EU proposes new rules to curb short-term rentals and boost long-term housing supply

The European Commission on Wednesday presented an affordable housing plan intended to encourage long-term rentals and make housing more accessible across Europe. The initiative seeks to bring clarity and predictability to how local authorities apply rules on short-term rentals, particularly in tourist-heavy neighbourhoods where such rentals have pushed out residents.

Commission President Ursula von der Leyen said the lack of affordable housing is a pressing concern for many European citizens, noting that essential workers and students often cannot afford to live where they work or study. She stressed that the issue is fundamentally about fairness.

While housing policy remains a national competence, the Commission's plan introduces a common European framework to help authorities identify so-called "areas under housing stress" using a shared methodology. Where authorities choose to restrict housing use — for example limiting short-term rentals or vacant dwellings — they must demonstrate that doing so genuinely addresses local housing pressure, and any measures must be targeted, necessary and proportionate.

A worsening picture

Recent data paint a troubling picture: half of Europe's city dwellers consider housing an urgent problem. Over the past decade, house prices in European capitals have risen by nearly 65% and rents by more than 20%, far outpacing income growth. Rent now consumes up to 40% of household income for many, and a growing number of middle-class families can afford neither to buy nor to rent, while remaining ineligible for social housing.

Residents in cities such as Lisbon, Barcelona and Prague have complained that platforms like Airbnb have removed homes from the long-term market and driven up prices. Although short-term rentals make up only a small share of the EU's overall housing stock, they can account for as much as a fifth of housing in popular tourist destinations. Brussels estimates more than two million new homes are needed each year to address the shortage.

Airbnb criticised the proposal, saying it lacks clarity and would not add a single home to the long-term rental market while creating regulatory uncertainty for hosts across European cities. The plan must still be negotiated by EU lawmakers before it can take effect.