The regional government, prompted by the health ministry and town halls, is to prohibit alcohol. No, you're ok: not prohibit booze for everyone, just the underage, the under-18s. Al Capone can rest easy in his grave. He won't be needed, and anyone who fancies cashing in by opening up a speakeasy will be disappointed.
The temperance drive by the Balearic government seems at variance with the culture that it administers. Prohibition in the US was promoted by Protestants. Puritanism, although the term referred to a purification from Catholicism, expanded its meaning. The Puritans of New England were the founding fathers of Protestant abstinence, though it might be noted that the Pilgrim Fathers had arrived in the New World with copious amounts of alcohol. Nevertheless, the state of Maine was the first to ever have prohibition, seventy years before the Volstead Act introduced it nationwide.
Although there was the Catholic Total Abstinence Union of America (and had been from the 1870s), Catholics were almost universally opposed to prohibition. Culturally, drink and religion had more or less always gone hand in hand, and American Catholics weren't about to deny the tradition of centuries.
Prohibition in the US was a huge error. All it achieved was to allow gangsters such as Capone to flourish. It proved impossible to truly enforce because, among other things, there simply weren't the cops to enforce it. There were around thirty federal agents per state, and American states are generally speaking quite large.
What we are talking about in the Balearics, or what the government is talking about, is of course a very different type of prohibition. Under-18s are not allowed to buy alcohol, and from some time in 2018 they will be banned from drinking it. The exact terms of this prohibition will doubtless become clearer. One presumes that the government doesn't intend interfering with what might be drunk around the family dining table. Or perhaps it does.
The chief motivations for this legislation are the street-drinking "botellón" and what happens at fiestas, where the botellón can be and is magnified enormously. During the summer there was a campaign designed to warn of the risks of alcohol, especially when the "verbena" night parties were in full swing. In 2018, we can assume that the campaign is to be intensified and, moreover, be backed by the strong arm of legislation.
Drinking by teenagers in Mallorca (and in Spain) is recognised as having been a growing social problem for several years. An aspect of this has been the greatly increased attendance at and popularity of the night parties. Once upon a time they were local and comparatively quiet events. This is no longer the case, and fiesta flashpoints exist in some more unlikely parts of Mallorca, such as the tiny village of Biniali.
Then there is the "botellón" for which no fiesta excuse is required. It happens everywhere. Regular are the reports of residents denouncing street drinking. Villages, towns, it makes no difference, and the hand-wringing has been wrung for years, normally to no appreciable effect. And this has partly been due to the oddities of local ordinance. One should ask why, as an example, Palma town hall has felt the need to establish special intervention zones for dealing with the botellón, i.e. areas of the city that attract street drinking. Can't the police just deal with it anyway?
In Alcudia, the town hall passed new ordinance in August which set out fines for drinking out of any type of container. Previously, it was an offence to drink from a glass container on the public way. It now doesn't matter, but the mere fact that the town hall should have to specify the type of container highlights the absurdity of some bylaws. In Alcudia, moreover, there is the regular "botellón", which still takes place. Yet police controls are supposed to have been stepped up.
Alcudia was also the location for the June "macrobotellón". When the schools finished, thousands of kids descended on Puerto Alcudia. Police tutors from other municipalities would be on hand to attempt to deter underage drinking, but what did they think was going to happen? All those kids, the vast majority under the age of eighteen (and as young as fourteen), heading to the beaches and the nightlife areas? Were they there to compare notes about their final maths assignments?
There is no denying the fact there is a problem. Mallorcan and Spanish youngsters are not the virtuous abstainers that some might believe them to be. Far from it. The "culture" of alcohol is abused, and trouble accompanies it (as do health and other risks). But ultimately, and whatever righteous campaigns the administrations come up with and whatever the legislation will be, it comes down to enforcement. In the America of prohibition, they discovered that enforcement was nigh on impossible. The police weren't available. Are they in Mallorca?
Showing posts with label Balearic legislation. Show all posts
Showing posts with label Balearic legislation. Show all posts
Monday, December 04, 2017
Friday, October 20, 2017
All-Inclusive And Holiday Rentals Order
Earlier this week there were ministerial pronouncements which reinforced the direction in which government policy is heading. President Armengol said that order is to be put into rules for all-inclusive hotels. Principally, these will introduce some form of limit on the consumption of alcohol - the means of doing this has not been set out - as the government seeks a general raising of the quality of tourist. Through these rules, she hopes, there will be more business for bars and restaurants outside all-inclusive complexes and a reduction in "booze tourism". Will there be? Or will it be the case that some tourist elements merely head for the nearest supermarket and see what offers are available in order to top up on the limits imposed? And a note for Calvia town hall in this regard. Getting supermarkets to eliminate front-of-house displays of booze won't make any difference. Meanwhile, there are other tourism municipalities where there is no ban on displays.
On holiday rentals, Biel Barceló announced that the legislation will enable the possibility of renting out apartments in a legal and commercialised fashion, which was not the case under the Partido Popular's 2012 tourism law. He's right, it does raise the possibility. The problem is that there are all the strings that are attached. One of these is the principle of zoning. About this he remarked that "the most saturated zones will be protected" and rentals in apartments will be in municipalities where there is low tourism activity.
I have always believed that this would be the case. Indeed we already know that there are some coastal areas which have been classified as "saturated" and where there won't be any zoning - Playa de Palma, Cala Millor, Magalluf, for example. The Council of Mallorca, responsible for zoning, is now applying yet more principles for zoning to the nine broadly determined areas of Mallorca. These principles relate to the type of land and to the level of "saturation". The upshot is, in essence, that the interior will get the lion's share of apartment rentals.
I'd said that this would be the case, and it now seems certain that it will be the case. Consequently, what will it mean for coastal resorts, e.g. Puerto Pollensa or Colonia Sant Jordi, where there are more special cases to be made for apartment rentals? No new rentals? It could well be.
On holiday rentals, Biel Barceló announced that the legislation will enable the possibility of renting out apartments in a legal and commercialised fashion, which was not the case under the Partido Popular's 2012 tourism law. He's right, it does raise the possibility. The problem is that there are all the strings that are attached. One of these is the principle of zoning. About this he remarked that "the most saturated zones will be protected" and rentals in apartments will be in municipalities where there is low tourism activity.
I have always believed that this would be the case. Indeed we already know that there are some coastal areas which have been classified as "saturated" and where there won't be any zoning - Playa de Palma, Cala Millor, Magalluf, for example. The Council of Mallorca, responsible for zoning, is now applying yet more principles for zoning to the nine broadly determined areas of Mallorca. These principles relate to the type of land and to the level of "saturation". The upshot is, in essence, that the interior will get the lion's share of apartment rentals.
I'd said that this would be the case, and it now seems certain that it will be the case. Consequently, what will it mean for coastal resorts, e.g. Puerto Pollensa or Colonia Sant Jordi, where there are more special cases to be made for apartment rentals? No new rentals? It could well be.
Tuesday, October 10, 2017
Article Of Faith: Climate Change Law
Joan Groizard Payeras is a departmental director-general with the Balearic government. His brief CV on the government's website tells us that he received a masters in energy engineering and the environment from Cambridge and that he has been a consultant to and engineer with energy companies, with a particular emphasis on renewables. It's pretty impressive and one cannot therefore quibble with his credentials for being the director-general for energy and climate change within the ministry for land, energy and transport.
The government has informed us that it will be introducing pioneering legislation on climate change. We already know a direction in which the government is going on this. The increased use of renewables (solar) is a key policy. As to most other aspects, we will need to wait until the draft legislation is presented in order to gain an appreciation of this pioneering initiative. It will need to demonstrate greater originality than a shift to renewables to fall into the pioneering category, albeit that placing solar at the centre of the energy agenda will represent a pioneering move in the Balearics. It has taken a stupidly long time to get around to the exploitation of a natural resource we have in abundance glaring down on these islands and one, moreover, that isn't in any immediate danger of disappearing.
