Yuri Yudelevich
October 16th, 2016

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Like Manhattan, but not actually Manhattan

As the housing market in Copenhagen becomes increasingly constrained, finding an affordable home is getting more difficult.

Following a rise in Copenhagen rental prices of 16.8 percent in 2015, many are questioning the effect of online rentals marketplace Airbnb, which has seen the Danish capital quickly become one of the company’s top ten largest cities outside the US.

There are currently 26,000 vacation homes for rent via the platform in Denmark – more than Sweden and Norway combined.

READ MORE: Denmark is Scandinavia’s largest Airbnb country

Quickly banned
Citing similar fears, New York and Berlin have this year taken concrete action against Airbnb and similar businesses.

As a protective measure, they have effectively banned Airbnb by enforcing strict regulations regarding renting or ‘sharing’ property.

Still a nascent issue
‘Is a similar ban possible in Copenhagen?’ was one of the questions at ‘The Airbnb Impact on Housing and Tourism’, an event organised by the International Federation for Housing and Planning (IFHP) in Copenhagen on September 27.

“The municipality does not see Airbnb as a problem,” spokesperson Ida Bigum told CPH POST at the event.

“However, we are just starting to learn about this.”

Bigum concedes that Airbnb could potentially challenge several laws – property ownership rules, for example – so the municipality should consider taking action on the matter. It is believed that City Hall has been assessing the situation since at least May, when its mayor, Frank Jensen, told Politiken that the IFHP was looking into the matter.

A troubled tourism industry
Besides the possible impact of Airbnb on the housing market in Copenhagen, the tourism sector has also expressed concerns about the company’s expansion – despite the company’s claims that 25 percent of its users would not have come to Copenhagen if it had not been for Airbnb (see factbox).

“We need to adapt to the new reality Airbnb has created in the market,” explained Kirsten Munch Andersen – the head of policy at Horesta, the association for the hotel, restaurant and tourism industry in Denmark – to those gathered at the IFHP event.

To compete with Airbnb, according to Andersen, there are two key elements: to get a better understanding of the users, and to have clear and fair guidelines at a municipal level across the country.

And it is within the second element where Andersen thinks the main problem lies. “We are not receiving the help from municipalities in Denmark to establish effective regulations,” she said.

Andersen contends that this allows, among other things, the existence of illegal hotels: namely private apartments that have been turned into improvised guesthouses, which unlike hotels do not meet basic safety regulations.

Amicable in Amsterdam
Amsterdam, unlike Copenhagen, is well experienced with the kind of impact Airbnb can have.

“We have had a positive experience with Airbnb so far,” Albert Eefting from the City of Amsterdam told CPH POST.

“We are continuously in talks with Airbnb and other home-share companies to improve our regulations.”

Tourist rentals are subjected to taxation, just like hotels, and according to Eefting, Airbnb takes care of the taxes and always ensures they are paid.

“Amsterdam is very strict in enforcing these rules, often closing down apartments when they do not meet safety and fire regulations – even if tourists are living inside,” he said.

The Berlin ban
To protect affordable housing, Berlin’s administrative court upheld a de-facto ban on short-term rentals that came into effect in May 2016.

The new regulations prohibit landlords from letting out more than 50 percent of their place on a short-term basis without a permit from the municipality.

It only allows them to rent out individual rooms, as long as they use at least half of the apartment for themselves. Otherwise, they risk fines as high as 100,000 euros.

Strict but ineffective
“Berlin’s experience is not the best one,” Alsino Skowronnek – the author of the ‘Airbnb vs Berlin’ student project at the University of Applied Science in Postdam – told CPH POST.

Alsino carried out extensive research into the impact Airbnb has had on Berlin’s housing market, and how the city has implemented the new regulations.

His findings were revealing: while the number of listings on Airbnb dropped dramatically in April 2016, just a month before the ban came into effect, by September they had significantly increased.

“One of the reasons for this is that Berlin’s authorities are not enforcing the rules enough, so people are going back to using Airbnb as if the ban was never enforced,” explained Alsino.

Future hard to foresee
Given Amsterdam and Berlin’s differing experience with Airbnb, a future scenario is hard to foresee for Copenhagen.

“In the near future, the municipality will have to invest more effort into working together with Airbnb to get better data,” concluded Ida Bigum from the City of Copenhagen.

The local authorities need access to accurate data if they want to plan effective housing regulations in the future, she said.

In the meantime, they are still trying to decide if home-share companies represent a problem that needs addressing.