The European Union aims to lower housing costs in Europe’s most popular cities by giving local authorities tools to regulate Airbnb and other short-term rental operators. The European Commission’s draft Affordable Housing Law, set to be approved by the College of Commissioners on Wednesday, introduces new rules for identifying areas with housing shortages where supply fails to meet demand. This will provide national, regional, and local authorities with a legal framework to implement targeted measures in response to the housing deficit.
Dan Jørgensen, the European Commissioner for Energy and Housing, noted that while short-term rentals are not the sole cause of Europe’s housing crisis, they exacerbate the problem in certain regions, particularly in large cities. “When thousands of homes are removed from the housing stock in a city where there is already a shortage, we cannot pretend that this does not affect the financial affordability of housing for people and the number of available homes,” Dan Jørgensen emphasized. Officially registered short-term rentals account for only about 1.2% of the total EU housing stock, but in popular tourist destinations, this figure can reach 20%. According to AirDNA, there were about 60,000 active short-term rental listings in Paris last year. In the center of Porto, such listings accounted for nearly 40% of the available rental stock, and in some neighborhoods of Madrid, up to 56% of housing available for long-term rent.
Legal challenges and regulation
Many cities, including Barcelona, Amsterdam, Florence, and Paris, are already attempting to regulate short-term tourist rentals. Barcelona plans to phase out about 10,000 licensed tourist apartments by 2028, while Amsterdam, Florence, and Paris have introduced permit systems, rent caps, or restrictions on new short-term rental properties. At the same time, such initiatives often lead to lengthy legal disputes. Property owners and tourism industry representatives have filed lawsuits against restrictions in Florence, and Airbnb challenged a 64 million euro fine imposed by Spain. Both challenges failed, but the legal proceedings resulted in significant costs for local authorities. The new legislative initiative is intended to enable authorities to act more effectively and reduce the risk of litigation.
Tourism sector representatives criticize these plans, arguing that restrictions could harm tourism-dependent economies and property owner incomes. They also question the European Commission’s authority in the field of housing policy. In response, Dan Jørgensen stressed that “housing is a right, not just a commodity,” and that people should be more important than profits. At the same time, he emphasized that the new rules do not involve imposing restrictions directly from Brussels. It is national, regional, and local authorities that will determine which areas are housing-shortage zones, whether intervention is needed, and what specific measures to take.
Dan Jørgensen warned that ignoring the housing crisis could undermine public trust in democratic institutions and contribute to the growing influence of extremist political forces. European Commission President Ursula von der Leyen called the housing shortage in the EU a “social crisis” nearly a year ago and promised to take action.
According to Dan Jørgensen, the new law will be a “decisive step” to support cities, regions, and countries seeking to quickly help areas and people most affected by the housing crisis. At the same time, he acknowledged that this measure is not a panacea. The EU, he said, must also take action in areas of investment, simplifying rules, increasing housing supply, and reducing pressure on the existing housing stock.
Source: Politico