The irony with solar energy is that ever more of it is going to be required over the next decades. That's because the source of the energy is going to make everywhere that much hotter. Climate change policy can therefore take a positive from the sun being a supplier of energy for air-conditioning in order to offset the negative of the sun being so damned hot and reducing the islands to an almost permanent state of drought, or at least the victims of prolonged heat waves.
Groizard was last week presenting some conclusions from the first study to be made of climate change vulnerability. The Balearics, it has been noted in various reports of a scientific variety, are going to be particularly vulnerable to the consequences of climate change; if they aren't already. Studying this vulnerability seems like a good start, but what did he have to tell us? In truth, nothing that we don't already know or would have guessed. More violent storms, greater risks of flooding and landslides, drought, heat waves, rising sea level, impact on infrastructure and buildings.
What is this legislation likely to be? It is tempting to think that its pioneering quality will be confined to the fact that nowhere else has actually passed a law which specifically states climate change in its title. For a government as virtuous as the current one, it would be a feather in an already environmentally plumed cap to lay claim to such legislative innovation. This assessment, however, does rather dilute the role that Groizard has and is presumably playing. He isn't a civil servant, he's an expert; that's why he's director-general.
The problem, though, is the political nature of climate change. I think by now we are familiar enough with the arguments, so for a government such as the one we have at the moment, having a department bearing the title climate change, enacting legislation called climate change are indications of its political view of the issue. But not everyone of course agrees.
Rod Liddle is someone who can typically be relied upon to stoke an argument. Writing in The Times recently, he wasn't denying climate change - "I can see (the climate) doing its stuff outside my window" - but he made a point, as if it was really again needed, that "climate change proponents are required to hype up the rhetoric, to provide politicians with suitably scary predictions". He was referring in particular to scientific experts and to, for example, university departments being dubbed climate change. Once you have these, climate change becomes an article of faith and spawns what it does - policy initiatives, taxes and a lucrative industry.
In a similar fashion, if you have a government department with the title, it's highly unlikely that its expert director-general is going to tell ministers that climate change needn't cause sleepless nights. And I say this with the greatest respect for Groizard.
With certain policies, like solar, they just seem common sense. Exploit the sun, and stop polluting everywhere with contaminants and emissions. Likewise with stopping anchorage on posidonia and preventing harm to the marine environment. Posidonia's benefits in terms of preventing erosion and lessening the impact of CO2 are a bonus. One can and should accept this, but in other respects there are doubts. Will this pioneering legislation, as an example, set in motion an ultimate process of urban relocation away from more vulnerable areas? It has to be a possibility. But at what cost? To whom and to where? Yet uncertainty would determine such a policy. Wouldn't it?
The government has informed us that it will be introducing pioneering legislation on climate change. We already know a direction in which the government is going on this. The increased use of renewables (solar) is a key policy. As to most other aspects, we will need to wait until the draft legislation is presented in order to gain an appreciation of this pioneering initiative. It will need to demonstrate greater originality than a shift to renewables to fall into the pioneering category, albeit that placing solar at the centre of the energy agenda will represent a pioneering move in the Balearics. It has taken a stupidly long time to get around to the exploitation of a natural resource we have in abundance glaring down on these islands and one, moreover, that isn't in any immediate danger of disappearing.
The irony with solar energy is that ever more of it is going to be required over the next decades. That's because the source of the energy is going to make everywhere that much hotter. Climate change policy can therefore take a positive from the sun being a supplier of energy for air-conditioning in order to offset the negative of the sun being so damned hot and reducing the islands to an almost permanent state of drought, or at least the victims of prolonged heat waves.
Groizard was last week presenting some conclusions from the first study to be made of climate change vulnerability. The Balearics, it has been noted in various reports of a scientific variety, are going to be particularly vulnerable to the consequences of climate change; if they aren't already. Studying this vulnerability seems like a good start, but what did he have to tell us? In truth, nothing that we don't already know or would have guessed. More violent storms, greater risks of flooding and landslides, drought, heat waves, rising sea level, impact on infrastructure and buildings.
What is this legislation likely to be? It is tempting to think that its pioneering quality will be confined to the fact that nowhere else has actually passed a law which specifically states climate change in its title. For a government as virtuous as the current one, it would be a feather in an already environmentally plumed cap to lay claim to such legislative innovation. This assessment, however, does rather dilute the role that Groizard has and is presumably playing. He isn't a civil servant, he's an expert; that's why he's director-general.
The problem, though, is the political nature of climate change. I think by now we are familiar enough with the arguments, so for a government such as the one we have at the moment, having a department bearing the title climate change, enacting legislation called climate change are indications of its political view of the issue. But not everyone of course agrees.
Rod Liddle is someone who can typically be relied upon to stoke an argument. Writing in The Times recently, he wasn't denying climate change - "I can see (the climate) doing its stuff outside my window" - but he made a point, as if it was really again needed, that "climate change proponents are required to hype up the rhetoric, to provide politicians with suitably scary predictions". He was referring in particular to scientific experts and to, for example, university departments being dubbed climate change. Once you have these, climate change becomes an article of faith and spawns what it does - policy initiatives, taxes and a lucrative industry.
In a similar fashion, if you have a government department with the title, it's highly unlikely that its expert director-general is going to tell ministers that climate change needn't cause sleepless nights. And I say this with the greatest respect for Groizard.
With certain policies, like solar, they just seem common sense. Exploit the sun, and stop polluting everywhere with contaminants and emissions. Likewise with stopping anchorage on posidonia and preventing harm to the marine environment. Posidonia's benefits in terms of preventing erosion and lessening the impact of CO2 are a bonus. One can and should accept this, but in other respects there are doubts. Will this pioneering legislation, as an example, set in motion an ultimate process of urban relocation away from more vulnerable areas? It has to be a possibility. But at what cost? To whom and to where? Yet uncertainty would determine such a policy. Wouldn't it?
Wednesday, September 20, 2017
One In Eight: Awash With Rentals
One holiday apartment for every eight residents. The statistic is quoted in an article that was published in El País last week. The information came from Airdna, which isn't some type of Airbnb watchdog but is in fact an Airbnb's data analytics business. The website sounds like Airbnb such is the virtue made of, inter alia, its "rentalizer", the first automated valuation tool for short-term rentals.
Among various statements on the website is this: "Short-term rental earnings are blowing away the returns seen in any other real estate investment category. Savvy investors are purchasing properties where lodging supply is low, travel demand is high and regulation is favourable. Learn how to identify the perfect Airbnb investment opportunity." Another states: "Our sophisticated technology picks up every intricate data point on every Airbnb listing in the world. Whether you want to analyse short-term rental rates in Mallorca or regulatory impacts in Manhattan, Airdna has the most comprehensive and longest spanning data set."
How strange it seems that an American website should select Mallorca to be one of two places highlighted under "unmatched global Airbnb coverage". Perhaps it was for alliteration purposes - Mallorca and Manhattan. Perhaps not.
El País was clearly taking Airdna at its word. What better data analytics can there be? They must even outdo those used by Terraferida in mapping Airbnb interests in Mallorca. The article's headline referred to the Spanish municipalities most awash with holiday rentals. The original Spanish was "inundado". The translation could also be flooded, inundated or swamped. It couldn't be saturated but it's not so far off. The municipality with one holiday apartment for every eight inhabitants is the most awash of all. Any guesses?
