Tuesday, August 29, 2017

The Market That Broke The Rentals' Legislation

"We will create a legal framework for tourist rentals in 'plurifamiliar' properties so that, under established conditions, they can be rented." This comes from PSOE's manifesto for the 2015 elections in the Balearics. By plurifamiliar, if you're not familiar, this means apartment buildings.

"We will develop a new tourism law ... that will regulate ... tourist rentals." "We will make tourism a source of shared prosperity to ensure that the majority of the population actively participates in the benefits of tourism." This is from the Més manifesto for the same elections.

When Més referred to regulation of rentals, they meant regulation that was more permissive than allowed under the 2012 tourism law. When they spoke of shared prosperity, they were talking in general terms about a more equitable distribution of wealth but also in more specific terms. One of the party's prominent spokespeople on tourism, Toni Reus, the ex-mayor of Santa Margalida, had referred to the right of individual families to supplement their incomes from the renting of a property.

When Biel Barceló of Més became tourism minister after the elections, it was generally acknowledged that he had inherited a hot potato - holiday rentals. New regulation of rentals, he once said, would be undertaken before a new tourist tax was introduced. This didn't happen. Events conspired to mean that the rentals' regulation came along a year later.  

The politics of holiday rentals, broadly shared by PSOE and Més prior to the 2015 elections, were such that the left opposed the Partido Popular's dogmatic stance on apartments. Up until midway through the PP's 2011-2015 administration neither PSOE nor the PSM (the main constituent of Més, of which Barceló is a member) had taken a great deal of interest in holiday rentals. They had been together in government on two occasions - 1999 to 2003 and 2007 to 2011. Holiday rentals had escaped legislative attention.

Although there was an "issue" with the legality of apartment rentals, it was an issue that governments could deal with by making reference to the 1999 law, making the odd threat and basically never doing anything. The issue wasn't worth the renewed legislative hassle. It wasn't that big an issue. The status quo was maintained. Rentals' illegality and legality were allowed to coexist.

In 2012 the PP made a difference. They legislated. Or rather, they reinforced their own 1999 tourism law. It was only after the 2012 act went through that rentals really started to become a "hot potato". Suddenly everyone was talking about rentals and about the tenancy act. The left took up the cause. The PP's law was unfair. It was biased towards the hoteliers and biased against the likes of Toni Reus' families. It was also a potential risk to the islands' tourism.

Over the summer of 2013 there was a great deal of discussion. By August of that summer the tourism minister, Carlos Delgado, was being bombarded with requests and demands to adopt a more permissive approach. PSOE was to the fore in making this bombardment. The PSM weren't far behind, and they were backed by the Chamber of Commerce and various associations, one of which was the restaurants association within the Balearic Confederation of Business Associations. Its president was Pilar Carbonell. She is now the director general of tourism, the choice of Biel Barceló.

The general mantra was that there was a danger in not liberalising the rentals' market. Tourists may well choose to go somewhere else rather than Mallorca and the Balearics. Delgado called a meeting. It had looked as though he might have had a change of mind. He hadn't.

So, when PSOE and Més (with Podemos in the wings) formed the government in spring 2015, rentals' legislation was firmly on the agenda. Both PSOE and Més had it in their manifestos. Neither had given any idea what the legislation might be, but a clue possibly lay with the Catalonia regulations: relatively permissive and capable of bringing in an extra pot of tourist tax revenue.

The government is now being accused, among other things, of kowtowing to the hotels. Més? In the pocket of the hoteliers? Don't be ridiculous. And Pilar Carbonell, a political independent, had constantly been at loggerheads with the Mallorca Hoteliers Federation when she was the restaurants' president, especially because of all-inclusives. As tourism director general, she, like Barceló and like PSOE have had to adapt to an altered situation.

Airbnb was an emerging factor during the time of the PP administration. It then exploded in a way that few could have foreseen. Had it not exploded, it is quite possible that the stock of "illegal" apartments could have been dealt with in a far less complex way than is the case. Who knows, maybe all that had been "illegal" at the time of the election could have been made legal. The fact is that it did explode and has brought with it the various social problems that it has.

Those manifesto pledges haven't been totally broken. It was the Airbnb market that broke what otherwise would have been different legislation.

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