New Urban Development Plan in Athens: Regulations on Short-Term Rentals
As Athens gears up for significant changes in its urban landscape, the focus is increasingly shifting towards the regulation of short-term rentals, especially in its bustling center. The city, known for its rich history and vibrant culture, is set to engage in a broader consultation on a new urban development plan for tourism. This strategy is anticipated to introduce crucial regulations on the number of short-term rental accommodations available, marking a pivotal shift in the real estate market.
Uncertainties Surrounding the New Regulations
While the precise details of these forthcoming regulations remain elusive, the inclusion of several specific regions in Attica within these discussions suggests consequential developments on the horizon. This raises questions about the future of the short-term rental market and the broader implications for housing availability in metropolitan areas.
Key Directions of the New Urban Plan
The proposed legislation outlines a primary goal: to set restrictions on the number of short-term rental accommodations in relation to the available hotel capacity. It underscores a need to balance the booming tourism sector with sustainable urban living by controlling the proliferation of platforms like Airbnb.
The plan includes provisions to define "limits on the number of tourism-sharing spaces and regular rental rooms" as a percentage of the hotel beds in various districts labeled as control areas and underdeveloped areas. Cities like Athens and Thessaloniki are at the forefront of this issue, given the pressing housing crisis affecting both urban centers.
Understanding the Areas of Impact
Among the notable districts in Attica that are categorized as underdeveloped are the municipal units of Athens, Kallithea, Alimos, Glyfada, Moschato, Nea Smyrni, Palaio Faliro, Vouliagmeni, Nea Makri, Anavyssos, and Piraeus. According to data from AirDNA, there are currently 21,782 active rentals across these areas, reflecting a vibrant rental market during the peak of the tourist season.
Interestingly, the central area of Athens is dominantly represented, with approximately 16,900 rental properties, which is about 77.5% of the total, leaving only 4,882 accommodations spread across other districts. This discrepancy raises questions about potential intervention strategies, especially in areas where data collection has proved challenging.
The Complexity of Identifying Intervention Areas
The process of identifying which specific areas will be affected involves intricate details. For instance, Anavyssos is part of a larger tourist zone comprising several coastal areas, aggregating approximately 818 rental properties. A similar situation exists for Nea Makri, which is a segment of the Marathon Municipality.
Moreover, areas like Moschato, with merely 96 rentals, prompt inquiries into the rationale behind the proposed restrictions, especially as they seem to lack the characteristics of housing shortages or high demand for long-term rentals.
The Challenge of High Tourism Demand Areas
Conversely, regions identified as control areas are those with intense tourism demand. Locations such as Paralia Pierias, Skopelos, Corfu, Zakynthos, Santorini, and Chania have seen increasing pressure for housing solutions. The demand for student housing and accommodations for public service workers often competes with tourism-driven short-term rental pressures, necessitating urgent remedial measures.
Preliminary Measures and Their Effects
In early 2024, a series of regulatory measures aimed at the short-term rental market were enacted. Most notably, tax regulations have heightened scrutiny on property owners. Those managing three or more properties are required to register a business activity, leading to increased operational costs, including compliance with VAT at 13%. This legislation does not impact owners with only one or two properties.
The Role of the Tax Authority
Just recently, a directive from the Independent Authority for Public Revenue (IAPR) mandated that each property used for short-term rentals must now operate as a tax establishment. This change translates into an annual fee imposed on each rental, rather than cooperation across a corporate entity, as stakeholders had expected.
Consequently, property owners managing multiple rentals could face exorbitant costs. For example, a corporate owner with five properties could anticipate a fee of €600 per property, totaling €3,000 annually, in addition to being taxed on profits.
Backlash from Industry Stakeholders
The latest developments have sparked discontent among industry stakeholders, leading many to petition the Council of State to reconsider the sudden imposition of stringent tax measures. The Association of Short-Term Rental Companies argues against classifying properties solely as revenue-generating operations, stating that this approach lacks legislative backing and considers it unconstitutional to impose such high costs without legislative support.
The Potential for Strategic Changes Among Owners
Market analysts predict that if the current framework remains untouched, property owners may opt for strategic relocations of their rentals to circumvent taxing thresholds. Owners with three to four properties might choose to transfer rental titles to friends or relatives, effectively sidestepping the new regulations entirely.
The Urgency for Effective Solutions
Given the complex landscape of tourism, housing demands, and the requirements placed on rental property operations, the dialogue surrounding these new urban regulations is critical. The busy urban environment of Athens stands at a crossroads between meeting the demand for tourist accommodations and ensuring sustainable housing for its residents.
Conclusion: A Developing Landscape
As the consultation process unfolds, the implications of these changes will resonate throughout Athens and potentially set a precedent for how other urban centers handle the complexities of tourism and housing supply. Balancing the needs of tourists with those of local residents remains a challenging yet vital goal. It is clear that Athens is navigating a pivotal transformation that could redefine its rental market landscape for years to come.
