Prague plans to address Airbnb with new portal

An online education campaign on the legal responsibilities will be launched

Prague will try to address the issues coming from shared accommodation services such as the web platform Airbnb and its rivals. The idea has been mentioned before, but concrete action is starting to take place.

Due to users of these internet platforms not following the rules for the providing accommodation services, the city loses about Kč 120 million per year in fees and taxes. Prague will first try a friendly approach through a new information portal.

City Councilor Jan Wolf (KDU-ČSL) said the portal should be created in about a month on the Prague City Hall website. The portal will list the obligations of both providers of shared accommodations and their clients. People offering private accommodation often do not know about the obligation to pay an accommodation fee, a spa or holiday tax or income tax. The providers also often lack a trade license. Wolf is leading a work group focused on the shared accommodation issue.

City Hall wants to evaluate the effectiveness of the education portal after a year or two. If it does not have the desired effect, then the city will contemplate changing legislation to allow for more direct regulation.

Prague has been trailing behind international cities in addressing shared accommodation. “Shared accommodation is an understandable phenomenon from the internet era, but it brings some problems. Among other things, it contributes to the growth in rent and property prices. We do not want to destroy [shared accommodation services], but give it a certain framework with comparable terms to hotels or hostels,” Wolf said, according to media reports.

“However, the city's maneuvering space is very narrow in this respect because of the current legislation. That is why we want to first use education instead of tightening [rules]. A large number of shared accommodation providers currently do not know about their obligations or find them unclear,” he added.

Czech law does not allow for cities to collect fees directly from companies such as Airbnb. The Czech Pirate party has proposed this solution, but Councilor Wolf says that it is not practical as services such as Airbnb do not have the statistics needed to make the payments.

According to those who favor regulations, they could lead to a slower growth in rent prices and a wider offer of more affordable housing. It could change the character of the city center due to long-term tenants having a stronger relation to the neighborhood.

Other cities have taken more drastic steps. In Berlin, accommodation can only be provided by someone who lives in the real estate. In other words, they can rent rooms but not entire flats. Offenders face large fines.

New York and Amsterdam and allow short-term apartment rentals up to a maximum of 120 days a year.

Vienna now requires mandatory registration of accommodation providers, which has helped to increase the amount of taxes collected by about half.

Airbnb earlier this year ranked Prague as one of the top cities based on the number of reservations this summer.

Airbnb has argued in other cities that the number of tourists is larger than the number of hotel rooms, and the service as a result helps to increase tourism. That is not the case in Prague, according to critics, and many users of services like Airbnb are simply businesses operating outside of the legal framework. Airbnb has operated in Prague for five years.

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