The leading hospitality company Airbnb has become the most powerful source in the Denmark capital and the number of listing in the online marketplace reveals that almost 2.6% of all the houses in the city are listed on the website and the institute of economics research, the percentage has increased from 2.6% to 7% in the central Copenhagen.
Also, when compared to the other countries in Europe like Berlin and Barcelona, the research reveals that the number of listing in the online marketplace is popular in Copenhagen than in other cities that are relatively similar to its size. And the price value of the rental property depends on the place where the property is located, so nights stay in the outer places like Bispebjerg and Norrebro costs only 574 kroner, while in the city center it is double the cost of 1137 kroner.
Plans to ban the service
Airbnb is a resounding and popular service in the online marketplace in Copenhagen and more than seven percent of the homes in the city are present in the Airbnb listing. Because of the online marketplace and the people’s interest in sharing their house, the value of the property in the city reached the highest level.
The Nykredit bank reported that the total value of the housing in Denmark is based on the average regional price and is 3.142 trillion kroner, which is more than the previous record and it was set back in 2007 before the financial crisis.
Because of the increased rental price in Copenhagen that reached 16.8% in 2015, the online marketplace was questioned. The reason is, the Denmark capital is one among the top ten largest cities outside the United States and the listing had twenty six thousand vacation property was listed in the online marketplace that is more than the combined number of listings in Norway and Sweden.
Immediate action: Like the property issues in Copenhagen, Berlin and New York also faced issues regarding increased property value in the cities and the government took serious actions by banning the hospitality services like Airbnb and other businesses and imposed strict regulations in sharing or renting the property.
But not a serious issue: People expected that the government in Copenhagen will also take similar steps by banning the online marketplace, but on September 27th, 2016 an event was organized by the IFHP (International Federation for Housing and Planning) called the ‘Airbnb impact on the Housing and Tourism’.
Though the online marketplace challenges many laws in Copenhagen like the property ownership rules, but the government and the law makers in the city are getting to know more about the company and it does not seem to be a problem for the municipality.
Tourism is another factor: Apart from the housing market, the tourism industry in Denmark has also expressed certain concerns about the expansion of Airbnb. The company claims that twenty five percent of the users have registered with the company because of the brand name and any other company in this field would not have seen the grand success in the city. The head of the restaurant and tourism industry in Denmark said that they had to follow different strategies in the market to attract the public, as the online marketplace has created new strategies. And to compete with the company, they had to follow two aspects, like to have fair and clear guidelines from the municipality level across the country and the clear understanding about the users. However, the greatest issue is that the tourism department is not receiving potential help from the municipality to establish powerful regulations and is the reason behind the illegal hotels that does not have even the basic safety regulations.
The online marketplace faces mixed response from the European countries; the company’s service is banned in Berlin while it is amicable in Amsterdam. The officials from Amsterdam said that they have been experiencing positive reactions from the Airbnb and other similar marketplace and are in constant touch with the companies in improving the city’s regulation and rules.
In Amsterdam, the tourist rentals are enforced to the taxation, similar to the hotel and they ensure that the taxes are being paid on regular basis. The city is strict in imposing the regulations and laws and closes the apartments that do not follow the basic regulations like the fire and safety regulations, even when the tourists like in the apartment.
While in Berlin, the government up held a short ban n May 2016 as an effect to protect the housing property and the rules prohibit the house owners from allowing more than fifty percent of their place for s short term rent without the permission of the municipality. The people are allowed to give a single room for rental only if have half of the house for themselves and failure to follow the regulation gas to pay fine and it is as high as 100,000 euros.
But, the ban became ineffective in Berlin because the authorities in the city did not follow effective strategies in enforcing the law and so the people went back to the online marketplace and forgot the fact that it is banned in their city. So, the act by the government became a failure in Berlin.
So, it is in the hands of the municipality and the online marketplace to work hand in hand with each other in establishing a proper rental service in the city while following the regulations and rules enforced by the city.
Strict regulations to operate in the city
After the increase in the property value and drop in the tourism industry, the authorities from the Denmark capital are in talks with the rental marketplace so that both the parties are benefited from the regulation.
In regards to the issue, the Mayor of Copenhagen Frank Jenson proposed that the city will follow similar rules that are followed in majority of the cities in the Europe in restricting the time limit for the renters to share their property by proving short term rental service using Airbnb. The Mayor was interested in the regulation enforced in Amsterdam that allows the property owners to rent their homes for a maximum for sixty days in a year.
Jensen said that he impressed with the concept of sharing the property with the vacationers and tourists because it gives them a chance to meet the locals of the city and experience the life of a Copenhagener and intern the locals can earn money by sharing their property. However, he is against those who misuse the opportunity of earning money because they turn their rooms or flats into hotels and so it creates an added pressure to the housing market. Therefore following a regulation similar to Amsterdam will help the company to continue their service in the city while the housing and tourism industry in the city can grow without any issue. However, the Mayor did not specifically talk about the 60 days limit and there are other cities that follow limits in listing the property with the marketplace, like the 120 days limit in Paris and 30 days in New York.
Airbnb is a leading rental provider that is based in San Francisco and has its service operation in 191 countries across the world. And after the hike in the housing industry and other regulatory issues, the company is in an open discussion with the officials of Copenhagen regarding the rental limits.
Author Bio :-
Anand Rajendran is CEO and Co-Founder of Zoplay, best PHP scripts development company located in India. Zoplay is a part of Casperon Technologies a leading social and mobile development company. I’m a Tech geek, Digital marketing expert, Entrepreneur, and Atheist who loves to write everything about PHP Scripts and mobile application development. Cabily Script is a clone of Uber, which developed by the tech gigs of his company.