A Berlin ban against the renting of entire homes and apartments without a proper license, passed to curb the growth of the practice on home-sharing sites like AirBnB, was upheld by the capital's constitutional court on Wednesday.

The law went into effect on May 1, and city authorities report that dozens of cases have since been filed against it. The case in question Wednesday was brought forward by four property owners who argued that the ban infringed upon their constitutional rights as property owners.

But the city worries that allowing such rentals would add undue pressure to a housing market already under stress, leading the short supply of listings to be snatched up by buyers looking for a profit and not a home.

Berlin authorities estimate that 15,000 apartments have been taken off the market to be rented to tourists.

Arguing in favor of the city, Berlin's administrative court said that "the ownership guarantee provides no claim for a residential property to be used with the expectation of making a profit."

International impact

As the first substantial challenge to a city regulation against such rental arrangements, which have baffled city administrations across Europe, the ruling was widely anticipated for its ramifications.

"Cities are closely watching each other to see what types of regulations are possible," Gracia Vara Arribas, a lawyer who has advised the EU on the sharing economy, told Reuters news agency. "Berlin's verdict will surely impact the behavior of other cities."

Home-sharing sites such as Airbnb and Wimdu have been involved in the legal fight against Berlin. And the European Commission recently took a stance against legal roadblocks to the sharing economy.

The Berlin law was passed in 2014 and was followed by a two-year transitional period before going into effect, giving affected property owners time to adjust. Neighbors are encouraged to report offenders, who can face fines of up to 100,000 euros ($113,000).

Only registered holiday rental apartments are allowed to be rented out in full. Home and apartment owners may still rent out rooms.

jtm/uhe (AFP, Reuters)