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EU proposes rules to curb short-term rentals and boost affordable housing in tourist cities
EU proposes law to let cities restrict short-term rentals amid housing shortages
The European Commission on Wednesday proposed new rules to help member states and local authorities increase affordable housing and restrict short-term rentals in tourist-heavy cities, addressing growing pressure on housing markets.
The Affordable Housing Regulation aims to provide legal certainty for public authorities to act within EU law, clarifying when restrictions on short-term rentals or vacant properties are justified. Authorities must prove such uses exacerbate housing shortages and ensure measures are targeted, necessary, and proportionate. Short-term rental activity nearly doubled between 2018 and 2024, with a 93% growth across major platforms, according to the commission. In Madrid, there are around 40 short-term rentals for every 100 long-term rental homes .
Commission President Ursula von der Leyen said the lack of affordable housing affects essential workers and students, calling it a question of fairness. “A year ago, I promised to tackle housing affordability in Europe. Today, we take a step in that direction,” she said .
The proposal introduces a common methodology to identify pressured areas, where housing costs exceed eight times the average annual income. Local authorities will retain the power to decide on specific measures, with the EU framework ensuring consistency. Commission Vice-President Teresa Ribera said the rules provide “more protection for mayors” but stopped short of mandating specific actions .
One in seven European municipalities is unaffordable for the average nurse, according to an investigation by Correctiv. The commission’s package includes non-binding recommendations, such as tax incentives for long-term residential use of vacant properties and prioritizing permits for social housing .
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