(Bloomberg) -- Florence, the birthplace of the Renaissance and one of Europe’s top cultural attractions, has had enough: the Italian city will not allow any more properties in its historic center to be rented out on a short-term basis, amid an outcry from local residents priced out of the housing market.
Under new legislation approved this week, property owners can only arrange short-term rentals of homes and apartments if they’re outside the city center, though properties already registered on that basis can continue to be let short-term.
The plan also includes an incentive for switching from short to long-term leases, with landlords who make the transition eligible for a three-year tax waiver.
Renters in European cities are facing a supply shortage that’s pushed prices to record highs. Government policies and post-pandemic trends have drawn skilled foreign workers to Paris, Dublin and Berlin, while the return of students after Covid has pushed up demand in London and Amsterdam. Lisbon’s government plans to end “golden visas” for real estate purchases following protests from locals priced out of the city center.
The center of Florence, known for the Uffizi gallery and the Pitti Palace, has undergone a transformation in recent years as second-home owners have increasingly listed properties through short-term rental sites run by operators including Airbnb, Inc. and Vrbo.
“This decision is an answer to the legitimate cry for help coming from our students, young couples, families in need,” Mayor Dario Nardella said ahead of the vote that approved the measure.
Some 15,000 properties in the city are now being rented out primarily to tourists, according to municipal government figures. Around 75% of short-term rentals are concentrated in just 5% of the city’s area. Since 2016, the average monthly price for residential rentals has increased by 42%.
“While we are disappointed by this update, we note that the proposals are not final and we hope to continue to work with the local authorities in Florence to create a way forward that protects local families, who rely on the income they make from hosting,” Airbnb said in a statement.
Tourism in the UNESCO-listed city, home to Michelangelo’s David statue, has been booming since the end of the pandemic, and the surrounding region of Tuscany estimated that it would host almost 6 million tourists this summer.
--With assistance from Giovanni Salzano.
(Updates with Airbnb statement in eighth paragrah)
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