BERLIN • A Berlin court yesterday upheld a city regulation that renders short-term home rentals in the German capital illegal, in a ruling with ramifications for firms like Airbnb.
Several home-sharing companies had lodged a complaint against an effective ban on short- term rentals in Berlin in the first substantial challenge to such city legislation in Europe.
"The availability of affordable housing is severely threatened in the entire city of Berlin and the regulation is therefore justified," said judge Rautgundes Schneidereit, who rejected an argument that the regulation violated home owners' basic rights.
The European Commission said just a week ago that member states should ban "sharing economy" services only as a last resort.
Ride-hailing app Uber has already retreated from Frankfurt and Hamburg in the face of fierce opposition from traditional taxi firms.
Rocket Internet's home-sharing website Wimdu said at once that it would appeal against the ruling. The other three plaintiffs said they would continue to fight.
Airbnb, which said that over 20,000 Berliners shared their apartments last year, did not join the complaint as a plaintiff. But a company spokesman said ahead of the trial that the verdict would affect its business and it was watching the case closely.
The Berlin authorities said they estimated that a total of 15,000 apartments were taken off the city's rental market for tourists as a result of the regulation. People renting out their homes in the German capital for periods of less than two months face fines of up to €100,000 (S$153,000).
Although landlords can seek a permit, city officials have said they will reject 95 per cent of requests.
"This is a sad day for all of Berlin and its visitors," said lawyer Peter Vida, representing Wimdu. "We will appeal against this decision without a doubt."
Former head Helge Sodan of the city of Berlin's constitutional court had drafted the complaint. He called the regulation unconstitutional, saying that it violated property and equality rights, as well as the freedom of vocational choice.
Berlin-Mitte district council head Stephan von Dassel welcomed the court's recognition of what he called an acute housing shortage.
"Considering the influx of refugees and the situation of the homeless in our city, we can also imagine converting vacation homes to shelter them," he said.
During the trial, city representatives said the law was not capable of solving Berlin's housing shortage but defended it as a necessary step to combat rising rents and a lack of affordable apartments.
Berlin is expected to grow by 80,000 people this year alone, with the record arrival of migrants straining the city's resources, and experts estimate the city is in need of 140,000 additional apartments. The plaintiffs said the new law simply tried to turn them into scapegoats for a failed housing policy.