The City of Paris has recently decided to protect its traditional dwelling premises intended for Parisian tenants to face the significant increase of touristic furnished flats in Paris, often rent per night or week through online booking platforms such as Airbnb. For a few years, such touristic furnished rentals, which offer similar prices than those charged on the hotel market, have constituted a fierce competition.
A law dated March 24th, 2014 (called the “Alur Law”), which purpose was to increase the offer of the traditional rental market, had already modified article L. 631-7 of the French Building and Housing Code to subject the conversion of an accommodation which is not the main residence of an owner into "a furnished premise intended for residential use, repeatedly and for short periods, to occasional customers who do not take up residence in there" to an authorization of change of use.
The city of Paris has modified in the same way its municipal regulation related to change of use, issued on the basis of article L. 631-7 of the French Building and Housing Code, to significantly tighten the applicable offset rules.
Based on the definition of a touristic furnished rental provided for by the Alur Law, the new article 3 of the municipal regulation now subjects to a prior authorization of the Mayor the conversion of premises designed for housing into touristic furnished flat rent for short periods to occasional customers.
This authorization is subject to offsetting requirements, located in the same district than the premises for which the change of use is required:
- the offset must be 1 square meter for 1 square meter, when the premises are located outside of the reinforced offsetting sector or when it concerns social housing whereby an agreement has been concluded with the French State pursuant to article L. 351-2 of the French Building and Housing Code relating to personalized housing allowance ("Aide personnalisée au logement");
- the offset requirement is 2 square meters for 1 square meter, when the premises are located in the reinforced offsetting sector (corresponding to the center and the west of Paris, especially concerned by the increase of the touristic furnished rental market which can represent up to 20% of the global rental offer).
This modified municipal regulation is applicable to every applications for a change of use filed since January 1, 2015.
It remains to determine the real impact of such tightening of applicable rules on the success of online booking websites and on the hotel market.