The holiday flat 'Schmiede Harley' in Berlin. Berlin is restricting private property rentals through Airbnb and similar online platforms, threatening hefty fines in a controversial move meant to keep housing affordable for locals.
The holiday flat 'Schmiede Harley' in Berlin. Berlin is restricting private property rentals through Airbnb and similar online platforms, threatening hefty fines in a controversial move meant to keep housing affordable for locals. - 
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Berlin is one of the hottest tourist spots in Europe. But anyone trying to find short-term rentals in the German capital will now find it harder to do so.

There's a rental housing crunch in Berlin, and city authorities have banned property owners from offering vacation rentals, with few exceptions, in a bid to free up properties for permanent residents.

Eliza Garrison, an art history professor from Middlebury College, said she's learning about the new restrictions firsthand.

She's been spending the past year in Berlin and is expecting a visit from her sisters next month. They had a rental property lined up through Airbnb.

But last week, the host abruptly cancelled her sisters' reservation. Garrison blames the new restrictions on vacation rental properties in Berlin. Owners could face fines exceeding $100,000 for leasing properties to tourists. 

"I was just crossing my fingers that they wouldn't be affected, but indeed they were," Garrison said.

Garrison said she’s sympathetic that there’s a rental crunch in Berlin, but now her sisters are in a bind. She said her place is too small to accommodate them.

"Now I think they are going to be in a position to spend significantly more money, which they don't necessarily have, to stay somewhere else," she said.

Berlin authorities have told German media there's plenty of room in hotels and hostels to meet tourists' needs. Landlord groups disagree.

"This is not something that is good for a city which basically has an income very much related to tourism," said Stefan LaMarre, chairman of the group Apartment Allianz and proprietor of a rental management company called Berlin Lofts. 

LaMarre said he's awaiting rulings on lawsuits he's filed over the restrictions, which he hopes will scuttle the law. He said meanwhile, he'll take the risk of continuing to rent vacation properties, despite the threat of fines. 

"If I close down the whole business and chuck all my employees, I cannot start over," he said.  

Under the law, property owners can still rent out rooms in their Berlin homes to tourists, but not entire apartments. 

Some German media have reported that Airbnb is dumping a number of Berlin vacation rentals from its site to avoid fines. 

"Our mission is to allow Airbnb guests to connect with hosts who provide local and authentic experiences that make cities better places to live, work and visit," the company said in a statement. "We routinely carry out initiatives for quality purposes and adherence to this mission."

Follow Annie Baxter at @anniebaxter123