A few weeks ago I came up with an estimate of how many illegal holiday rentals places there might be in Pollensa. On the basis of what El País (Airdna) says, I wasn't far wrong. Around 11,000, though it was probably a bit on the high side. Pollensa has some 16,200 residents - 16,222 according to the 2016 figure. It therefore has more than 2,000 holiday apartments. That is an absolutely staggering number. So much so that I find it almost hard to believe. Based on the most recent figures I've seen, this would mean that around 18% of all dwellings in Pollensa is an illegal apartment, and that's before you add on the licensed villas and houses.
But that's how it's reported, and almost as staggering is the municipality in fourth spot - Alcudia with one for every twelve residents. That would translate to around 1,600.
Four years ago I took part in a public debate about holiday rentals. To my right were Alvaro Middelmann, a one-time president of the Mallorca Tourist Board (among many other things), the lawyer Javier Blas, and a lady from the tourism ministry whose name I now can't remember. She was in something of a minority in her defence of the then Partido Popular's legislative approach to holiday rentals. I asked her at one point what planet her boss, Jaime Martínez, was on. I was in favour of far greater liberalisation of the rentals' market. The tourism ministry and government were not.
If you want to know why I've changed my view, then look at those numbers. I don't believe they are anything to celebrate. Bear in mind that these are just Airbnb properties, though it is quite possible that they have also been on other websites. Or were on them. The figures quoted by El País were for July. There has been frantic deleting since then.
But more than the numbers it is those quotes from Airdna. They encapsulate everything that Airbnb has distorted and every way that Airbnb has allowed itself to be distorted in growing so phenomenally as a business. Savvy investors, short-term rentals earnings, and people still talk about the collaborative, sharing economy? Who are they trying to kid?
Manel Casals is the manager of the Barcelona Hotels Guild. You would expect him not to be a fulsome advocate of holiday rentals, but when he said in an interview recently that the collaborative economy is a ridiculous invention (the translation could also mean comic invention), then he wasn't far wrong.
I have sympathy, and I've said it before, for those apartment owners who had been renting out either legally (by the tenancy act) or not up until the time Airbnb suddenly exploded (and it hadn't at the time of that debate). It might have satisfied the views I held only four years ago if Airbnb had not come along and destroyed the chances of legalising so many apartments. Those chances would have been significantly greater than they now are because of how the government has acted - has been forced to act.
"Analyse short-term rental rates in Mallorca"; it says it all. The collaborative economy wasn't a comic invention. It was a decent one before it became ridiculous.
Among various statements on the website is this: "Short-term rental earnings are blowing away the returns seen in any other real estate investment category. Savvy investors are purchasing properties where lodging supply is low, travel demand is high and regulation is favourable. Learn how to identify the perfect Airbnb investment opportunity." Another states: "Our sophisticated technology picks up every intricate data point on every Airbnb listing in the world. Whether you want to analyse short-term rental rates in Mallorca or regulatory impacts in Manhattan, Airdna has the most comprehensive and longest spanning data set."
How strange it seems that an American website should select Mallorca to be one of two places highlighted under "unmatched global Airbnb coverage". Perhaps it was for alliteration purposes - Mallorca and Manhattan. Perhaps not.
El País was clearly taking Airdna at its word. What better data analytics can there be? They must even outdo those used by Terraferida in mapping Airbnb interests in Mallorca. The article's headline referred to the Spanish municipalities most awash with holiday rentals. The original Spanish was "inundado". The translation could also be flooded, inundated or swamped. It couldn't be saturated but it's not so far off. The municipality with one holiday apartment for every eight inhabitants is the most awash of all. Any guesses?
A few weeks ago I came up with an estimate of how many illegal holiday rentals places there might be in Pollensa. On the basis of what El País (Airdna) says, I wasn't far wrong. Around 11,000, though it was probably a bit on the high side. Pollensa has some 16,200 residents - 16,222 according to the 2016 figure. It therefore has more than 2,000 holiday apartments. That is an absolutely staggering number. So much so that I find it almost hard to believe. Based on the most recent figures I've seen, this would mean that around 18% of all dwellings in Pollensa is an illegal apartment, and that's before you add on the licensed villas and houses.
But that's how it's reported, and almost as staggering is the municipality in fourth spot - Alcudia with one for every twelve residents. That would translate to around 1,600.
Four years ago I took part in a public debate about holiday rentals. To my right were Alvaro Middelmann, a one-time president of the Mallorca Tourist Board (among many other things), the lawyer Javier Blas, and a lady from the tourism ministry whose name I now can't remember. She was in something of a minority in her defence of the then Partido Popular's legislative approach to holiday rentals. I asked her at one point what planet her boss, Jaime Martínez, was on. I was in favour of far greater liberalisation of the rentals' market. The tourism ministry and government were not.
If you want to know why I've changed my view, then look at those numbers. I don't believe they are anything to celebrate. Bear in mind that these are just Airbnb properties, though it is quite possible that they have also been on other websites. Or were on them. The figures quoted by El País were for July. There has been frantic deleting since then.
But more than the numbers it is those quotes from Airdna. They encapsulate everything that Airbnb has distorted and every way that Airbnb has allowed itself to be distorted in growing so phenomenally as a business. Savvy investors, short-term rentals earnings, and people still talk about the collaborative, sharing economy? Who are they trying to kid?
Manel Casals is the manager of the Barcelona Hotels Guild. You would expect him not to be a fulsome advocate of holiday rentals, but when he said in an interview recently that the collaborative economy is a ridiculous invention (the translation could also mean comic invention), then he wasn't far wrong.
I have sympathy, and I've said it before, for those apartment owners who had been renting out either legally (by the tenancy act) or not up until the time Airbnb suddenly exploded (and it hadn't at the time of that debate). It might have satisfied the views I held only four years ago if Airbnb had not come along and destroyed the chances of legalising so many apartments. Those chances would have been significantly greater than they now are because of how the government has acted - has been forced to act.
"Analyse short-term rental rates in Mallorca"; it says it all. The collaborative economy wasn't a comic invention. It was a decent one before it became ridiculous.
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.
"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.
Monday, August 21, 2017
The Disappearing And Reappearing Rentals
The threat of hefty fines for advertising illegal rentals on websites such as Airbnb has clearly had an effect. Over the first four days following the rentals' legislation coming into force, one website - HomeAway - lost over 550 ads, 16% of the apartments in Mallorca that had been there. And the adverts are continuing to disappear.
But the websites themselves don't appear to be being especially proactive, despite the much higher fines that they could be liable for. An exception is Be Mate. It didn't have many apartments, but they have now all gone and so indeed has Mallorca. Anyone using that website won't even find the island let alone any apartments.
It could be that websites - the big ones with big pockets - will take a calculated risk. Hovering in the background is what has happened in Catalonia. Last December a court found in favour of Airbnb which had appealed a 30,000 euros fine imposed by the Catalonian government. The case revolved around the legality or otherwise of the website. The court deemed that it wasn't illegal.
A further case is in Barcelona. The town hall has fined Airbnb and HomeAway 600,000 euros each, greater than the maximum envisaged in the Balearic legislation. The outcome of appeals against these may prove to be of interest to the Balearic government - one way or the other.
The court's decision with regard to the 30,000 euros fine made reference to the difficulty of distinguishing between an accommodation service and a technological process. In terms of the latter there is no regulatory framework. The court erred on the side of prudence.
One wonders whether the Balearic government's fines of websites - as and when they are issued, which they are bound to be - will be enforceable. One thing's for sure, they will be dragged through the courts and may end up never been resolved. Where individuals are concerned, though, they will find it more difficult to challenge fines. A test case, one fancies, will happen sooner or later. And with Madrid minded to take aspects of the legislation to the Constitutional Court, legal process could well stall. To say the situation is a bit of a mess is an understatement.
In the meantime, though, it is clear that individuals have taken fright. Some are also looking to sell up or not go ahead with purchases that had been planned.
