State Secretary at the Ministry of Economy, Tourism and Sport,
Matevž Frangež, will present
the Hospitality Industry Draft Act adopted today.
Thank you. The Government of the Republic of Slovenia
has adopted a new Hospitality Industry Act.
As you know, the preparation of the Act took a long time,
and we also had an intensive public debate,
during which we obtained more than 500 opinions,
as well as many intensive discussions with various stakeholders.
I'm singling out the landlords in particular.
The public debate has shown diametrically opposed views.
On the one hand from those opposed to the regulation,
who believe that it is either unnecessary
or dispute the way it is being carried out.
On the other hand, there are those in favour of the regulation,
as well as individual doubts that the regulation is not radical enough.
The key changes to the Act are:
the regulation of short-term rentals,
the relaxation of the regulation of the regular opening hours
of catering establishments,
and increasing the quality of our accommodation
through professional categorisation of higher quality categories.
Let me say that Minister Matjaž Han decided yesterday, following
an agreement with the Chamber of Craft and Small Business of Slovenia,
to withdraw the provision on the free drinking water
for the guests of catering establishments.
The regulation of short-term renting ...
Let me preface this by quoting some of the findings of a study
by the Manchester Metropolitan University
Institute of Place Management, which prepared
one of the two studies that provide
the technical basis for this regulation.
The restriction of short-term renting in Slovenia is necessary,
as the concentration of privatised housing
and the low availability of rental housing
make it difficult for vulnerable groups to access housing.
They also note that the fivefold increase in the last eight years
and the professionalisation of the activity point
to a trend of long-term exclusion of housing
from the long-term rental market,
which calls for urgent regulation to protect the affordability of housing
and to prevent disturbances in the housing market.
In this respect, a clear answer to the question
of why we are introducing the regulation of short-term rentals
is to ensure affordable housing for young Slovenian families,
to return apartments that have been built for the purpose of a home
back to their original purpose.
We have 700,000 occupied apartments in Slovenia,
91% of which are owner-occupied.
9% are rental apartments.
About a third are public rentals,
a third are market rentals,
and a third are service or staff apartments.
When we look at the third that are market rentals,
that leaves us with just over 40,000 apartments.
And here we find that 70% of these are long-term rentals,
while as much as 23% of these apartments
are short-term rentals.
So for every three long-term rental apartments
we have one short-term rental apartment.
This ratio clearly shows the need for regulation in this area.
In 2019, we had 2,500 short-term rental apartments,
in 2023, we already had 13,000 short-term rental apartments.
So a fivefold increase in five years.
In 2018, the short-term rental industry
generated a turnover of just over 66 million euros,
and in 2022, almost 175 million euros.
What's more,
as the study by Manchester Metropolitan University found,
in Slovenia, given the European trends,
in the absence of regulation, if nothing is done,
there could be a further 185% increase in this phenomenon by 2030.
It would therefore reach 300 million euros.
Opponents of the regulation say that we are excessively
interfering with their constitutional rights. We want to dispel that myth.
In the public debate, there was a widespread belief
that the state is unconstitutionally interfering with their rights,
with free economic initiative and with private property.
We would like to point out that constitutionally protected values
must be properly weighed and any interference with rights
must be regulated in a proportionate manner
by carefully weighing constitutionally protected values.
Article 74 of the Constitution of the Republic of Slovenia stipulates
that economic initiative shall be free.
But the same Article also provides that economic activity
may not be carried out contrary to the public interest,
and that acts of unfair competition are prohibited.
Article 67 of the Constitution of the Republic of Slovenia establishes
the manner in which property may be acquired and enjoyed in such a way
as to ensure its economic, social and ecological function.
Article 78 of the Constitution
provides that the state shall create opportunities
for citizens to acquire adequate housing.
The point of the regulation is to return the apartments
to permanent forms of habitation.
Due to the unaffordability of housing,
and the fact that there is a housing crisis,
the regulation is justified.
The regulation is proportionate in a way
that minimises interference with constitutionally protected rights
and eliminates negative effects with an appropriate legal basis.
