EU proposes law to let cities restrict short-term rentals amid housing shortages
The European Commission on Tuesday proposed a Housing Law to empower cities and regions to regulate short-term rentals, aiming to ease housing shortages in high-demand areas. The draft legislation, expected to win approval on Wednesday, would provide legal backing for national, regional, and local authorities to impose targeted measures, including restrictions on short-term rentals, in areas facing housing pressure.
Short-term rentals represent about 1.2% of the EU’s total housing stock but can account for up to 20% in tourist-heavy locations, according to the Commission. In Paris, there were approximately 60,000 active short-term rental listings last year, while in central Porto, they made up nearly 40% of available rental housing. Some Madrid neighborhoods saw short-term rentals constitute 56% of the long-term rental market.
EU Energy and Housing Commissioner Dan Jörgensen said the law would allow authorities to act without fear of costly legal challenges. “Housing is a right, not just a commodity,” Jörgensen told POLITICO, adding that “people must come before profit.” He dismissed industry concerns that restrictions could harm tourism-dependent economies or property owners reliant on rental income.
The proposal does not mandate uniform EU-wide restrictions. Instead, it establishes a common framework for assessing housing pressure, leaving decisions on specific measures to local and regional governments. Jörgensen called the law an important step but not a complete solution to the housing crisis. Several cities, including Barcelona, Amsterdam, Florence, and Paris, have already introduced licensing systems, rental limits, or bans on new short-term accommodations, though such measures often face legal disputes.
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