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​Berlin law hobbles Airbnb rental business

In an effort to keep rents lower for residents living in the German capital, a law goes into effect prohibiting hosts from renting out their full homes.

Doing business in Berlin just got tougher for Airbnb and similar rental services.

Airbnb

With a single, very long word, the city of Berlin has significantly restricted Airbnb and other companies that let people rent apartments to tourists, businesspeople and other travelers.

That word, Zweckentfremdungsverbot, refers to a law that prohibits rental of full apartments through such online services. Hosts are still permitted to rent out a portion of their homes, according to the Guardian.

The law, passed two years ago but going into effect only on Sunday, is designed to counteract rising rents in the German capital. It's "a necessary and sensible instrument against the housing shortage in Berlin," Andreas Geisel, Berlin's head of urban development, told the Local.

It also spotlights the regulatory difficulties of the so-called sharing economy, in which people offer their own cars, apartments or other resources through an online marketplace. That's meant trouble with traditional businesses subject to heavier government controls and, often, taxation. Uber's ride-hailing service has angered taxi drivers, and Airbnb likewise has created enemies in the hotel business.

Airbnb didn't immediately respond to a request for comment. But a Berlin-based rival, Wimdu, sued to challenge the law and is optimistic a June 8 court hearing will go its way, said Lennart Schirmer, the company's head of marketing. The company expects no enforcement action until the case is decided. "So far, we cannot observe a significant decrease of Wimdu offers in Berlin," he said.

Update, 1:20 a.m. PT May 3: Added comment from Wimdu.