Back in Barcelona, the town hall has announced that since the start of this year it has opened 6,197 proceedings against owners of illegal rentals. The total number of sanctions, i.e. fines, is expected to be 3,473. In Barcelona the fines can be as much as 60,000 euros. In the Balearics, prior to the new legislation coming into force, there had been 600 proceedings.
Meanwhile, and in spite of "experts" having considered otherwise, there is evidence of owners shifting their flats to long-term rental. As an example, on one website - Idealista - the number rose from eight to sixty-one in the space of ten days.
But the websites themselves don't appear to be being especially proactive, despite the much higher fines that they could be liable for. An exception is Be Mate. It didn't have many apartments, but they have now all gone and so indeed has Mallorca. Anyone using that website won't even find the island let alone any apartments.
It could be that websites - the big ones with big pockets - will take a calculated risk. Hovering in the background is what has happened in Catalonia. Last December a court found in favour of Airbnb which had appealed a 30,000 euros fine imposed by the Catalonian government. The case revolved around the legality or otherwise of the website. The court deemed that it wasn't illegal.
A further case is in Barcelona. The town hall has fined Airbnb and HomeAway 600,000 euros each, greater than the maximum envisaged in the Balearic legislation. The outcome of appeals against these may prove to be of interest to the Balearic government - one way or the other.
The court's decision with regard to the 30,000 euros fine made reference to the difficulty of distinguishing between an accommodation service and a technological process. In terms of the latter there is no regulatory framework. The court erred on the side of prudence.
One wonders whether the Balearic government's fines of websites - as and when they are issued, which they are bound to be - will be enforceable. One thing's for sure, they will be dragged through the courts and may end up never been resolved. Where individuals are concerned, though, they will find it more difficult to challenge fines. A test case, one fancies, will happen sooner or later. And with Madrid minded to take aspects of the legislation to the Constitutional Court, legal process could well stall. To say the situation is a bit of a mess is an understatement.
In the meantime, though, it is clear that individuals have taken fright. Some are also looking to sell up or not go ahead with purchases that had been planned.
Back in Barcelona, the town hall has announced that since the start of this year it has opened 6,197 proceedings against owners of illegal rentals. The total number of sanctions, i.e. fines, is expected to be 3,473. In Barcelona the fines can be as much as 60,000 euros. In the Balearics, prior to the new legislation coming into force, there had been 600 proceedings.
Meanwhile, and in spite of "experts" having considered otherwise, there is evidence of owners shifting their flats to long-term rental. As an example, on one website - Idealista - the number rose from eight to sixty-one in the space of ten days.
Thursday, August 17, 2017
The Legal Hypocrisy Of Rentals
Adlai Stevenson was a great of American politics. He was the US ambassador to the UN for five years. His intellect and reasoning wouldn't go amiss in today's America.
That's by the by. Stevenson provided many a quote. One was: "A hypocrite is the kind of person who would cut down a redwood tree, then mount the stump and make a speech for conservation." Never let it be said that there isn't hypocrisy in politics. There's a great deal of it in Spain. Madrid is considering the chopping down of legislation designed in part to conserve but also to preserve - a society's well-being. If it does so, then it will speak of conservation: the status quo.
The additional hypocrisy is manifest. The Partido Popular has for years sought to prevent any liberalisation of the holiday rentals' market. It refused to do so in the Balearics. It has refused to do so elsewhere. The PP of national government in effect washed its hands of the looming boom in rentals by delegating legislation to the regional governments. A regional government, the Balearic government, has legislated. Now the PP is playing the constitution card. Conserve the status quo. It would wish to do so because it has been wholly inadequate in managing an issue that affects the whole country.
The Balearic rentals' legislation was probably always destined to find its way to some court or other. The Aptur rentals' association has yet to make its move, but it signalled before the passing of the legislation that it would be considering a legal challenge. There were two main reasons: conflicts with national law in respect of tenancy and of the so-called horizontal property regime (which at its most simplistic refers to living in apartments).
To be fair to Madrid, it does have a duty to ensure that regional legislation does not invade the competence of the state, if the state has superior competence for a particular matter. But exercising the right to challenge regional law and to take an appeal before the Constitutional Court can appear to be influenced by political thinking and differences. Bullfighting is a clear example.
The problem, constitutionally, that the Madrid government created with rentals is that it acknowledged regions' powers. Statutes of autonomy enable regions to determine policy with regard to tourism, and Madrid made clear that it was up to the regions to come up with their own rentals' laws. There was a total lack of foresight, not least because the government failed to modify its laws that could facilitate those of the regions. The Balearic government has asked Madrid to reform the tenancy act and to establish the principle of a minimum let. Madrid has vacillated and now seems stuck in neutral. Tourism chiefs - the minister and the secretary-of-state - have appeared to be working from different scripts. One says there won't be reform; the other says she'll be looking into it.
Madrid, interestingly, hasn't cited the two laws that Aptur has. It has referred to the law on the internal market, i.e. a nod in the direction of Brussels. While its potential appeal to the Constitutional Court has to do with specific articles in the Balearic legislation, it is this reference which hints that the court may - if it is asked to make a ruling - suspend the whole legislation. It would then have five months to decide whether or not to make the suspension permanent.
These legal niceties aside, one comes back to the apparent hypocrisy. The PP would be adopting a stance that it has long fought to avoid. The Balearic legislation, it could be argued, is over restrictive while at the same time hanging out something of a carrot of licences to come. But in principle it isn't so different to what the PP established under law.
The PP were accused - rightly enough - of favouring friends in the hotel industry. They are now lobbying Madrid to get a grip and establish some form of coherent national policy and law on rentals; just as the regions are also. The government has to take account of social developments - the saturation and now the protests. If it's in any doubt as to what is to blame for saturation, then it can ask Gabriel Escarrer of Meliá. Aptur may claim that rentals are not to blame for saturation, but it's difficult to disagree with Escarrer when he says that they are.
We now have the leader of the PP in the Balearics, Biel Company, saying that his party is open to a review of its stance on holiday rentals. Without giving an idea what this might mean, he has at least acknowledged market dynamics. The Bauzá government, of which he was a member, failed completely in recognising the realities.
Meantime, Madrid seems intent on conserving something to which the PP has been antipathetic. Yes there are market realities, but so there are also social realities.
That's by the by. Stevenson provided many a quote. One was: "A hypocrite is the kind of person who would cut down a redwood tree, then mount the stump and make a speech for conservation." Never let it be said that there isn't hypocrisy in politics. There's a great deal of it in Spain. Madrid is considering the chopping down of legislation designed in part to conserve but also to preserve - a society's well-being. If it does so, then it will speak of conservation: the status quo.
The additional hypocrisy is manifest. The Partido Popular has for years sought to prevent any liberalisation of the holiday rentals' market. It refused to do so in the Balearics. It has refused to do so elsewhere. The PP of national government in effect washed its hands of the looming boom in rentals by delegating legislation to the regional governments. A regional government, the Balearic government, has legislated. Now the PP is playing the constitution card. Conserve the status quo. It would wish to do so because it has been wholly inadequate in managing an issue that affects the whole country.
The Balearic rentals' legislation was probably always destined to find its way to some court or other. The Aptur rentals' association has yet to make its move, but it signalled before the passing of the legislation that it would be considering a legal challenge. There were two main reasons: conflicts with national law in respect of tenancy and of the so-called horizontal property regime (which at its most simplistic refers to living in apartments).
To be fair to Madrid, it does have a duty to ensure that regional legislation does not invade the competence of the state, if the state has superior competence for a particular matter. But exercising the right to challenge regional law and to take an appeal before the Constitutional Court can appear to be influenced by political thinking and differences. Bullfighting is a clear example.
