EU prepares new framework for short-term rentals, cities may restrict them in areas with housing crises

The European Union aims to adopt new rules for short-term tourist rentals offered on platforms such as Airbnb and Booking, with the goal of curbing rising housing costs and the shortage of affordable housing.

The European Commission’s initiative does not provide for a ban on these rentals across the EU. Instead, it creates a common legal framework allowing local and national authorities to intervene only in areas where short-term rentals are proven to be worsening the housing crisis.

An area may be designated as being under “housing pressure” if the average value of a home is equivalent to at least eight years of disposable income per capita, while the ratio between prices and income has worsened over the past ten years.

When buying a home requires more than ten years of income, the situation may immediately be classified as critical. The assessment must also take into account population growth, the amount of available housing and the balance between supply and demand. Authorities must also demonstrate that pressure on the market is not expected to ease over the next three years.

In areas that meet these conditions, authorities may limit the number of tourist apartments, tighten registration requirements or take measures to prevent the creation of new units. Any restriction must be justified, proportionate and temporary, and applied only in the area where the problem has been identified. The decisions will not be imposed automatically by Brussels, but will be made by cities and governments.

Airbnb opposes this approach, arguing that the crisis is mainly caused by a lack of construction and the large number of unoccupied homes. Before it can enter into force as law, the proposal must be approved by the European Parliament and the member states.