Short-term rental cannot last forever

Ewa Karendys: Do you sometimes stay in private apartments rented through portals like Booking.com?

Łukasz Drozda: I have, but I avoid it. I also used to rent short-term accommodations that were more in line with the original idea of couchsurfing, which is staying with local residents. For example, I stayed in apartments in Turkey and Germany where students rented rooms to earn extra money. Today, I prefer to rent a hotel – it’s more comfortable and more ethical for me.

Many urban planners demonically portray the impact of short-term rentals on city life. Do you agree with them?

Yes, at the city policy level, it is one of the biggest problems in the downtown areas of tourist-attractive cities.

This can be seen, for example, in Young City in Gdańsk. Activists calculated that in three new developments, as much as 70 percent of the apartments are used for short-term rentals, and only 30 percent are occupied by permanent residents.

In such areas, empty commercial premises are a common sight. There aren’t enough permanent residents to ensure a sufficient customer base. Meanwhile, sustainable space is multifunctional. We know from history: cities dependent on a single industry or factory are particularly vulnerable to crises. When that function begins to cause problems, the entire city depopulates and declines.

The same applies to housing estates and districts. When residents are lacking, these areas function poorly, and local shops and services struggle to survive. This weakens the local economy, and in extreme cases, can lead to complete collapse. Additionally – in terms of construction – there are high environmental costs. These are especially severe when instead of living spaces, there are uninhabited shells.

Will the new regulations announced by the government finally change something regarding short-term rentals?

We won’t know until they are enacted. This is a constant problem with the entire legislation in Poland. We don’t know what the president will ultimately do; we don’t know what lobbyists will manage to secure during the legislative process. But we do know one thing: today, we have very liberal regulations that do not limit this phenomenon. Essentially, Polish housing policy is libertarian, which means it favors all kinds of speculative and predatory actions. Short-term rental is an example of this.

Some hope that in Young City, the market will eventually saturate with apartments, and the apartments will go on sale or be used for long-term rentals.

I think so too, although much depends on the perspective we consider. Let’s remember that the housing resources in Polish cities have survived several economic systems, sometimes even being within the borders of other countries, which Gdańsk is a vivid example of.

It is absolutely certain that short-term rentals are not eternal and that sooner or later the market will collapse. However, how quickly this will happen depends on government regulations. A good example is what is happening right now in Spain – a place that has become popular among Poles wanting to invest their capital. Tightening regulations on short-term rentals causes the profitability of investing in apartments there to plummet.

If someone buys an apartment because they want to spend holidays in Spain and can afford to maintain such a property, it probably remains attractive. Then, only the inconveniences caused by climate change might be considered. But from an investment profitability perspective, it could turn out to be as much of a flop as the infamous houses in Zanzibar.

Proponents of renting by the night argue that it gives people more choice.

Let me be blunt: that’s bullshit! It’s not true that short-term rentals increase the supply. I once did a simple analysis: I compared the largest cities in Poland known for their economic prowess with resorts and cities that had poor prospects. I compared the saturation of accommodation offers in cities with a large lodging base and those with significantly less.

Conclusions?

Short-term rentals proliferate not where there is a shortage of accommodation, but where one can simply gain an unfair advantage over competitors. Of course, there are some exceptions: for example, some families with children find it more comfortable to rent an apartment instead of a hotel.

That’s the kind of situation I’m talking about. Some prefer to rent an entire apartment, cook there, share costs, and believe it’s more cost-effective for them.

Indeed, if such an offer meets real needs rather than whims, it can sometimes make sense for families. However, it’s not such a widespread phenomenon that the hotel industry couldn’t respond. Moreover, hotels today also operate in forms beyond single rooms. The problem is that hotels with higher operational costs do not focus on this market because they cannot compete with pseudohotels in the gray zone.

This is a question not about real needs but about whims. It’s attractive to buy a service or product cheaply without issuing a receipt, when a company offers a lower rate because it cheats on taxes.

What about the perspective of owners? Someone has an apartment in an attractive location and wants to rent it out to tourists to earn extra during the season.

Point of view depends on the side you’re on. Researchers say that “investment” and “speculation” are just different emotional labels for the same process.

If a person renting out to tourists operates legally, reports the property for hotel services, and pays taxes, why should we have any complaints about them?

Existing regulations are as leaky as a sieve, causing a number of negative consequences. Long-term rental units are disappearing from the housing market. We also face higher environmental costs associated with managing short-term rental units. In hotels, bedding is transported by carts between neighboring rooms, but in short-term rentals, someone has to do that across the city. The inconvenience for neighbors is greater, and employees hired by companies managing dispersed units have worse conditions for wages and unionization. This individual convenience generates socially problematic phenomena.

Let’s return briefly to Gdańsk. On the Lower City, on land previously owned by the city, a public-private partnership is creating 750 apartments. Residents criticize the fact that some of the units are investment apartments. Isn’t it surprising that such a project is being developed with city participation, and instead of social housing on municipal land, more apartments for short-term rent will be built?

