Experts say it may be just a matter of time before city authorities in Brazil take action, as they have already done in New York, Los Angeles and Montreal by imposing legal restrictions on this type of rental.
When Carlos Eduardo Muzy first rented out his Rio de Janeiro beachside apartment on Airbnb in 2019, he just wanted some extra cash. What he got was a career managing some 100 properties — and a front-row seat to how the tech platform is transforming one of South America’s most famous tourist destinations.
In Rio de Janeiro's Ipanema neighborhood, there is now one Airbnb listing for every seven homes, a Reuters analysis of Airbnb data compiled by analytics firm AirDNA showed.
Since 2019, the beachfront neighborhood made famous by the bossa nova classic “Garota de Ipanema” has seen a 24% increase in listings, in line with neighboring Copacabana.
This wave has changed the rental landscape in Rio de Janeiro, causing tensions in neighborhood associations, generating new competition for hotels and creating entrepreneurs like Muzy, who charge apartment owners between 20% and 30% to manage their short-term rentals.
Like many, Muzy started out renting out his own apartment in Copacabana, but saw an opportunity when his neighbors asked him to manage theirs as well. His rental management company SuhcasaCopacabana employs 17 people and has racked up some 5 million reais (US$916,136.83) in bookings over the past 12 months.
"We basically double in size every year," he says of the number of ads his company handles.
Muzy takes bookings through short-term rental platforms like Airbnb, but has also created its own website and opened a shop in Copacabana to offer hotel-like services, such as storing luggage before check-in.
Rental management companies like Suhcasa typically hire teams to clean homes, wash linens, decorate and photograph properties, and sometimes even cover the costs of minor repairs, which are deducted from future rental income, landlords told Reuters .
The emerging market is not exempt from tensions in Rio, which echo problems in other cities where Airbnb has established a foothold.
In Mexico City, another popular Latin American destination for tourists and "digital nomads" working remotely, residents have complained that the platform drives up rental costs, prompting the government to tighten rules on short-term rentals.
Experts say it may only be a matter of time before authorities in Rio de Janeiro take action, as they have already done in New York, Los Angeles and Montreal.
"In Brazil, these things take a little longer to happen," says Leonardo Schneider, vice president of Secovi-Rio, a real estate association. "But I have no doubt that the state will intervene."
Legal restrictions on short-term rentals are a possibility, but Schneider said he believes authorities will want to tax rental management companies that now compete with hotels.
Long-term rentals take a hit
Airbnb takes accommodation concerns seriously and is willing to work with governments to establish good policies, share best practices and partner to contribute to tourism, the firm said in a statement.
The boom in short-term rentals began to take its toll on Rio de Janeiro's real estate market a few years ago, Schneider said, making it difficult to find long-term rentals in tourist-heavy neighborhoods and making life difficult for building managers.
Horacio Magalhaes, president of the Friends of Copacabana Association, a neighborhood association, went so far as to call a meeting between administrators and a local law firm to explain legal issues related to short-term rentals.
According to Magalhaes, administrators' concerns ranged from nuisances such as tourists partying on weekdays to higher utility bills and security issues in accessing buildings.
While some building managers looked for ways to ban short-term rentals, most were reluctant to curb them for fear of upsetting landlords who have come to rely on that income.
"They were just looking for guidance on how to set standards," Magalhaes explains. "The hard part is finding a balance."
