REGULATION OF SHORT-TERM HOUSING RENTALS IN SPAIN 703 3.3. The CNMC’s Advocacy The CNMC recently advocated improvements to regulation on short-term housing rentals. The regional Spanish competition authorities, together with the CNMC, have also advocated the need to adjust regulation of short-term housing rentals to the principles of efficient economic regulation38. The Catalan, Basque, Andalusian and Valencian Competition Authorities have published studies and reports with a similar approach to the CNMC. The CNMC’s advocacy has combined policy recommendations with Court challenges where the former were not sufficient in preventing the most detrimental restrictions to competition and consumer welfare. In 2014, the Advocacy Department of the CNMC launched a public consultation on New Service Provision Models and the Sharing Economy39. After this consultation, the CNMC published several regulatory reports40 and one comprehensive market study. The highly restrictive nature of some regional regulations soon led the CNMC to use its position and challenge regulation in court. Between 2015 and 2018, the CNMC challenged four regional decrees41 and three local provisions42 for breaching the principles of necessity and proportionality. The Courts have so far been mostly supportive of the CNMC’s claims43. In 2016, the High Court of Madrid ruled in favour of the CNMC and quashed regional prohibition of short-term rentals that are booked for less than 5 consecutive days44. In 2017, the High Court of Canarias confirmed most of the CNMC’s arguments and decided to override three provisions of the contested Decree: the ban on short-term housing rentals in touristic areas, the prohibition to rent individual rooms and the obligation to register before commencing 38 Eight Spanish regions have regional competition authorities: Andalusia, Aragon, Basque Country, Castile and León, Catalonia, Extremadura, Galicia and Valencia. These regional competition authorities have advocacy powers similar to the CNMC. 39 See: https://www.cnmc.es/ambitos-de-actuacion/promocion-de-la-competencia/consultas-publicas# economia -colaborativa, where a compilation of the replies received to the consultation is also available. 40 The CNMC has adopted four regulatory reports on draft regional regulation: see CNMC (2015a, (2017, 2018e, 2019). For example, in April 2015, the report on a draft Decree for short-term housing rentals in the Region of Aragón objected to the prohibition of renting individual rooms, the maximum length of rentals, the technical requirements and maximum capacity of properties, and the obligations to register and external display of identification of the properties (CNMC, 2015a). 41 In the Regions of Madrid (Decree 79/2014, of 10 July), the Canary Islands (Decree 113/2015, of 22 May), Galicia (Decree 12/2017, of 26 January) and Castile and León (Decree 3/2017, of 16 February). 42 Urban planning regulations in the cities of Madrid, Bilbao and San Sebastian. 43 Ruling of the High Court of Castile and León of 2 February 2018 No. 64/2018 in Ordinary Proceedings No. 231/2017. 44 Ruling of the High Court of Madrid of 31 May 2016 No. 291/2016 in Ordinary Proceedings No. 65/2015.
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