The European Union is preparing to give cities and regions new powers to curb short-term rentals such as Airbnb as part of a wider drive to tackle soaring housing costs; the measures form part of the European Commission’s Affordable Housing Act.
Under the proposed framework, EU-wide rules will help determine when an area is facing serious housing stress. National, regional and local authorities would then have legal backing to introduce targeted measures to address shortages.
Energy and Housing Commissioner Dan Jørgensen said short-term rentals were not the main cause of Europe’s housing crisis. However, he said they were making the problem worse in some of the bloc’s largest cities and tourist hotspots.
“Short-term rentals are not the cause of Europe’s housing crisis,” Jørgensen said. “But it’s very clear that in some parts of Europe, especially in some of our biggest cities, they are aggravating the problem.”
How the Affordable Housing Act would work
The framework has two main elements. One focuses on legislation, while the other aims to address the underlying shortage of homes.
EU regulation
The proposed EU regulation would establish a common method for identifying “areas under housing stress”.
Authorities would consider factors such as the gap between local incomes and property or rental prices. Areas where housing costs continue to move further beyond what local residents can afford could qualify.
Commission recommendation
A separate Commission recommendation would encourage national governments to increase the supply of public, social and student housing.
The aim is to tackle the structural shortage of homes rather than relying solely on restrictions.
New safeguards for short-term rental restrictions
The proposed rules would also place limits on how local authorities use their new powers.
If a city or region wants to restrict non-primary housing uses, such as preventing a property from being listed on an online booking platform, it would have to meet several conditions.
- Housing stress must be demonstrated. Authorities would need to show an ongoing negative impact on housing availability or affordability for at least three years.
- Restrictions must be proportionate. Local governments would have to demonstrate that less restrictive measures would not be effective in protecting the long-term residential housing supply.
- Restrictions would be time-limited. Measures would need regular reviews and could remain in place for no more than five years.
- Building homes remains essential. Restrictions on short-term rentals could not become a permanent replacement for constructing or renovating housing.
Housing crisis needs more than Airbnb restrictions
The Affordable Housing Act is not intended to provide a single solution to Europe’s housing crisis.
Jørgensen said the bloc also needed to address investment, planning rules, housing supply and pressure on existing homes.
The legislation follows comments by Commission President Ursula von der Leyen almost a year ago, when she described Europe’s housing shortage as a “social crisis” and pledged action.
Jørgensen described the new act as a key step for cities, regions and countries seeking immediate solutions for the areas and people most affected.
But he acknowledged that much more would be needed.
“The housing crisis is a complex issue,” he said, pointing to the need for action on investment, simpler rules, new supply and pressure on existing housing stock.
For property investors and short-term rental operators, the proposed rules could mark a significant shift in how European cities regulate holiday and temporary accommodation.
For renters and prospective homeowners, the bigger question will be whether returning homes to the long-term market can make housing more affordable.
