EU proposes rules to curb short-term rentals in housing hotspots
Sep 21, 2026
Category: EU European Commission News Policy Tourism
Cities across Europe could gain firmer legal grounds to limit short-term rentals under an Affordable Housing Act proposed by the European Commission.
The act would create a common EU framework for restricting holiday lets in areas under housing pressure, replacing a patchwork of local rules that have triggered legal challenges in cities including Paris, Barcelona, Berlin and Venice.
Housing policy would remain a national responsibility. The framework would instead clarify when local authorities can restrict short-term rentals without breaching EU single market rules.
The proposal still needs approval from member states and the European Parliament. Airbnb shares fell about 3% in morning trading that day.
Backup from Brussels
Commission President Ursula von der Leyen linked the proposal to an earlier pledge. “A year ago, I promised to tackle Europe’s housing affordability,” she said.
“Today, we are taking one step in this direction,” she continued, noting that essential workers and students increasingly struggle to afford homes “where they serve and study”.
Commission Vice-President Teresa Ribera called the situation a “terrible crisis”. “When the market fails to deliver something as fundamental as an affordable home, public authorities have a responsibility to act,” she argued.
Stress test for neighbourhoods
Authorities would identify “areas under housing stress” using common criteria, such as high price-to-income ratios or sharp price increases over the past 10 years.
Restrictions would have to be evidence-based, necessary and limited to affected areas. They could not apply retroactively.
Cities would also need to show that short-term rentals had significantly harmed housing affordability or availability for at least three years. Qualifying areas could then restrict holiday lets and property purchases intended for short-term rental use.
People who occasionally rent out their primary residence would be exempt. The Commission also recommended releasing more land for housing and modernising planning and construction rules.
Small share, big shadow
Short-term rentals account for 1.2% of EU homes, but their share reaches 20% in some tourism hotspots.
The Commission’s Joint Research Centre (JRC) highlights Sorrento, Dubrovnik and Fuerteventura. Across the EU, house prices rose 64.9% between 2015 and 2025, while rents increased 21.8%.
For households unable to buy, rent can consume 40% of income. Half of European city residents identify housing as an urgent problem, according to Eurobarometer data.
Residents in cities including Lisbon, Barcelona and Prague argue that platforms such as Airbnb have reduced long-term housing supply and pushed up prices.
The JRC attributes rising housing costs mainly to supply failing to keep pace with demand, partly because of planning constraints. It also found a link between short-term rentals and higher housing costs, particularly sale prices.
Courtroom check-ins
Amsterdam, Brussels, Florence and Paris are among the cities that have introduced licensing systems or limits on rental nights. Barcelona plans to phase out tourist apartment rentals by 2028.
Landlords and tourism operators have challenged many such measures under EU rules on the freedom to provide services.
Florence introduced short-term rental licences and froze new listings in its historic centre in 2025. Twelve appeals followed, although Tuscany’s regional tribunal backed the council’s decision at the first level of review.
The city has since extended its moratorium to 44% of its housing stock. “Whatever we do [to curb holiday rentals], an appeal comes,” noted tourism councillor Jacopo Vicini.
In 2020, the EU’s top court upheld local restrictions justified by housing shortages, provided they were proportionate. French property lawyer Lorène Derhy said uncertainty over proportionality leaves cities with “recognised competence [but] permanent insecurity”.
Authorities with limited legal resources, she warned, “adopt rules short of what the law would allow them, simply for fear of challenge”.
Paper tigers and guardrails
CCIA Europe, which represents Airbnb among other companies, argues that the proposal lacks independent scrutiny.
“Europe will not solve its housing crisis by giving cities an EU framework to restrict short-term rentals and then letting them police their own compliance,” head of policy Alexandre Roure stated.
“Without independent scrutiny or effective redress, this proposal will remain a paper tiger,” he added.
Airbnb also criticised the draft. “Airbnb shares the Commission’s ambition to make housing more affordable. But as drafted, the Affordable Housing Act will not add a single home to the long term rental market, while adding regulatory uncertainty for hosts across European cities,” the company said.
EU government affairs chief George Mavros called for stronger safeguards. “The Act sets out the right principles. It now needs to include real guardrails that turn them into certainty for the hosts, guests and small businesses who depend on this activity,” he insisted.
Airbnb wants the final law to distinguish large commercial operators from people occasionally renting second homes. It also wants existing restrictions reviewed against the new framework and for proposed measures to be notified to the Commission before adoption.
The company cites a 2023 Oxford Economics report estimating that short-term rentals generate more than €149 billion in economic impact and support over 2 million EU jobs.
Bricks versus bookings
The rental industry argues that Europe’s housing shortage is primarily a supply problem.
“That means focusing it where the shortage actually is: construction, renovation, and the homes standing empty across Europe today,” Mavros explained.
Airbnb points to Eurostat figures showing roughly one in five EU dwellings is vacant. The European Holiday Home Association similarly argues that although short-term rentals “may play a role, there are significantly bigger problems”.
Local authorities counter that holiday lets worsen shortages in heavily visited areas. Brussels estimates the EU needs more than 2 million new homes each year.
Home truths ahead
The act would replace much of the current case-by-case legal uncertainty with a common EU test for when short-term rental restrictions are permitted.
For cities such as Florence, clearer housing-stress criteria could strengthen the legal basis for local action. However, requirements covering 10-year price trends and three years of rental impact may be easier for authorities with stronger data and legal resources to meet.
With short-term rentals accounting for 1.2% of EU homes and the bloc needing more than 2 million new homes annually, the proposal targets local housing pressure rather than Europe’s wider supply shortage.
Member states and the European Parliament will now negotiate the text. Unresolved issues include independent review, how the ban on retroactive measures would affect existing rules such as Florence’s moratorium and Barcelona’s 2028 phase-out, and whether local authorities choose to use the framework at all.