Costly new rules make it difficult for Airbnb in Utrecht
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Some local entrepreneurs will be priced out of business
Utrecht homeowners who want to rent their property to travelers will now have to pay nearly €1,300 for the privilege starting July 1st. New rules implemented by the municipality of Utrecht also restrict guest stays to just 60 days out of 365, so rooms can only be booked for two months out of the year. With over 80,000 overnight visitors in 2018, this translates into an important economic reality for the city, with serious consequences for both visitors and hosts.
The move comes after the Council of State suggested a national statute requiring all municipalities to charge a permit fee, passed in January of this year. Since then, cities have all handled things differently. Rotterdam is waiting until next year to act as to be in line with the expected national policies, whereas The Hague has already banned private holiday rentals for now. Amsterdam is threatening €20,000 fines and tighter zoning enforcement, while Utrecht developed this substantial permit scheme.
Naturally, private room taxes, B&B fees and hotel registrations are not uncommon in the Netherlands – almost every municipality has some kind of house rental qualification on the books. But Utrecht’s €1,279 fee is over 2500% higher than Amsterdam’s €45 annual fee and is currently the costliest permit in The Netherlands.
“This fee is excessive and unrealistic,” says chairman Werend Griffioen of the lobby group ‘VVD’. “This high rate shocked us in particular,” he continued, claiming the new permit cost is on top of a 6% tourist tax – which is also paid by the host.
The 3 Million Euro Question for Utrecht
But what may be good for the city can be tragic for entrepreneurs. Already this 6% tax brings in thousands of euros to the city every month from over eighty thousand annual scheduled bookings.
Moreover, if all of Utrecht’s approximately 2,300 rental homes and rooms pay this new €1,279 tax, the new permit represents a THREE MILLION EURO windfall for our township. Perhaps the question should really be – who controls those funds and how shall they be used for the greater good?
Utrecht has limited visits to less than 60 stays a year, at about a €100 a night, so even clever homeowners can only hope to earn a bit over €4,000 all year (once they’ve paid the €1,280 permit, Airbnb’s fees and the 6% tourist tax). And that’s a best case scenario, imagining a one hundred percent booking rate which is unheard of in the time of corona.
So why? Why the high fee? What is the rationale behind these changes? Certainly a cash windfall for the city could have some appeal, but one hopes that’s not the only motivation.
A Local Host Speaks Out
Henk Kakebeeke, a long time Airbnb host in central Utrecht, thinks he has some answers. “At the core of it seems to be a desire to deal with the housing shortage in Utrecht,” he says.
He thinks perhaps the city sees every house that is NOT a holiday rental as another potential student room, family house or expat home. They know the housing shortage in Utrecht is real, and severe, and that perhaps this is the best way to tackle the issue.
Henk’s opinion is clear – and more housing could well be a factor. But this policy would be a first for Utrecht and seems unlikely. Undoubtedly this law will drive up room prices, which could help some travel businesses but it will certainly bankrupt others.
One supposes this could be seen as a desire to discourage tourism altogether, but Utrecht, unlike Amsterdam, hasn’t really had serious issues regarding tourists. Nothing about the decision seems to make total sense to many.
Meanwhile, Henk is making his mind up. He continues, “Before corona it was helping a bit, but during the lock-down, and as B&B hosts, we need help from the local government; it’s already a financial disaster.”
He suggests reducing the tourist tax for the next two years. He also wants readers to understand that some hosts are renting their complete homes only around the holidays. The 60 day rule is a real problem for these people, so new solutions must be imagined.
Without a change soon, Henk may decide to quit altogether. “Asking such an amount of money for a permit for renting your own house during a lock-down is just bad timing,” laments Kakebeeke, “it’s just not worth it anymore.”
As we enter into the unique autumn of 2020 it will be fascinating to see what the national response will be next year and how many Utrecht hosts will be around this time next summer.