The problem, constitutionally, that the Madrid government created with rentals is that it acknowledged regions' powers. Statutes of autonomy enable regions to determine policy with regard to tourism, and Madrid made clear that it was up to the regions to come up with their own rentals' laws. There was a total lack of foresight, not least because the government failed to modify its laws that could facilitate those of the regions. The Balearic government has asked Madrid to reform the tenancy act and to establish the principle of a minimum let. Madrid has vacillated and now seems stuck in neutral. Tourism chiefs - the minister and the secretary-of-state - have appeared to be working from different scripts. One says there won't be reform; the other says she'll be looking into it.
Madrid, interestingly, hasn't cited the two laws that Aptur has. It has referred to the law on the internal market, i.e. a nod in the direction of Brussels. While its potential appeal to the Constitutional Court has to do with specific articles in the Balearic legislation, it is this reference which hints that the court may - if it is asked to make a ruling - suspend the whole legislation. It would then have five months to decide whether or not to make the suspension permanent.
These legal niceties aside, one comes back to the apparent hypocrisy. The PP would be adopting a stance that it has long fought to avoid. The Balearic legislation, it could be argued, is over restrictive while at the same time hanging out something of a carrot of licences to come. But in principle it isn't so different to what the PP established under law.
The PP were accused - rightly enough - of favouring friends in the hotel industry. They are now lobbying Madrid to get a grip and establish some form of coherent national policy and law on rentals; just as the regions are also. The government has to take account of social developments - the saturation and now the protests. If it's in any doubt as to what is to blame for saturation, then it can ask Gabriel Escarrer of Meliá. Aptur may claim that rentals are not to blame for saturation, but it's difficult to disagree with Escarrer when he says that they are.
We now have the leader of the PP in the Balearics, Biel Company, saying that his party is open to a review of its stance on holiday rentals. Without giving an idea what this might mean, he has at least acknowledged market dynamics. The Bauzá government, of which he was a member, failed completely in recognising the realities.
Meantime, Madrid seems intent on conserving something to which the PP has been antipathetic. Yes there are market realities, but so there are also social realities.
Monday, August 14, 2017
The Rentals' Panic
Panic. This might be one way of describing it. Despite the provisions of the holiday rentals' legislation having been known about for weeks in advance of the law's enforcement, only now is the reality kicking in.
An alternative position is that things will calm down and the government won't act in as draconian fashion as it appears to be. This attitude is wishful thinking. The Aptur holiday rentals association is under no illusion. Remove ads for short-term apartment rentals on various websites immediately. Don't even think twice.
Puerto Pollensa, as we all know, stands to be greatly affected. But so also do Alcudia and the other bay resorts. Consequently, there is a great deal of chatter on social networks dedicated to the different resorts. And some of it is highly misleading, while the "keep calm, it'll sort itself out" message only clouds the situation. Listen to Aptur, it is an association which knows exactly what it is talking about. Follow its advice; no one else's.
I'm afraid that the misleading content persists in, for example, saying that an owner will be ok if an apartment has a licence. How many more times does it need saying? There is no such thing as a licence to rent out a private apartment to tourists. There never has been and the chances of there being licences in the future are, in my opinion, fairly low.
Once the zones for new holiday rentals are determined, my guess is that there will be only a limited number of licences available for the coastal areas of the two bays. Although it hasn't stated this, the government (and Council of Mallorca) will prefer to have zones for licences away from the coasts and thereby give a boost to tourism in the island's interior. It can't state this as specific policy in law, because if it did, it would run into the same problem that emerged in the Canary Islands. The regulations there were that rentals could only be licensed a certain distance from the coasts. A court told the Canarian government that it couldn't apply this because it was a breach of competition.
So there is, I'm afraid, a great deal of uncertainty as well as panic. Meanwhile, there is evidence of one-time holiday rental apartments being re-marketed as long-term rental, which is and always has been perfectly legitimate. There is talk of apartments being offered for a minimum of a month only. This gets round the 30 days minimum period in the legislation, though how practical it might prove to be is debatable. Moreover, even with a month-long minimum rent, an apartment still couldn't be openly marketed as being "touristic". Only if a licence is issued at the end of the current twelve-month moratorium for all new holiday rentals' licences would it be possible to market the apartment in this way. And much, indeed everything, will depend on the Council's zones, which is before one gets to issues such as standards required by the tourism ministry, individual meters, communities' rights of veto, licences of only five years duration that presumably would have to go through a process of renewal. Plus, there will be the cost to register an accommodation place - 2000 euros, it would seem.
I understand that some agencies are considering taking enquiries from known customers. They would then act as intermediaries with the property-owning clients. Nothing would be advertised, but the short-term renting would continue, until, that is, the inspectors find out.
A black market would therefore flourish (if flourish is the right word). Lets wouldn't have to rely on sites like Airbnb because of portfolios of clients that have been built up. It would be a risk, but one that some may wish to take. Let's hope they don't get dobbed in by a neighbour.
The notion that many of the short-term lets will become long-term rentals is not one that "experts" in the real-estate market subscribe to. Yes, there will be some, and there already are, but one can appreciate the logic that there wouldn't be a whole load: apartments were bought for holiday let purposes. These experts believe that the main options will either be the black market or selling. A sudden flood of apartments on the market? You can probably guess what that might mean for prices.
An alternative position is that things will calm down and the government won't act in as draconian fashion as it appears to be. This attitude is wishful thinking. The Aptur holiday rentals association is under no illusion. Remove ads for short-term apartment rentals on various websites immediately. Don't even think twice.
Puerto Pollensa, as we all know, stands to be greatly affected. But so also do Alcudia and the other bay resorts. Consequently, there is a great deal of chatter on social networks dedicated to the different resorts. And some of it is highly misleading, while the "keep calm, it'll sort itself out" message only clouds the situation. Listen to Aptur, it is an association which knows exactly what it is talking about. Follow its advice; no one else's.
I'm afraid that the misleading content persists in, for example, saying that an owner will be ok if an apartment has a licence. How many more times does it need saying? There is no such thing as a licence to rent out a private apartment to tourists. There never has been and the chances of there being licences in the future are, in my opinion, fairly low.
Once the zones for new holiday rentals are determined, my guess is that there will be only a limited number of licences available for the coastal areas of the two bays. Although it hasn't stated this, the government (and Council of Mallorca) will prefer to have zones for licences away from the coasts and thereby give a boost to tourism in the island's interior. It can't state this as specific policy in law, because if it did, it would run into the same problem that emerged in the Canary Islands. The regulations there were that rentals could only be licensed a certain distance from the coasts. A court told the Canarian government that it couldn't apply this because it was a breach of competition.
So there is, I'm afraid, a great deal of uncertainty as well as panic. Meanwhile, there is evidence of one-time holiday rental apartments being re-marketed as long-term rental, which is and always has been perfectly legitimate. There is talk of apartments being offered for a minimum of a month only. This gets round the 30 days minimum period in the legislation, though how practical it might prove to be is debatable. Moreover, even with a month-long minimum rent, an apartment still couldn't be openly marketed as being "touristic". Only if a licence is issued at the end of the current twelve-month moratorium for all new holiday rentals' licences would it be possible to market the apartment in this way. And much, indeed everything, will depend on the Council's zones, which is before one gets to issues such as standards required by the tourism ministry, individual meters, communities' rights of veto, licences of only five years duration that presumably would have to go through a process of renewal. Plus, there will be the cost to register an accommodation place - 2000 euros, it would seem.
I understand that some agencies are considering taking enquiries from known customers. They would then act as intermediaries with the property-owning clients. Nothing would be advertised, but the short-term renting would continue, until, that is, the inspectors find out.
A black market would therefore flourish (if flourish is the right word). Lets wouldn't have to rely on sites like Airbnb because of portfolios of clients that have been built up. It would be a risk, but one that some may wish to take. Let's hope they don't get dobbed in by a neighbour.
