An administrative court in Germany’s capital has upheld the provincial government’s decision to restrict private property rentals through websites like Airbnb in a move expected to bolster a hotel industry concerned about the rise of the sharing economy.

The new rules, known as Zweckentfremdungsverbot (‘Ban on wrongful use’), came into force in May with the intention of combatting the rising cost of renting and a housing shortage in Berlin, with steep fines for those that rent out more than half a property for a short period of time.

The case had been brought by four property managers who claimed the law violated their constitutional right to professional freedom – an argument rejected by the court.