EU to help cities tighten screws on Airbnb, holiday rentals

EU to aid towns in tightening regulations on short-term rentals

European cities will receive greater freedom to regulate short-term rentals like Airbnb, as part of an affordable housing initiative unveiled by the European Union on Wednesday. The European Commission will set out conditions under which local authorities can impose limits on short-term lets, addressing what EU chief Ursula von der Leyen has described as a social crisis.

Nurses, teachers, and firefighters are finding it increasingly difficult to afford housing in their service areas, while students are dropping out due to unaffordable rents. Young people are delaying starting families, according to von der Leyen.

Short-term rentals have been blamed by residents in popular travel destinations for displacing long-term renters and driving up prices. While short-term rentals account for only about 1.2% of the EU's housing stock, their share can reach up to 20% in popular districts of some tourist areas.

Cities worldwide have imposed or considered restrictions on holiday rentals, but these measures have often been challenged in court by rental providers and tourism operators, creating legal uncertainty. The Affordable Housing Act aims to provide cities with legal cover for taking action without violating EU single market rules.

Under the draft, cities and other relevant authorities will be allowed to limit holiday rentals and the purchase of property for short-term letting in areas deemed to be under housing stress. Population dynamics, future housing supply and demand will also be considered when defining an area as under stress.

The legislation will not affect landlords who rent out their primary residence for short periods. Housing affordability has become a growing issue across the 27-nation bloc, with property prices surging by 60% and rents climbing by 20% over the past decade.

The EU argues that short-term rentals, which make up a small portion of the EU's housing stock, can exacerbate housing demand pressures in certain local markets. However, rental providers dispute the claim that short-term rentals are driving housing stress in most cities.