The notion that many of the short-term lets will become long-term rentals is not one that "experts" in the real-estate market subscribe to. Yes, there will be some, and there already are, but one can appreciate the logic that there wouldn't be a whole load: apartments were bought for holiday let purposes. These experts believe that the main options will either be the black market or selling. A sudden flood of apartments on the market? You can probably guess what that might mean for prices.
Thursday, August 10, 2017
The Apartment Rentals Wolves Are Howling
So, have you removed your advert for an apartment rental in Mallorca from Airbnb? Or from any one of the 83 websites in total over which the tourism ministry is hanging its sword of rental Damocles? Like the websites themselves, you are probably ok until the week after next. The ministry has given the websites a short period of grace to get their accommodation house (apartments) in order. After that, let the fines begin.
It's finally happening then. For years (at least since 1999), successive governments have issued dire warnings each summer about illegal apartment rentals. We all got so used to these stern statements of intent that we came to assume - rightly enough - that they were the crying of wolves. Not now. The wolfpack is on the prowl, and it doesn't even need to leave the office. Website A. Click. Apartment without tourism ministry registration licence number? Click. What shall we fine? Twenty grand? No, go on, let's make it 40 grand. Why not? Click and kerching! The tills of fines revenue ring in the summer air. What lovely loot for the government.
Yes, if you fail to take that advert down, you can anticipate being the provider of a nice little earner for the Balearic administration. It'll be of very little use you trying to wriggle out of it. True, there is a defence. But how can you possibly make it stick, especially as the burden of proof is all yours? It's rented out under the tenancy act, you maintain. Really? Where's the contract? This is point number one. How many of these short-term not-so-called holiday rentals have ever been formalised with a contract?
Second question. Has the visitor paid a deposit, understood to be the equivalent of a month's rent? Well, has this allegedly non-tourist done so? Erm, not as such. Third question. Can you prove that this tenant is not a tourist or traveller? You what!? This is the killer question. It will be almost impossible to prove. Indeed I struggle to see how it can be possible at all. The tenancy act defence is thus rendered totally useless. Redundant. Meaningless. Here, have a fine.
The days, therefore, of the occasional inspector from the tourism ministry or tax agency turning up and frightening tourists who were totally unaware that they were in illegal flats are more or less passed. There will probably still be some knocking on doors, but life has become so much simpler for the inspectorates. Isn't internet technology wonderful. It most certainly is. All those nice websites allowing owners to advertise their flats. All those nice websites opening their doors to the inspectors. It's like shooting fish in a barrel.
Where do my sympathies lie? On both sides to varying degrees. The government had to act, especially once it became clear that it and whole communities were being eaten by Airbnb. As previously noted, the legislation wasn't going to be like it is. It's all that wonderful internet technology that is to blame. The government suddenly became aware that it existed, as it also became aware of a certain amount of social unrest and Podemos prodding it with a housing emergency pointed stick.
Owners, not all of them, have been getting away with it for years, especially the more corporate variety. Tourists, who are not and never have been to blame, were unknowing participants in an activity not entirely legal. No wonder some might have been shocked when the occasional inspector pitched up in the past. It's not as if anyone was ever going to advise them as to the legality or otherwise. They are now advised. The news of the legislation, the fines is all over the place.
For all that the government needed to intervene, there is nevertheless a sense that it has taken an almighty great sledgehammer to the nut. One of the government's problems is clear. How can it distinguish between a tenant who is a genuine family member and one who is not? I would feel very sorry for any owner who lets his or her family use a flat and gets caught up in all this. Hopefully, some common sense will prevail.
Then there is the owner with one or two apartments who has been renting out to tourists for years either in accordance with the tenancy act or not. There may have been some stretching of the law, but this type of owner now also faces being penalised.
The appetite of Airbnb, however, has meant an impression of everyone getting in on the act, skirting the law and - in certain instances - gobbling up whole portfolios of apartments. At least, though, some apartments will be made legal after the twelve-month moratorium on issuing licences. The question will be where, while certain provisions in the law will in any event automatically exclude them.
But for now the wolf is not crying. It is howling.
It's finally happening then. For years (at least since 1999), successive governments have issued dire warnings each summer about illegal apartment rentals. We all got so used to these stern statements of intent that we came to assume - rightly enough - that they were the crying of wolves. Not now. The wolfpack is on the prowl, and it doesn't even need to leave the office. Website A. Click. Apartment without tourism ministry registration licence number? Click. What shall we fine? Twenty grand? No, go on, let's make it 40 grand. Why not? Click and kerching! The tills of fines revenue ring in the summer air. What lovely loot for the government.
Yes, if you fail to take that advert down, you can anticipate being the provider of a nice little earner for the Balearic administration. It'll be of very little use you trying to wriggle out of it. True, there is a defence. But how can you possibly make it stick, especially as the burden of proof is all yours? It's rented out under the tenancy act, you maintain. Really? Where's the contract? This is point number one. How many of these short-term not-so-called holiday rentals have ever been formalised with a contract?
Second question. Has the visitor paid a deposit, understood to be the equivalent of a month's rent? Well, has this allegedly non-tourist done so? Erm, not as such. Third question. Can you prove that this tenant is not a tourist or traveller? You what!? This is the killer question. It will be almost impossible to prove. Indeed I struggle to see how it can be possible at all. The tenancy act defence is thus rendered totally useless. Redundant. Meaningless. Here, have a fine.
The days, therefore, of the occasional inspector from the tourism ministry or tax agency turning up and frightening tourists who were totally unaware that they were in illegal flats are more or less passed. There will probably still be some knocking on doors, but life has become so much simpler for the inspectorates. Isn't internet technology wonderful. It most certainly is. All those nice websites allowing owners to advertise their flats. All those nice websites opening their doors to the inspectors. It's like shooting fish in a barrel.
Where do my sympathies lie? On both sides to varying degrees. The government had to act, especially once it became clear that it and whole communities were being eaten by Airbnb. As previously noted, the legislation wasn't going to be like it is. It's all that wonderful internet technology that is to blame. The government suddenly became aware that it existed, as it also became aware of a certain amount of social unrest and Podemos prodding it with a housing emergency pointed stick.
Owners, not all of them, have been getting away with it for years, especially the more corporate variety. Tourists, who are not and never have been to blame, were unknowing participants in an activity not entirely legal. No wonder some might have been shocked when the occasional inspector pitched up in the past. It's not as if anyone was ever going to advise them as to the legality or otherwise. They are now advised. The news of the legislation, the fines is all over the place.
For all that the government needed to intervene, there is nevertheless a sense that it has taken an almighty great sledgehammer to the nut. One of the government's problems is clear. How can it distinguish between a tenant who is a genuine family member and one who is not? I would feel very sorry for any owner who lets his or her family use a flat and gets caught up in all this. Hopefully, some common sense will prevail.
Then there is the owner with one or two apartments who has been renting out to tourists for years either in accordance with the tenancy act or not. There may have been some stretching of the law, but this type of owner now also faces being penalised.
The appetite of Airbnb, however, has meant an impression of everyone getting in on the act, skirting the law and - in certain instances - gobbling up whole portfolios of apartments. At least, though, some apartments will be made legal after the twelve-month moratorium on issuing licences. The question will be where, while certain provisions in the law will in any event automatically exclude them.
But for now the wolf is not crying. It is howling.
Saturday, August 05, 2017
The Impact Of Rentals' Legislation On Pollensa
The Council of Mallorca has a plan for intervention in tourist areas. The acronym is PIAT. This plan forms the basis of decisions to be made on the allocation of zones for additional tourist places under the recent holiday rentals' legislation.
