Rio Won’t Ban Airbnb. It Will Let Your Neighbours Vote on It
Housing
Key Facts
—The supply squeeze. Rental listings in Rio’s South Zone fell 27.5 percent in two years, according to the property federation Secovi-RJ.
—The rent effect. Rents across the zone rose about 17 percent over the same period, and roughly 50 percent in Copacabana.
—The retreat. An earlier draft would have banned short lets along the beachfront. That ban has been dropped, as has the licence requirement.
—The mechanism. Hosts will instead need express permission in their building’s convention, which under Brazil’s civil code takes two-thirds of owners.
—The penalties. Fines of R$1,000 ($194) for hosts, doubled on repeat, and R$10,000 ($1,942) for platforms and agents.
—The hosts. Airbnb says nearly a third of its Rio hosts are retirees and more than half rely on the income to stay in their own homes.
Rio’s councillors spent a year arguing about short lets and have quietly changed the question. The new Rio short-term rental rules do not ask whether the city permits them, but whether your building does.
If you rent in Copacabana or Ipanema, you have watched the supply of ordinary flats thin out. The property federation Secovi-RJ puts the fall in South Zone rental listings at almost twenty-eight percent over two years.
Rents rose about 17 percent across the zone in that time. In Copacabana they rose by roughly half.
What the new Rio short-term rental rules would do
A first bill was filed in February last year and archived. A second, filed in March, proposed banning short lets outright in the beachfront strip of Copacabana, Ipanema and Leblon.
Then came twelve public hearings. In May a rewritten text replaced the old one, now co-signed by the council president and the government leader in the chamber.
The beachfront ban is gone. So is the requirement for a municipal operating licence, and so is the service tax, because the sector has been folded into the national tax reform that starts this year.
What remains is a municipal register of hosts and guests, on the model of hotels. Guests will have to present an official document, and check-in and check-out dates may be reported to city hall.
The two-thirds rule is the whole bill
Buried in the text is the provision that decides everything. A host will need express permission written into the building’s convention, and amending a convention requires the consent of two-thirds of the owners.
That is not a light procedural step. In an older building with absent or divided owners, assembling a two-thirds majority can be close to impossible.
Hosts object that the picture of them as a comfortable rentier class is wrong. The model breaks entirely for anyone letting a single spare room.
Airbnb supports that reading with its own numbers. Almost thirty percent of its registered Rio hosts are retired, over half say the income lets them stay in their homes, and ninety percent have only one or two listings.
The courts have moved ahead of the Rio short-term rental rules
While the chamber debates, judges have been settling the question building by building. A panel of the Rio state court upheld an owners’ assembly that had banned short lets after a security incident involving temporary guests.
That follows established doctrine at the superior court, which holds that the use of a unit must respect the purpose set out in the condominium convention. The assembly, in other words, already has the power.
One councillor thinks the whole exercise is unconstitutional. Pedro Duarte of the Novo party argues that tenancy and condominium law are civil matters reserved to the federal legislature.
Airbnb makes the same argument, adding that short lets are expressly authorised by the 1991 tenancy law. The chamber’s fifty-one members have shown resistance, and the plenary vote has not happened.
What this means if you live here
The hotel lobby wants tighter rules, arguing that nightly letting is hotel-keeping under another name. It notes three thousand studios under construction in the city centre and seven thousand more around the port.
Airbnb points abroad for its defence. It says long-term rents in New York rose after regulation, and that Barcelona ended a decade of restrictions with a record housing deficit and long-term rents up seventy percent.
Both sides are selectively right, which is why this has taken a year. The evidence that short lets drain long-term supply is strong; the evidence that banning them refills it is weak.
For a foreign resident the practical advice is simple. Before you buy a studio to let, or sign a lease in a building full of rolling suitcases, read the condominium convention, because that document is about to become the law that matters.
Is Airbnb being banned in Rio?
It is not. An earlier draft would have prohibited short lets along the Copacabana, Ipanema and Leblon beachfront, but that provision was dropped from the text filed in May, along with the proposed municipal licence requirement, and the bill still has to clear committees and a plenary vote in the fifty-one-seat chamber.
Can my building already stop short lets?
In practice yes, and courts have backed assemblies that did so. Brazil’s superior court holds that a unit’s use must follow the purpose set in the condominium convention, and a panel of the Rio state court recently upheld an assembly ban imposed after a security incident involving temporary guests.
Are short lets really why rents rose?
They are a substantial part of it. Rental supply in the South Zone fell almost twenty-eight percent in two years while rents climbed about seventeen percent, and roughly half in Copacabana, as compact flats moved into the short-let market, with foreign buyers, a weak currency and record tourism all feeding the same conversion.
Read More from The Rio Times