienkowska, has highlighted that the sector and its ecosystem still suffer from restrictive and often counterproductive regulation at the local and national level, which is often in contradiction to the principles and objectives of the EU Single Market. She also noted, that in order to take advantage of the opportunities that the collaborative economy offers, the right policy environment must be provided and Commission will continue working to ensure that existing EU law is consistently applied across the EU. As an example, back in January the Commission opened Infringement Proceedings against Belgium, for the disproportionate short-term rental rules which exist in Brussels. The regulatory fragmentation makes it difficult for companies to do business and ultimately reduces choice for both travellers and consumers, putting at risk entrepreneurship and innovation, growth and jobs. As a sector, we support the need to overcome regulatory fragmentation through the establishment of a harmonised European framework, however, opposite to the CoR draft opinion, we believe that such a framework should be the basis rather than addition to all national, regional and local laws.
In the light of supporting the creation of a harmonised European framework, EHHA also urges CoR to differentiate more carefully collaborative economy services. Collaborative economy in transport and accommodation sectors is a fundamentally different economic practice and they should be discussed separately and treated differently.
• Collaborative economy in accommodation sector is a consumer driven phenomenon. A balanced opinion shall showcase not only real or perceived problems, but also the opportunities and benefits short term rental accommodation offers to regions and people living there.
Last year, Eurobarometer opinion poll on collaborative economy was published. It showed that nearly one in four Europeans has already used services offered via collaborative platforms, mostly in accommodation and transport sector. Among those who have used services offered via collaborative platforms, nearly nine in ten (88%) would recommend those services. A majority of users mentioned convenient access to services (73%), availability of user ratings and reviews (60%), the fact that services are cheaper or free (59%), and the wider choice of services (56%) as advantages of using online platforms.
Importantly, one of the primary contributions of the collaborative economy is that people can generate additional income on an occasional basis and without becoming a professional service provider. Second, entrepreneurs can easily interact with distribution channels and access new customers, generating more jobs and taxes. Third, communities can reap the full benefits of tourism through short-term rentals that disperse tourists to wider areas, helping to accommodate them in places where there are only few accommodation options available or there are none. As a voice for the short-term rental sector, we are convinced that it contributes to innovation, boosts entrepreneurship, drives competition, and inspires the growth and jobs. It creates opportunities and benefits for all stakeholders, i.e., hosts, travelers, industry and society at large.
• Challenges are not universal – issues encountered in certain cities do not necessarily exist in other cities and regions – and the CoR should be careful to portray collaborative economy services (and specifically STR) as being unwilling to work with local and national authorities.
Even though tourism provides a main source of income, some larger cities face challenges with today’s scale and form of tourism. EHHA highlights that if one country/region/city or specific area within a city may be suffering from a high number of tourists, the other may be struggling to attract tourists at all. Banning or imposing restrictive policy measures with bias against collaborative economy services – and specifically STR without assessing the variety of factors that contribute to context – and city-specific issues, raises a question of suitability of the law as targeting solely STR would not contribute meaningfully to overall policy goals.
On the contrary, the STR platforms that are members of the EHHA have proactively worked with local and national authorities on issues of data-sharing for tax purposes, voluntary tax collection on behalf of municipalities, and raising awareness of local STR rules among their hosts. This can be a complex task though: STR businesses are exposed not only to 28 national rules of Member States, but thousands of local, municipality level rules. For example, there are around 2,000 local tourist taxes in France, which makes collection and remission of accurate amounts extremely challenging. EHHA members affirm that they are open to solutions which would allow for easier collection and remittance of relevant tourist or accommodation taxes for the transactions occurring actually via their intermediary, provided that simple, straightforward and fair systems are put in place to enable that outcome. The EHHA stresses that tax compliance – whether income tax or tourist tax – will be more effectively ensured if governments take the lead in creating incentives for people to declare their income, simplifying and communicating the rules in ways that can be understood by those engaged in smallscale trading, as well as those running more established businesses.
Saying that STR sector has not worked with national and local authorities would be advancing falsities that do not accurately portray the sector’s willingness to work with authorities.