Included in this plan is a map of what is described as the "non-regulated offer" of places for tourist stays. There are certain hotspots, varying shades of orange and red showing areas with the highest number of non-regulated (aka illegal) places per square kilometre. The centre of Palma is the hottest. The red becomes purple: plus 1,000 per square kilometre. Playa de Palma and parts of Calvia have orange or red. Apart from these, the greatest concentrations of darker oranges turning red are on the bays of Alcudia and Pollensa. Most of Alcudia is covered with red or orange. Can Picafort has a red area. Puerto Pollensa is red. This denotes between 250 and 500 illegal places per square kilometre.
The Council says that the two northern bay areas, Palma and Playa de Palma are the island's leaders when it comes to illegal offer. The Council and the government's tourism ministry have them all in their sights. But neither Puerto Alcudia nor Puerto Pollensa (Playa de Muro and Can Picafort for that matter) has been categorised as a so-called mature resort. The ones which are include Playa de Palma, Magalluf and Cala Millor. In these resorts there can be no increase in the overall number of tourist places (hotels, rentals, anything). While this doesn't exclude there being new holiday rentals' places, it makes the creation of new ones very complicated. In order for there to be new ones, the equivalent number have to be removed from the market.
So this situation doesn't obtain in the bay areas. Nor does a further categorisation - that of being "saturated". The mature resorts are all said to be saturated, i.e. they have enough tourist places as it is. In theory, therefore, and subject to the principle of zoning, there can be additional tourist places, e.g. rentals, once the twelve-month hiatus with registration for licences ends.
This may sound like good news, but not necessarily. Resorts such as Magalluf and Cala Millor already know (more or less) where they stand. The bay areas do not. Reading between the lines, one feels that the Council and the tourism ministry have something up their sleeves, and that is because of the high level of illegal offer.
There are marked differences between the bays in terms of accommodation. In Alcudia, the percentage of legal holiday rentals' places is around 20% of the number of hotel places. Alcudia has more than three times the number of hotel places in Pollensa, where, uniquely, the number of legal rentals' places is higher than hotel places.
The Council and the tourism ministry may just take the view that the roughly 9,000 legal places in Pollensa are sufficient. Puerto Pollensa could simply be excluded from the zones. This wouldn't mean the loss of existing legal places but it would mean that there can't be any more.
There is of course a determination to get to grips with the so-called illegal offer. Underlying this is a political necessity to not be seen to be giving a form of amnesty to what has been illegal. The legislation, again in theory, offers the opportunity of legalising apartments that have been marketed "outside the law". The practice, one feels, will be somewhat different. The councillor for land, Mercedes Garrido, who is responsible for defining the zones, has pretty much said that currently illegal accommodation will remain so. In other words, there won't be the chance of making it legal.
The Council hasn't defined exactly how many illegal places there are in Pollensa or Alcudia. It has only given the range per square kilometre. One can, though, make an estimation. The municipality of Pollensa has a land area of almost 152 square kilometres. Not all of Puerto Pollensa or indeed Pollensa and Cala San Vicente are in the 250-500 bracket. Allowing for this and taking a lower average of, say, 150, the total of illegal places would be more than 22,000, a figure which is almost certainly inaccurate. But would around half this number, the majority in Puerto Pollensa, be unrealistic? At an average of four places per property, if these are added to the existing legal supply, one begins to understand why there is something of a housing shortage in a municipality with some 11,500 actual dwellings.
Over the years, and especially once the 1999 tourism law was passed which prohibited apartment rentals, it has constantly been said of successive governments getting tough on the illegal offer that this would have a serious impact on Pollensa's economy. This impact is drawing closer.
The illegal supply in Pollensa has in a sense filled the void of the comparatively low number of hotels. With all the various provisions in the legislation at their disposal, such as overcoming the tenancy act loophole (which admittedly is a nonsense), the Council and the tourism ministry could eliminate a significant chunk of accommodation. And there would be little prospect of a new government of the right - the PP - reversing this, given its previous track record on apartment rentals. The impact is about to be felt.
Included in this plan is a map of what is described as the "non-regulated offer" of places for tourist stays. There are certain hotspots, varying shades of orange and red showing areas with the highest number of non-regulated (aka illegal) places per square kilometre. The centre of Palma is the hottest. The red becomes purple: plus 1,000 per square kilometre. Playa de Palma and parts of Calvia have orange or red. Apart from these, the greatest concentrations of darker oranges turning red are on the bays of Alcudia and Pollensa. Most of Alcudia is covered with red or orange. Can Picafort has a red area. Puerto Pollensa is red. This denotes between 250 and 500 illegal places per square kilometre.
The Council says that the two northern bay areas, Palma and Playa de Palma are the island's leaders when it comes to illegal offer. The Council and the government's tourism ministry have them all in their sights. But neither Puerto Alcudia nor Puerto Pollensa (Playa de Muro and Can Picafort for that matter) has been categorised as a so-called mature resort. The ones which are include Playa de Palma, Magalluf and Cala Millor. In these resorts there can be no increase in the overall number of tourist places (hotels, rentals, anything). While this doesn't exclude there being new holiday rentals' places, it makes the creation of new ones very complicated. In order for there to be new ones, the equivalent number have to be removed from the market.
So this situation doesn't obtain in the bay areas. Nor does a further categorisation - that of being "saturated". The mature resorts are all said to be saturated, i.e. they have enough tourist places as it is. In theory, therefore, and subject to the principle of zoning, there can be additional tourist places, e.g. rentals, once the twelve-month hiatus with registration for licences ends.
This may sound like good news, but not necessarily. Resorts such as Magalluf and Cala Millor already know (more or less) where they stand. The bay areas do not. Reading between the lines, one feels that the Council and the tourism ministry have something up their sleeves, and that is because of the high level of illegal offer.
There are marked differences between the bays in terms of accommodation. In Alcudia, the percentage of legal holiday rentals' places is around 20% of the number of hotel places. Alcudia has more than three times the number of hotel places in Pollensa, where, uniquely, the number of legal rentals' places is higher than hotel places.
The Council and the tourism ministry may just take the view that the roughly 9,000 legal places in Pollensa are sufficient. Puerto Pollensa could simply be excluded from the zones. This wouldn't mean the loss of existing legal places but it would mean that there can't be any more.
There is of course a determination to get to grips with the so-called illegal offer. Underlying this is a political necessity to not be seen to be giving a form of amnesty to what has been illegal. The legislation, again in theory, offers the opportunity of legalising apartments that have been marketed "outside the law". The practice, one feels, will be somewhat different. The councillor for land, Mercedes Garrido, who is responsible for defining the zones, has pretty much said that currently illegal accommodation will remain so. In other words, there won't be the chance of making it legal.
The Council hasn't defined exactly how many illegal places there are in Pollensa or Alcudia. It has only given the range per square kilometre. One can, though, make an estimation. The municipality of Pollensa has a land area of almost 152 square kilometres. Not all of Puerto Pollensa or indeed Pollensa and Cala San Vicente are in the 250-500 bracket. Allowing for this and taking a lower average of, say, 150, the total of illegal places would be more than 22,000, a figure which is almost certainly inaccurate. But would around half this number, the majority in Puerto Pollensa, be unrealistic? At an average of four places per property, if these are added to the existing legal supply, one begins to understand why there is something of a housing shortage in a municipality with some 11,500 actual dwellings.
Over the years, and especially once the 1999 tourism law was passed which prohibited apartment rentals, it has constantly been said of successive governments getting tough on the illegal offer that this would have a serious impact on Pollensa's economy. This impact is drawing closer.
The illegal supply in Pollensa has in a sense filled the void of the comparatively low number of hotels. With all the various provisions in the legislation at their disposal, such as overcoming the tenancy act loophole (which admittedly is a nonsense), the Council and the tourism ministry could eliminate a significant chunk of accommodation. And there would be little prospect of a new government of the right - the PP - reversing this, given its previous track record on apartment rentals. The impact is about to be felt.
