In September, a referendum will be held in Budapest’s 6th district regarding the abolition of private accommodations such as Airbnb. Consequences of this planned measure include potentially reintroducing about 2,500 high-quality apartments into the long-term rental market, potentially depressing prices and placing current landlords in difficult positions. Additionally, properties with existing permits could risk being pushed towards the black market.
A decline in tourism is also expected in the district, as tourists using Airbnb are unlikely to stay in hotels, choosing alternative destinations instead. This would impact the hospitality industry and other related services like cleaning companies and spas. The municipality stands to lose approximately 700 million HUF annually in direct tax revenue from tourist taxes and building taxes collected from private accommodations. Furthermore, the state could also face a similar loss in revenue. The decrease in tax revenue could also lead to a decline in the quality of services provided by the municipality.
The municipality argues that they cannot monitor how many days accommodations are rented out, although platforms like Airbnb and Booking are required to provide data, making this information accessible to official authorities. Questions arise about why so many permits were issued in the last two years if the process is deemed unmanageable, and why greater control was not exercised.
Experience shows that between a total ban and unregulated operation, numerous transitional solutions are possible. Other downtown districts, such as the 5th district, have already introduced regulations that strike a balance between the interests of residents and landlords. Airbnb hosts have adapted flexibly to previous measures, indicating a potential acceptance of reasonable regulations that maintain stability and benefit all parties.
The following regulations align with the considerations mentioned above:
- Maximum occupancy per accommodation: Only up to 4 guests would be allowed per accommodation. Those hosting more guests would be required to operate a concierge service. This regulation ensures guest safety and residential peace.
- Mandatory attendance at homeowners’ meetings: Owners must attend condominium meetings, either in person or through a representative. This participation ensures continuous and effective communication between the residential community and landlords.
- Limiting the number of rentable apartments per condominium: The number of apartments available for rent within a condominium would be restricted, thereby balancing the interests of residents with rental opportunities.
These regulations would contribute to a more orderly operation of private accommodations, taking into account the interests of residential communities while still enabling tourism to flourish.
It is important to highlight that the complete elimination of private accommodations could infringe upon the fundamental right of private property use. This is a “red line” that should not be crossed, as it sets a precedent that could jeopardize property rights protection. If such a step is taken, what would prevent the next step from being restrictions on long-term apartment rentals? The municipality proposes tightening regulations citing housing crises, but it is worth noting that only about 7% of properties in the 6th district are utilized as private accommodations. If this measure fails to address housing issues, questions may arise about central rent setting as a next step.
Vienna’s example in managing housing crises may be relevant, although the Vienna model requires intervention at the capital level. Vienna directly owns over 220,000 apartments and controls another 200,000 through various property developers, covering nearly half of the city’s housing market. 80% of Viennese have access to affordable housing, including the middle class, not just the poorest.
Austria has operated a system for over a century where every Austrian citizen pays 1% of their annual gross income as affordable housing tax, financing municipal rental housing. Similar initiatives in Hungary could alleviate housing crises. However, it is important to note that reasonably and carefully regulated private accommodation services can positively impact not only tourism but also serve as a foundation for economic growth and stability. Therefore, housing crisis management and tourism regulation should not be mutually exclusive solutions.
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