The proposal for the Affordable Housing Act, presented yesterday, is designed to provide a common methodology for identifying areas under housing pressure and a framework for assessing measures that affect the use of housing. Housing policy decisions would remain with national, regional and local authorities under the principle of subsidiarity.
The Commission said the initiative responds to housing pressures that are particularly pronounced in cities, metropolitan areas, islands and popular tourist destinations. In such markets, the use of housing for purposes other than primary residence, including short-term rentals, can affect the availability and affordability of homes for long-term residents.
Under the proposed framework, authorities seeking to restrict the use of housing, including for short-term rentals, would have to demonstrate that the activity contributes to local housing pressures. Measures would also need to be targeted, necessary and proportionate.
The proposed methodology would use a range of indicators to identify areas under housing stress. These include the relationship between housing prices and disposable income, developments in the price-to-income ratio over time, population changes and housing supply and demand. The framework is intended to provide greater legal certainty for authorities introducing housing measures while safeguarding the EU Single Market.
According to the European Commission, 51% of Europeans living in cities consider housing an immediate and urgent problem in their area. The Commission has also identified the shortage of affordable housing as a structural issue affecting labour mobility, access to education and economic competitiveness.
The proposed legislation follows the EU’s existing Regulation on short-term rental data, which began applying across the European Union on 20 May 2026. The regulation establishes a common system for collecting and sharing data from short-term rental hosts and online platforms, including information that can be used by public authorities to monitor the sector and support policymaking.
The Commission’s new proposal does not impose a Europe-wide ban or mandatory restriction on short-term rentals. Instead, it establishes conditions under which competent authorities can introduce measures in areas where housing stress has been identified.
Possible measures can include restrictions on the use of housing for short-term rentals or other non-primary residential purposes. The Commission’s framework also addresses the need for transparency, proportionality and review of housing-related measures.
The proposal forms part of the broader European Affordable Housing Plan, presented by the Commission in December 2025. The plan includes measures aimed at increasing housing supply, supporting affordable and social housing, improving access to financing, simplifying planning and permitting procedures, and addressing the impact of short-term rentals in areas under housing stress.
The Commission has also proposed a recommendation accompanying the Affordable Housing Act, aimed at supporting national, regional and local authorities in increasing the supply of affordable, social and student housing and addressing structural factors contributing to housing pressure.
The proposal has already drawn responses from the short-term rental and technology sectors. Airbnb said it supported the Commission’s objective of improving housing affordability but argued that the proposed framework would create additional regulatory uncertainty for hosts. The Computer & Communications Industry Association Europe also called for stronger enforcement and independent review mechanisms for restrictions adopted by local authorities.
The European Committee of the Regions welcomed the Commission’s proposal, describing it as a framework that could provide cities and regions with greater legal certainty when addressing housing challenges, including through measures regulating short-term rentals where necessary.
The European Commission said the proposed framework is intended to balance housing affordability with the economic and tourism benefits associated with short-term rentals. The proposal will now proceed through the EU legislative process and will require consideration by the European Parliament and the Council of the European Union before it can become EU law.
Tags: European Commission short-term rentals