Saturday, June 03, 2017
Owners Beware: Holiday Rentals' Legislation
So, on Tuesday the Balearic parliament finally got round to debating the government's long-awaited holiday rentals' legislation. The debate took four hours, after which the amendments to the whole of the bill that had come from the Partido Popular and El Pi were booted out, as everyone, including the PP and El Pi, knew they would be. The legislation should be finally approved by the end of the month or early July.
The opposition parties set about Biel Barceló's bill. The PP said that the only ones who'll be happy will be the hoteliers. Álvaro Gijón observed that "for the first time in history, the hoteliers' federation and GOB (the environmentalist group) are in agreement". The legislation will, he argued, create more problems than it seeks to solve. It will be "ineffective, arbitrary and legally inconsistent".
Josep Meliá of El Pi said that the government wasn't regulating, it was "crushing" holiday rentals. The bill fails to respect municipal powers or the right of owners to offer rentals. Olga Ballester for Ciudadanos described the bill as an "absurdity" which imposes very difficult requirements for registration.
The right (and the centre-right) were thus at loggerheads with the left who were introducing the legislation. They themselves, the government parties and Podemos, haven't been in complete agreement, but the bill will go forward and, unless Podemos decide to pull the plug, it will be approved. There is more to the legislation than just the operation of holiday rentals. These other aspects will come into force immediately, the actual operation of holiday rentals' regulation will be delayed until early next year. That's because the island councils and the town halls have to decide on the zoning, which is perhaps the most important aspect of the law.
Biel Barceló assured parliament that the government does not anticipate an appeal against the legislation as there has been in the Canary Islands. Legal advice it has received suggests there will be no appeal, though he did add "in practice, we will see". The appeal in the Canaries was specifically to do with zoning, but the principle adopted in those islands wasn't the same as in the Balearics. The Canarian government had essentially wanted to zone rentals some distance away from resorts. The courts said they couldn't, so the legislation is being rethought.
In practice, the same may happen in the Balearics. It will all depend on how the zoning will ultimately be determined, but the legislation doesn't specify that zones have to be away from resorts.
There was some clarity from Barceló regarding existing licences, i.e. for standalone houses and villas. There has been a fear that zoning might mean properties being de-registered. Barceló said that licences obtained before the change in law will remain in force, though these will be subject to any new specifications in terms of standards. But if you own a house or villa that is currently legally registered for holiday rental, you should be able to breathe easily.
The legislation is of course really about apartments. Any rental property marketed via websites, which can be the likes of Airbnb or those of local estate agents, must have a registration number. At present, none do. Fines are up to 40,000 euros and they can be applied to owners and to those operating websites. The legislation will make it possible to register apartments and to market them openly and legally, but the process of registration cannot begin until the zoning has been concluded. Once it has, there will be all manner of requirements. There will, for instance, have to be individual water meters and the permission of communities of residents. Applications for registration will then have to wait for inspectors to turn up, and that can take months.
Then there is the tenancy act, the Ley de Arrendamientos Urbanos and its loophole. The legislation will tighten this to the point of trying to squeeze the life out of rentals. Although state law sets no minimum on the period of a let, the Balearic legislation will treat any rental of less than a month as being for tourist purposes. What this will mean is that an apartment which is rented out for less than four weeks must have a registration number. The property cannot be advertised on Airbnb or other websites without one. As the government views these rentals to be tourist, the burden of proof will be on the owner to show that it is not for tourist purposes. On top of this, there will be the deposits to be paid.
In a nutshell, if you are currently renting an apartment to tourists, then you need to be very wary. The tenancy act defence will be very much harder to adopt than at present, though one shouldn't rule out there being a legal challenge to this aspect of the legislation (and possibly to others). It may be that in the future, once the zoning process is over, that the apartment could meet requirements for legal registration. That, though, is for the future, as also will be what might happen if there is a change of government in 2019. The PP has said that it will repeal the legislation. Given, however, that it was previously opposed to liberalising the market for apartments, any repeal and different legislation wouldn't necessarily mean a more advantageous scenario.
The opposition parties set about Biel Barceló's bill. The PP said that the only ones who'll be happy will be the hoteliers. Álvaro Gijón observed that "for the first time in history, the hoteliers' federation and GOB (the environmentalist group) are in agreement". The legislation will, he argued, create more problems than it seeks to solve. It will be "ineffective, arbitrary and legally inconsistent".
Josep Meliá of El Pi said that the government wasn't regulating, it was "crushing" holiday rentals. The bill fails to respect municipal powers or the right of owners to offer rentals. Olga Ballester for Ciudadanos described the bill as an "absurdity" which imposes very difficult requirements for registration.
The right (and the centre-right) were thus at loggerheads with the left who were introducing the legislation. They themselves, the government parties and Podemos, haven't been in complete agreement, but the bill will go forward and, unless Podemos decide to pull the plug, it will be approved. There is more to the legislation than just the operation of holiday rentals. These other aspects will come into force immediately, the actual operation of holiday rentals' regulation will be delayed until early next year. That's because the island councils and the town halls have to decide on the zoning, which is perhaps the most important aspect of the law.
Biel Barceló assured parliament that the government does not anticipate an appeal against the legislation as there has been in the Canary Islands. Legal advice it has received suggests there will be no appeal, though he did add "in practice, we will see". The appeal in the Canaries was specifically to do with zoning, but the principle adopted in those islands wasn't the same as in the Balearics. The Canarian government had essentially wanted to zone rentals some distance away from resorts. The courts said they couldn't, so the legislation is being rethought.
In practice, the same may happen in the Balearics. It will all depend on how the zoning will ultimately be determined, but the legislation doesn't specify that zones have to be away from resorts.
There was some clarity from Barceló regarding existing licences, i.e. for standalone houses and villas. There has been a fear that zoning might mean properties being de-registered. Barceló said that licences obtained before the change in law will remain in force, though these will be subject to any new specifications in terms of standards. But if you own a house or villa that is currently legally registered for holiday rental, you should be able to breathe easily.
The legislation is of course really about apartments. Any rental property marketed via websites, which can be the likes of Airbnb or those of local estate agents, must have a registration number. At present, none do. Fines are up to 40,000 euros and they can be applied to owners and to those operating websites. The legislation will make it possible to register apartments and to market them openly and legally, but the process of registration cannot begin until the zoning has been concluded. Once it has, there will be all manner of requirements. There will, for instance, have to be individual water meters and the permission of communities of residents. Applications for registration will then have to wait for inspectors to turn up, and that can take months.
Then there is the tenancy act, the Ley de Arrendamientos Urbanos and its loophole. The legislation will tighten this to the point of trying to squeeze the life out of rentals. Although state law sets no minimum on the period of a let, the Balearic legislation will treat any rental of less than a month as being for tourist purposes. What this will mean is that an apartment which is rented out for less than four weeks must have a registration number. The property cannot be advertised on Airbnb or other websites without one. As the government views these rentals to be tourist, the burden of proof will be on the owner to show that it is not for tourist purposes. On top of this, there will be the deposits to be paid.
In a nutshell, if you are currently renting an apartment to tourists, then you need to be very wary. The tenancy act defence will be very much harder to adopt than at present, though one shouldn't rule out there being a legal challenge to this aspect of the legislation (and possibly to others). It may be that in the future, once the zoning process is over, that the apartment could meet requirements for legal registration. That, though, is for the future, as also will be what might happen if there is a change of government in 2019. The PP has said that it will repeal the legislation. Given, however, that it was previously opposed to liberalising the market for apartments, any repeal and different legislation wouldn't necessarily mean a more advantageous scenario.
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