• Impact on availability and affordability of housing and environment
EHHA highlights that politically inflamed accusations that short-term rentals impact availability and affordability of housing is too one-dimensional in a multi-faceted and complex discussion. Issues such as increasing urban population (according to Eurostat, ¾ of the EU population lives in urban areas and it will grow to 80% by 2050), ageing society, migration and mobility flows, 2008 financial crisis and inability of national/regional/local authorities to address and manage these urban development challenges have led to the housing situation we have today. EHHA encourages CoR to shift away from politically infused accusations targeted to short-term rentals and look at the evidence based wider
picture in order to address the housing challenges in a suitable way[2].
The short-term rental market is dominated by housing units that would have remained vacant in the absence of home-sharing. Owner-occupiers, those who own the home in which they live, may supply the short-term rental market with spare rooms and cohabit with guests, or they may supply their entire home during temporary absences. These otherwise vacant rentals could also be vacation homes that would not be rented to long-term tenants because of the restrictiveness of long-term leases. In either case, such owners would not make their homes available to long-term tenants, independently of the existence of a convenient home-sharing platform. Instead, home-sharing provides them with an income stream for times when their housing capacity would otherwise be underutilized.
EHHA is convinced that STR sector positively contributes to the environment and the Real Estate Market Advisory Group of the United Nations Economic Commission for Europe (UNECE) in its Policy Framework for Sustainable Real Estate Markets confirms that. UNECE maintains that, contrary to the widespread belief that real estate sectors have negative impact on sustainability, they can actually contribute to the achievement of the UN Sustainable Development Goals. UNECE points out that the real estate sector is one of the main contributors to inclusive and sustainable economic growth as it contributes to the conversion of unused or underused resources into productive capital, hence increasing employment and other economic opportunities and reducing poverty (SDG 1, SDG 8, SDG 11 and 12). The framework even highlights that collaborative economy is one of the criteria helping the real estate sector to contribute to inclusive and sustainable economic growth.
• Challenges experienced by the STR sector and specific asks for policy-making going forward.
In order to fully tap the potential of the Digital Single Market, EHHA urges CoR and policy makers to focus on reducing regulatory fragmentation, implementing existing EU regulation and share of the best regulatory practices[3]. The Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, E. Bienkowska, has highlighted that the sector and its ecosystem still suffer from restrictive and often counterproductive regulation at the local and national level, which is often in contradiction to the principles and objectives of the EU Single Market. She also noted, that in order to take advantage of the opportunities that the collaborative economy offers, the right policy environment must be provided and Commission will continue working to ensure that existing EU law is consistently applied across the EU. As an example, back in January the Commission opened Infringement Proceedings against Belgium, for the disproportionate short-term rental rules which exist in Brussels. The regulatory fragmentation makes it difficult for companies to do business and ultimately reduces choice for both travellers and consumers, putting at risk entrepreneurship and innovation, growth and jobs. As a sector, we support the need to overcome regulatory fragmentation through the establishment of a harmonised European framework, however, opposite to the CoR draft opinion, we believe that such a framework should be the basis rather than addition to all national, regional and local laws.
In the light of supporting the creation of a harmonised European framework, EHHA also urges CoR to differentiate more carefully collaborative economy services. Collaborative economy in transport and accommodation sectors is a fundamentally different economic practice and they should be discussed separately and treated differently.
As a sector, we will continue to work in good faith with policy-makers at all levels to help develop and enforce an adequate, fair and simple regulatory framework.[11]
EHHA remains at the disposal of any CoR stakeholders for further questions and discussion.
[1] For example, the EHHA urges CoR to reflect upon already available materials of the European Commission so that the final opinion would be evidence based. CoR could in particular consider the outcomes of the workshops on collaborative economy in short-term rental sector as summarized by the Commission[2] Following the TFEU and the Services Directive, justifications for imposing any policy and regulatory restrictions in collaborative short-term accommodation rental services must be supported by clear evidence that this general interest needs to be protected (housing) and evidence of the causal link between collaborative short-term accommodation rental services and the protection of the general interest exist. In addition, any restrictions of market access or of the exercise of a certain service activity must still be proportionate.[3] CoR could in particular consider the outcomes of the workshops on collaborative economy STR sector as summarized by the Commission