The causal link between increased housing unaffordability, high prices,
the withdrawal of a significant proportion of housing
from the housing market,
and the phenomenon of short-term renting has been demonstrated
both by the study of the Centre of Business Excellence
of the Ljubljana School of Economics,
and by the aforementioned study
of the Manchester Metropolitan University
Institute for Place Management.
By regulating short-term renting, the state is creating the conditions
for mobilising the housing stock for permanent forms of housing
and shifting savings
into more productive forms of entrepreneurial investment.
There are some problems with this.
In 1994, the state
designated room letting as a clear exception.
This has so far not been time-limited,
so modernisation of the regulation in this area is urgent.
Especially since the activity has grown tremendously
since the creation of this exemption, especially after the emergence
of online platforms that have made it much easier and faster
to find rooms and conclude transactions.
As a result, we are witnessing a strong impact
on the affordability of housing, on the strain on infrastructure,
and on the economic, social and tourist
development of local communities. However,
the impact of owners in multi-apartment buildings
on the phenomenon of short-term renting
and the impact of the activities on them, their lives
and their assets remains limited.
The phenomenon and its effects vary across Slovenia.
The situation in Ljubljana, at the seaside,
or in some municipalities in the Gorenjska region
is not identical to that in other parts of the country,
so we are allowing local authorities
to choose a different restriction in accordance with their competences.
They can relax the restriction or tighten it further.
The regulation of short-term renting is aimed
at returning apartments to their primary purpose
as permanent forms of housing. The solutions allow
for the legitimate right of owners
to rent out their own property within the limits.
We take into account the specifics of each type of property
and the different regulation for one- and two-family houses
from the regulation in multi-apartment buildings,
where we have a more limiting approach,
with the clear assumption
that this phenomenon is significantly more present
in the concentrated type of housing in multi-apartment buildings.
Local communities are thus allowed
to relax or tighten the general restrictions imposed by the Act
in line with the housing and tourism development needs of their area.
The general restriction is a maximum of 60 days
of letting the apartments in multi-apartment buildings,
where a maximum of eight beds is allowed,
subject to 75% consent of the owners,
by the way, today, a 100% consent is needed,
but at the same time, the consent of all the neighbouring apartments.
On the other hand, the regulation for one- and two-family houses
is not as strict.
There, we allow a maximum of 150 days of letting,
and a maximum of 15 beds
with the consent of potential other owners.
The Government has slightly modified the regulation
from what we presented two days ago.
The restriction on status and residence has been removed.
These requirements are therefore no longer in the Act,
precisely in the hope of perhaps reaching an agreement
with the representatives of the landlords
through reasonable compromises.
As mentioned, local authorities have the possibility
to tighten or relax these restrictions.
In multi-apartment buildings,
they can opt for just 30 or up to 90 days per year,
while in one- and two-family houses,
they can opt for just 30 or up to 180 days,
i.e. half a year. By the way,
this is more generous than the previous restriction
on the status of landlords.
What can the local community do?
A municipality can set a maximum number of rented apartments
per calendar year in a general act adopted by the municipal council
for a specific area or for the whole municipality.
This decision must not be arbitrary at the will of the mayor,
but must be based on the municipality's assessment
of the state of the housing market and the need to develop tourism.
To this end, when adopting a general act,
the municipality must take into account the zoning,
the municipal planning acts in force, an analysis of the acceptable changes
with an assessment of the effects on the number and quality of visitors,
on the overall development from an environmental,
social, cultural and economic point of view,
as well as the availability of housing in the municipality
or the state of the rental market,
and finally the capacity of the municipal utilities
and public infrastructures,
including e.g. car parks in a particular neighbourhood.
Here, we want to show in a clear, graphic way,
the separate regulation for multi-apartment buildings
and one- and two-family houses.
The overall limit is 60 and 150 days respectively.
Maximum number of beds is 8 and 15 respectively.
In multi-apartment buildings, only natural persons
with the status of landlord,
while in one and two-family houses, we have decided,
also with the desire to reach reasonable compromises,
to allow all types of potential providers,
i.e. persons with the status of landlords,
sole traders, or legal entities,
while municipalities have the possibility of
the aforementioned relaxation or tightening.
