France's highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.
“Total victory for the City of Paris against Airbnb and fraudsters who rent their properties illegally,” deputy mayor Ian Brossat, who is in charge of housing, wrote on Twitter, saying it ended five years of court battles.
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Victoire ! Après 5 ans de procédures judiciaires, la Cour de Cassation donne raison à la Ville de Paris : la régulation des locations de type #Airbnb est définitivement validée.
— Thomas Le Cour (@ThomasLeCour) February 18, 2021
Europe's top court, the European Court of Justice, had also ruled in favour of Paris last September, but it requested French courts to assess some of the specifics of the regulations.
Aiming at tackling housing shortages, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.
Rules for owners of second homes are far more restrictive.
In order to rent a furnished property for less than a year to holidaymakers, owners must apply to local authorities for permission to change the registered use of the space.
They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation, an onerous and time-consuming task.
All of the these elements, including the compensation mechanism, were ruled legal on Thursday.
The decision means the city will be able to resume its legal claims against 420 renters who have been fined on average €50,000 each for breaking the rules.
Paris was at the forefront of efforts by many European cities to limit the effect of Airbnb on the rental market.
Before the coronavirus pandemic, many property owners in sought-after areas opted to rent their space on a short-term basis to tourists rather than to locals, while the high profits were seen as driving up property prices.