Tallinn mayor wants licensing of guest apartments

The move is supported by housing associations, but the state is cautious

The Mayor of Tallinn, Mihhail Kõlvart, wants the government to amend the Tourism Act so that accommodation services can be provided in private apartments only if the local government has issued a license. A key condition for this would be obtaining the consent of 2/3 of the apartment association members.

Shirking a license will incur fines

In addition, it would be necessary to ensure that the apartment meets the mandatory health and fire safety requirements. When applying for a license, the applicant must also pay a one-time license fee. The license will be valid for three years and owners that shirk getting one will be subject to fines (EUR 300 for individuals and up to 6 000 for legal entities).

In Estonia, the share of guest apartments covers 14-16 percent of all travel accommodation, which worries housing associations. Earlier this month, the Tallinn Old Town Society asked the state to establish specific requirements for guest apartments, including registration. Kõlvart agrees, finding that many permanent residents of Tallinn, who live in a residential building with short-stay apartments, are disturbed by the change in their living environment.  

"There are frequent situations where guests in short-time rental apartments misuse the common property (eg. staircase, lift), rubbish is not sorted, noise levels are significantly higher than in residential apartments, the night peace is not observed, apartment parties are frequent, and so on," observes the Mayor, quoted by ERR.

Moreover, adds Kõlvart, health protection requirements are regularly checked in hotels, which is impossible to do in guest apartments because their exact address is not known. According to him, in 2019 there were about 4 500 short-term rental premises in the city on offer via the Airbnb.com platform and their number has increased more than twofold over four years.

Small investors to take the blow

According to investor Kaspar Kissa, Kõlvart's plan would deal the biggest blow to small investors. He insists that obtaining the consent of 2/3 of the residential cooperative members is almost mission impossible.

Kissa and other landlords claim that the mayor is rather catering to the calls of hotel chains, disregarding small proprietors who see their revenues dwindling in the corona crisis. The mayor counters that the tourist lull in a pandemic is the best time to put this segment in order.

The Ministry is wary of the proposal

The Ministry of Economic Affairs, however, considers that short-term accommodation services are already well regulated by law as most of the rental space is owned by companies, not individuals, for tax reasons.

"If someone thinks that this proposal could improve the tenants' behavior, we find that getting the approval of the apartment association does not solve the problem. We definitely don't want to create a situation where residents can no longer rent apartments for living. This, in turn, will cause a rise in prices for Tallinn residents," Kristi Talving, Undersecretary of the Ministry of Economic Affairs for the Internal Market, tells ERR.