France: Airbnb has announced a partnership deal with real estate agency Century 21 in a deal which will allow subletting in Paris.
Under recent legislation, Paris homes can be rented on short-term rental platforms for a maximum of 120 days, but sub-letting is only allowed without the permission of the property owner.
Airbnb says the goal of the partnership “is to make it easier to sublet so hosts can welcome guests up to 120 days per year on Airbnb. A win-win deal as tenants, landlords and the agency all share the income when a booking is made on Airbnb”.
Any tenant or landlord whose contract has been entered into with Century 21 may apply for an Airbnb-friendly lease, which authorises subletting as part of a revenue share between the landlord, tenant and agency.
For any booking, net revenues (after Airbnb’s commission) are shared, with 70 per cent going to the tenant, 23 per cent for the property owner and seven per cent for the Century 21 agency.
The process is as follows: The tenant makes the request to Century 21, who gets the agreement of the owner. Then the agency puts the listing on Airbnb and deals with any administrative procedures required. The tenant then manages the daily use of his listing: adding photos, adjusting prices, setting availabilities and welcoming guests.
Airbnb said in a statement: “Subletting is legal in France, as long as you have written permission from the owner. With the Airbnb-friendly lease, subletting will be much better supervised. Moreover, this deal does not dry up the supply of housing in tense areas but encourages subletting of occupied homes. In Paris, more than 60 per cent of households are rented, and housing is their main expense. With this new subletting regime, they will be able to increase their purchasing power and build their lives in Paris. This lease will also allow more mobility for students and young workers. When they travel, they may receive an additional source of income.”
The partnership will be trialled in Paris with a view to rolling it out across Century 21’s 852 branches across France. The scope for the partnership is potentially much bigger – founded in the US in 1971, Century 21 is the one of the world’s largest franchised estate agencies, with more than 7,400 independently owned and operated offices in 78 countries.
Airbnb’s partnership with Century 21 is a clever way for the sharing economy giant to access a huge new source of inventory within cities which have tried to suppress its growth through legislation.
In many cities where the cost of buying real estate is prohibitively high, renting is the norm for the majority of the population. Paris is a good case in point, with 60 per cent of Parisians renting their home.
These people have been unable to list their homes on Airbnb without the written permission of their landlord. The Century 21 deal – which provides income for tenant, landlord and agent makes the subletting process more formal and streamlined and is likely to convince formerly reluctant landlords to allow subletting.
It’s a similar model – albeit with existing rather than new-build properties – to Airbnb’s deal with Florida developer Niido, and we can expect to see further deals with large property rental companies to follow in its wake.