How the government is regulating Airbnb in Switzerland

July 2, 2018

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Local authorities in Bern are also considering a law banning outright the ownership of second homes in the city centre.

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A new proposal could make it easier for tenants to sublet using online accommodation platforms such as Airbnb. But other regulations continue to clamp down.

The pattern is familiar: a new technology or innovation appears; public enthusiasm drives it beyond the scope of regulators to keep up; it grows more dominant; associated problems arise, competitors kick up a fuss; the public cools, politicians belatedly try to impose some order.

Many pioneers of the tech economy – from Uber to Facebook – have seen themselves chased by regulators in recent years. All the more surprising, so, that in Switzerland – a country where change is often slow – legislation recently proposed at the federal level appears to facilitate Airbnb’s growing foothold in the accommodation market.

On July 3, a three-month consultation process launched by the government comes to an end. It proposesexternal link (link in French) relaxing a current rental law that obliges tenants to ask permission from their landlord each and every time they want to rent via platforms like Airbnb; from now on, it says, a general landlord’s permission note will suffice to sublet repeatedly over a given period.

And if the landlord wants to refuse the request, he must have good reasons: if neighbours or security were to be compromised by an Airbnb profile that reveals too many photos of surrounding apartments, for example; or if the rental involved regularly hiding keys giving access to the entire building.

Out-of-date

Reaction to the proposal (which is, admittedly, at first glance, minor) has been one of guarded welcome. Airbnb is happy, unsurprisingly, though in an email to swissinfo.ch their spokeswoman didn’t comment on the specifics, rather simply praising Switzerland’s open attitude towards dealing with new “healthy forms of tourism”.

ASLOCA, a group representing the interests of Swiss tenants, wrote (in French)external link that the change would be a welcome update to an “anachronistic” rule, and would simplify the relations between landlords and tenants. However, it adds, none of this should distract from the larger issue of availability of affordable accommodation in Swiss city centres – a problem it worries Airbnb exacerbates.

Landlord associations, at least in French-speaking Switzerland, were more cautious. Not only does the proposal make it more difficult to refuse the right to sublet, the Romandie Real Estate Federation saidexternal link (in French), but it fundamentally undercuts the principle of subletting in general. The right to sublet is (for example) for tenants who temporarily leave the country, it says, not for those looking to do quick business.

And as for the federal authorities who proposed the change, they agree that it is a case of bringing current legislation into line with the “reality” of current practices. In theory, says Cipriano Alvarez of the Federal Housing Office, offering one’s apartment or room on Airbnb under existing rules is illegal; but time-pressure and sheer common sense suggests that a tenant will not be phoning or sending letters to a landlord for each and every one- or two-day visitor. And you can’t prosecute everyone.

Each canton to its own

Beyond such federal action, however, rental laws and business/tourism taxation are mostly handled at the cantonal (regional) or even local level; and here, pressure has been mounting to clamp down on an ever-expanding Airbnb. More specifically, cantons want to ensure that 1. visitor taxes are not lost and 2. too much short-term accommodation does not displace long-term residents from city centres.

In Geneva, for example, where accommodation is scarce and expensive, a 60-day annual Airbnb limit has been introduced in order to head off any over-concentration of short-term offers. Though numbers of Airbnb rooms in the city are relatively low compared to other cities in Europe and North America, the fear is that Airbnb has a detrimental effect on normal long-term housing markets and can lead to a ‘touristification’ of urban centres.

And though this displacement effect has traditionally been denied by Airbnb (see this happy-go-lucky snapshotexternal link of how it sees its impact on neighbourhoods), some studies have suggested that the platform contributes to pushing up rent prices in neighbourhoods where it is present, something that could lead to gentrification and exclusion (read hereexternal link and hereexternal link).

The story is similar across Europe. In 2015, mayor of Barcelona Ada Colau raised fears of her city becoming a “cheap tourist shop” like Venice (her comparison) when she introduced new regulations to limit Airbnb rentals. Paris, Berlin, London, and Amsterdam, among others, have also introduced strict rules in recent years. Mallorca has banned the platform outright.

Indeed, more recently even Airbnb itself has acknowledged its potentially damaging impact. Speaking to Reutersexternal link earlier this year, CEO Brian Chesky pledged – perhaps not quite with the same levels of contrition as Facebook post-Cambridge Analytica – to help tackle the very disruption his company causes.

“When Airbnb started 10 years ago it was kind of the culture that you really can’t take responsibility for what happens on your platform,” he said. “We changed our point of view.”

Airbnb and tourism in Switzerland

According to 2017 figures provided by the Valais Tourism Observatory, Airbnb offers some 29,595 rental ‘objects’ in Switzerland. This amounts to just over 80,000 beds, a figure which is rapidly growing year on year.

The number of beds proposed by Airbnb represents around 30% of the overall accommodation offered in the country. In the mountain region of Valais (known for its abundance of secondary and holiday homes), this figure reaches 73%.

Canton Valais is the Swiss leader when it comes to Airbnb, with over a quarter of all beds on offer. Over half of the country’s total is represented by offerings in the tourism cantons of Valais, Bern, and Graubünden combined. Vaud, Zurich, and Geneva come next in the ranking.

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Taxation boon

But it’s not just the social issue of urban housing availability (in Switzerland the majority of Airbnb offers are in the mountains in any case, not in city centres) that has been under scrutiny. It’s also the issue of collecting visitor and tourist tax, which again differs in method and rate depending on the region.

A recent report by regional newspaper Berner Zeitung outlined (in German)external link how, even at a small scale, big differences between municipalities exist. Whereas the city of Bern charges CHF4.30 per guest per night in tourist tax, a few kilometres down the road in the suburb of Ostermundigen, no such tax exists. And a few kilometres further into the mountains, the resort of Grindelwald took in some CHF3.6 million in visitor tax last year.

Some of the municipalities without such a system, faced with the growth of the platform, are starting to consider introducing such a tax, the paper said. But it is difficult to police.

One solution pioneered by cantons Zug and Basel Country has been to come to an agreement with Airbnb directly to deduct a visitor tax automatically every time a booking is made. This leads to a simplified procedure for authorities and tenants, and is a system reportedly now also being considered by other cantons including Geneva, Fribourg, and Ticino. The method is also encouraged at the federal level.

Longer-term, so – with Airbnb rapidly becoming a fixture of the Swiss accommodation and tourism markets (see infobox) – the trend seems to be towards more regulation, albeit smart rather than hindering.

Airbnb, at least, is positive about the direction: “Switzerland is approaching digitization in the tourism sector very progressively,” said Alexander Schwarz, the company’s boss for Germany, Austria, and Switzerland, in an interview with the NZZ newspaper late last year.

But even the proposals in question at the federal level today, making it easier for tenants to sublet, come with an ulterior motive: by reducing administrative roadblocks and bringing things above board, the hope is that more Airbnb users will actually register their rooms with the authorities, thereby boosting levels of visitor tax collected.

Airbnb will continue to gain a foothold in the Swiss market, but it looks like it will be a regulated one.