If we have a libertarian housing policy, solutions like these are what win. Conducting effective policies through local governments is simply bothersome. It’s not a way to easily gain votes if the public resource is poorly developed. Voters see targeted investments, not responses to the needs of entire social groups.

However, society exerts pressure for solutions that have little chance of materializing, such as lowering nominal housing prices or punishing developers, who have an especially bad reputation here.

When we ask developers about short-term rentals, we often hear that it’s not up to them how buyers use their apartments. Do they really have no influence on who will live in their estates?

I think there’s no point in expecting extensive responsibility from a company that is purely commercial. Instead, we should introduce regulatory solutions that could fund alternative forms of housing, simply taking some of their clientele away from developers. In Gdańsk, developers already dominated local housing construction in the 1990s. Unfortunately, in many large provincial cities, solutions like TBS or SIM (Social Housing Associations, recently renamed Social Housing Initiatives) are either non-existent or just starting to develop.

If a developer builds only apartments of 25–30 square meters, with luggage storage, it’s practically begging for short-term rental.

Exactly. But remember, if it’s profitable, even a hundred-meter apartment can be turned into four legal micro-studios of 25 square meters each. Or more, if someone is even more brazen and tries to circumvent regulations.

The key is not so much the spatial form but the regulatory environment. It shapes housing policy that can support a diverse offer. For example, requiring developers to allocate part of their units for long-term rent and part for sale. The rental offer should also be accessible to significantly less wealthy households.

Which of the planned government tools will be most effective in controlling short-term rentals?

From the perspective of local governments, certainly zones free from short-term rentals will help. It will also be effective to give housing cooperatives and communities the ability to ban short-term rentals in specific units.

I believe that short-term rental is so detrimental from the city’s point of view that we should rather move toward broad bans. Any gaps that might appear would then be filled by the hotel industry. On the other hand, limiting this harmful phenomenon might also lead us back to the original idea of couchsurfing – sharing a home.

Where should the ban on rentals be introduced?

Certainly in the city centers, where districts are most depopulated. Just look at the map of offers on any short-term rental platform to see that their largest clusters are in downtown areas. Such units undermine local housing policies. Add to that the noise caused by short-term guests, and the everyday life of ordinary residents becomes particularly burdensome.

Are you not afraid that new regulations will prove ineffective and, despite requiring consent from housing cooperatives or allowing zones to be designated by local authorities, short-term rentals will still slip out of control?

The biggest risk seems to be that regulations may not be enforced. Just like many traffic or nuisance laws, which depend on the behavior of troublesome “long-term” neighbors.

A certain advantage is that short-term rentals are highly digitized, which makes this solution convenient and contributes to their popularity. Sitting in Warsaw, I can book a place in Gdańsk, Bangkok, or a small village in Chile within five minutes. This also means that platforms – in Poland, we actually use only two – can block illegal listings. Responsibility can be shifted onto them. And less visible offers will be less problematic.

I see a certain similarity here with what some far-right movements sometimes promote. They oppose technology, claiming it facilitates surveillance. But when they “defend cash” and get excited about blockchain, it’s less about protecting citizens’ rights and more about cheating: buying services without receipts or invoices.

What can we learn from Barcelona, Madrid, Amsterdam – cities that have already fought the short-term rental problem?

And they still fight. I don’t believe the battle against housing speculation can be won once and for all. Barcelona, for example, plans to phase out short-term rental licenses starting from November 2028.

I think that’s the best solution because it leaves the least room for loopholes. I don’t know a city that has completely eliminated this problem. The cities with the least issues with short-term rentals are simply those with the lowest housing demand. Their residents are in relatively better situations, so this model affects them the least. It’s about creating a housing policy where the predatory nature of such rentals is less burdensome.

How to do it?

Polish cities should stop pretending the problem doesn’t exist, grab the bull by the horns, and start building a sensible stock of municipal housing. Consistently developed over the years, this would help reduce the housing-related issues.

However, the experiences of Spain show that despite licenses, fines, and registration systems, apartments for short-term rent are still difficult for ordinary residents to access.

The belief that we can realistically lower housing prices without total collapse or even a systemic overhaul might be a pipe dream. In the long run, in a free-market economy, property prices simply tend to rise. Even if we crack down on the short-term rental market and leave housing policy dominated by developers, it won’t cause property prices to significantly fall.

Moreover, a decline in property prices should not be our goal at all.

How so?

It’s simply about ensuring that households, even those belonging to the higher middle class, can benefit from the public housing system. The offer must be sufficiently rich to cover different groups, which reduces stigmatization of those using public services and promotes a more egalitarian housing policy. In such a scenario, the ownership segment will just include the wealthiest. And it won’t be as socially painful if their apartments are expensive.