Külli Kraner: Officials ignoring problems caused by guest apartments boom

The rapid growth of short-term rental services — which essentially amounts to the provision of accommodation, especially in Tallinn’s Old Town — has created a situation where local residents, legitimate accommodation businesses and the state itself are all suffering simultaneously.

Officials from the Ministry of Economic Affairs and Communications (MKM) have been asking the same question at meetings for nearly eight years: “What problem are we solving?” This continues even after a thorough and substantial study, completed in September 2025 at a cost of more than €100,000, clearly identified both the problems and possible solutions. Local residents and market participants had known the answer to that question eight years ago.

In addition, MKM officials tend to draft meeting summaries in a way that does not reflect the actual discussions or the positions of stakeholders. Whose interests are being served by this behavior remains unclear. What is clear, however, is that the state is losing out — an estimated €50 million in tax revenue annually. That money would have a very tangible impact on the quality of public services; for instance, it could be used to raise the salaries of teachers and healthcare workers.

Residents left to their own devices

Residents of Tallinn’s Old Town have been drawing attention for years to party noise, waste issues, a decline in safety and sense of home and the transformation of residential buildings into monofunctional “accommodation units” where permanent residents no longer have a place. Who would want to live in a building that, due to the daily turnover of neighbors, has effectively become a hotel?

Read more: ERR.EE