Tórshavn seeks government powers to regulate short-term rentals amid rising Airbnb listings in Faroe Islands

The municipality of Tórshavn is calling on the government to empower it to impose conditions and regulations on short-term rentals, such as those offered on platforms like Airbnb. This proposal received unanimous support from the city council last night.

According to the municipal authorities, several properties in the capital are listed without permanent residents, particularly in certain areas of the city, including the old town of Tórshavn. Many of these properties are rented out for shorter durations, and new apartments are also being built and purchased for short-term rental purposes.

In comparison to neighboring countries, there is currently no legislation in place governing short-term rentals. The municipality has proposed several potential solutions to address this issue. One option includes setting a cap on nightly rates or annual income to deter excessive profitability in comparison to long-term rentals.

As of late August, there were 987 rental listings on Airbnb in the Faroe Islands, a number likely higher during the summer months. Over the past five years, this figure has grown rapidly; it was just 306 listings in 2017, and reached 702 by 2022.

The municipality points out that there are no laws or regulations in the Faroe Islands related to short-term rentals on platforms like Airbnb. Additionally, local boards and homeowner associations do not set conditions for these rentals, as is common in other countries. However, the municipality has indicated that in student housing facilities operated by Bústøður in Finsen, Næmingaheimi under Fjall, and the Student Accommodation in Berjabrekka, it is not permitted to rent or sublet apartments on Airbnb or similar platforms.