EU moves to curb Airbnb-style rentals to boost long-term housing

The European Union has introduced a plan to address affordable housing shortages and promote long-term rentals across the continent. The initiative, unveiled on Wednesday, aims to provide clarity and consistency in how local authorities enforce rules, especially in tourist-heavy neighborhoods where short-term rentals have led to the displacement of residents.

European Commission President Ursula von der Leyen emphasized the importance of this issue, stating that housing affordability is a concern for many Europeans, particularly essential workers and students who cannot afford to live where they work and study.

Most importantly, the plan underscores the principle of fairness, with the Commission striving to benefit all Europeans. While housing policy remains under national jurisdiction, the new Commission plan provides a common European framework to guide implementation at the local level. To identify areas facing housing stress, authorities must use a standardized methodology, according to a Commission press release.

When authorities decide to restrict housing use, such as for short-term rentals or vacant properties, they must demonstrate that the restriction contributes to local housing pressures and ensure that the measures are targeted, necessary, and proportionate.

The housing situation in Europe is worsening, as highlighted by recent Eurobarometer data. Fifty percent of European city dwellers believe housing is a pressing problem they face, and house prices have surged faster than local incomes in most European capitals, increasing by 64.9% between 2015 and 2025. Rents have also risen by 21.8%, according to EU data.

Even those who cannot afford to buy are experiencing rising rents, consuming 40% of household income, and middle-class families find themselves unable to afford buying or renting, yet ineligible for social housing.

Many residents in cities like Lisbon, Barcelona, and Prague complain that short-term rental platforms like Airbnb have removed homes from the market and driven up prices, often compelling them to relocate. Short-term rentals constitute only 1.2% of the EU's total housing stock but can account for up to 20% in some popular tourist destinations. With insufficient new housing being built where demand is highest, Brussels estimates that over 2 million new homes are needed annually to tackle the issue.

Airbnb, the leading global platform for short-term rentals, criticized the plan as insufficiently clear. While acknowledging the Commission's ambition to enhance housing affordability, the company argued that the Affordable Housing Act will not add a single home to the long-term rental market while introducing regulatory uncertainty for hosts across European cities. The plan now awaits negotiation by EU co-legislators before approval.