As mentioned, 75% consent of the owners is required,
and full consent of all the neighbouring apartment owners.
These consents are only valid for three years.
It is very important that when an accommodation
is entered in the register,
it will also be given a special sticker,
with which apartments intended for short-term renting will be marked.
In this way, it will also be clear to other owners
that short-term renting can take place in that apartment.
The sticker will indicate that 75% consent has been obtained.
In this way, the owners will have the opportunity
to bring this to the attention of the inspectorate,
which will then check the actual existence of the consents given,
as well as the required quota.
Okay, I will not go into detail. To this end,
we are upgrading the register of accommodation establishments.
The introduction of the so-called ID number
is absolutely necessary in order to be able to
link the regulation in the Hospitality Industry Act accordingly
with the regulation on short-term rentals at European level.
With the suspension of the validity of the ID number
for exceeding the number of days allowed,
there are a few other situations predicted in the Act,
an advertisement and a reservation for a specific calendar year
on platforms such as Airbnb or Booking
will be temporarily disabled.
The Act also provides for a way of collecting the data,
as well as the possibility of direct access to this data
by the competent inspectorates,
the Surveying and Mapping Authority and so on.
The database will also be permanently linked to the building cadastre,
so it will be a fully digitised
and, as far as possible, automated digital solution,
which will enable the effective implementation
and control of the provisions of the Act.
Thank you very much. Press questions.
Please introduce yourself. -Hello, Nejc Krevs, RTV Slovenia.
On Tuesday you said
that it has to move forward and the Law has to be implemented.
You've gained 3,000 signatures and met with landlords.
Has anything changed in these two days
or could you somehow comply with the landlords
and heard them? Their main request was a public debate, extension etc.
Where did you try to adapt to find a common ground?
In the introduced solutions there are some changes
in comparison with the Tuesday's version.
We would like to reach a compromise
with the representatives of the landlords.
But the government was clear that the room for compromises is limited
with the effects that the government wants to achieve with the regulation.
To return most of those apartments in a domain of long-term lease.
We hope to achieve a decrease in rental prices
or a value of such assets
to ensure a bigger availability of housing.
Luckily, with the representatives of the landlords we have agreed upon
to prepare their solutions in the form of amendments.
For any part of the Law. And that we will meet again.
As you know, the legislation procedure is only beginning now.
Until the National Assembly completes the voting on the last amendment,
everything is still on the table.
The government want to find an agreement, if it's possible.
A possibility to achieve an agreement is limited with the objectives,
which force the government to regulate this area.
If constitutional review happens you are prepared?
The law is well-founded and endorsed by two studies.
I believe they are displaying the right to intervene
and on the other hand with a proportionate...
A proportionate arrangement.
And it gives the local community an opportunity to regulate the area
with a limitation or escalation of conditions.
We are well-prepared for a possible constitutional review.
Maybe also about water.
You've talked a lot that this is a constitutional right.
How do you answer the critics that you've complied with the caterers?
Drinking water is a constitutional right,
but you and I have to pay for this water at home.
We had to listen to the representatives
of the Chamber of Crafts and Small Business.
If something is a constitutional right it doesn't mean
that the caterers have to provide it and pay for it.
I have to say that a majority
of Slovenian caterers provides a free water
as a complimentary offering to the other catering range.
I'm sure they were angry by the intent to make it obligatory.
The fact is that it's already happening
and we are all a part of their hospitality,
so this is unfair. I think it's right that we crossed that provision out
and met the interest of Slovenian caterers.
Thank you very much.
Linda Mozetič, Info360.
My question is not about this topic, but you are the only representative
of the government today. Is there anything yet
about the consent for Marijan Papež?
Thank you for the question.
The director of the Government Communication Office can address it.
We didn't get this material. We can ask the Ministry,
what is going on and they can provide the documents.
After the press conference. -Yes, please. Thank you.
Thank you very much. -Thank you.
This is all for now. Have a nice day and goodbye.