EU to give cities clearer legal tools to restrict short-term rentals in pressured housing markets

# What the EU is proposing Commission has drafted an "Affordable Housing Act" that outlines when and how cities can limit short-term rentals such as those listed on platforms like Airbnb. The stated aim is to give local authorities legal clarity to act in tourism-heavy neighbourhoods where short lets appear to intensify housing pressure.

# Which actions would be allowed Local authorities would be able to impose limits on: rental listings for holiday stays and the purchase of properties specifically for short-term letting. Those limits would apply only in areas formally designated as being under "housing stress."

The draft sets out parameters for that designation, including concrete measures such as the ratio between house prices and incomes, and analyses of population changes and expected future housing supply and demand. Any restriction must be non-discriminatory, necessary and proportionate to the problem identified.

# Who is excluded

# Scale and rationale in the draft The Commission's draft points to a broader affordability problem across the EU: prices and rents have risen substantially over the past decade, driven chiefly by insufficient housing supply. Short-term lets make up only about 1.2% of the EU's total housing stock, the draft notes, but can constitute up to 20% of housing in specific tourist districts. The rules target those concentrated local effects rather than the continental market as a whole.

# Legal and political context

The draft also acknowledges the economic role of short-term lets for some households while retaining the option for cities to act where those lets exacerbate local housing demand pressures.

# Pushback and open questions Platform providers and tech-industry lobby groups dispute the degree to which short-term rentals drive housing stress. They point to instances where restrictions coincided with higher rents or higher hotel prices and argue that supply-side solutions are necessary. The draft nevertheless frames the measures as targeted interventions where local data justify them.

Open questions that will shape the final law include how precisely "housing stress" thresholds will be calculated across different markets, how enforcement and monitoring will work at city level, and how the rules interact with existing national and local regulations.

# Practical takeaway for cities and residents Cities that can document local housing strain now have a clearer path to justify limits on tourist rentals and purchases aimed at short-term letting. Residents in tourist-heavy areas may see new local restrictions intended to preserve long-term housing, while hosts who rent out a primary residence retain flexibility under the draft.