EU to Regulate Short-Term Rentals in Plan to Tackle Affordable Homes Shortage
The European Union has unveiled a landmark initiative as part of its first affordable housing strategy, where the EU to regulate short-term rentals in plan to tackle affordable homes shortage figures prominently. Announced on 16 December 2025, this policy package aims to address spiralling housing costs, limited housing supply and the rapid growth of short-term rental platforms like Airbnb and Booking.com that have been blamed in many cities for exacerbating the housing affordability crisis. The Guardian
Housing affordability has become a political and social priority for the European Commission and member states as rents and property prices have soared over the last decade. The new plan is designed to offer legal frameworks to local authorities to manage and regulate short-term rentals, particularly in areas facing acute housing stress, without imposing outright bans. The Guardian
Why the EU Is Regulating Short-Term Rentals
Short-term rentals have expanded rapidly in many European urban hubs, reducing the availability of long-term housing for residents and driving up rents. Efforts to regulate these rentals under national and municipal rules have met with mixed success, prompting calls for coordinated action at the EU level to ensure consistent standards and fair housing markets across the bloc. The Guardian
Key objectives of the EU to regulate short-term rentals in plan to tackle affordable homes shortage include:
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Giving local authorities clearer legal powers to manage the impact of short-term rental platforms in high-demand locations
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Capping the number of nights a property can be rented in certain areas to preserve long-term housing stock
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Addressing speculation in property markets by monitoring trends and discouraging practices that prioritise tourist rentals over resident housing
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Complementing other housing measures such as relaxed state aid rules to boost affordable housing initiatives The Guardian
These measures are part of a broader EU strategy to alleviate housing shortages and ensure sustainable living conditions across member states.
The Housing Crisis in Context
Europe’s housing market has undergone significant strain in recent years, with average house prices and rents rising sharply relative to incomes. According to EU data, property values climbed more than 60 percent since 2010, while rents increased around 20 percent in the same period. These surging costs have priced out many young people, essential workers and low- income families from urban housing markets, raising concerns about social cohesion and economic inclusion. DutchNews.nl
A report from the European Commission’s Joint Research Centre indicates that more than two million new homes per year will be needed by 2035 to keep pace with housing demand, particularly in rapidly growing urban and coastal areas where short-term rentals are most prevalent. joint-research-centre.ec.europa.eu
The housing crisis has also contributed to increased homelessness and housing insecurity across the EU. Nearly 1.3 million people in the bloc are estimated to be homeless, surpassing the population of entire European cities and underscoring the severity of the problem. english.aawsat.com
Proposed Regulations for Short-Term Rentals
Under the EU to regulate short-term rentals in plan to tackle affordable homes shortage, the Commission intends to propose new EU-wide legislation by the end of 2026. While this framework will not outlaw short-term rentals outright, it will empower local authorities to implement context-appropriate limitations based on housing market conditions.
Possible regulatory approaches include:
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Capping nights per property in designated housing-stress areas
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Requiring registration and shared data reporting from short-term rental platforms to enhance oversight
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Strengthening neighbourhood protections to prevent displacement of long-term residents
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More stringent consumer and safety standards for hosts to align them with traditional housing providers
These tools are meant to help balance the economic benefits of tourism and rental income with the fundamental need for housing stability for residents.
For examples of how short-term rentals are already regulated in individual cities, see the overview on lodging rules across Europe:
https://en.wikipedia.org/wiki/Lodging
Reactions From Member States and Stakeholders
Responses to the EU to regulate short-term rentals in plan to tackle affordable homes shortage have been mixed across political and civil society spectrums.
Supportive Perspectives
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Social Democrats and progressive groups have welcomed the measures as a breakthrough in addressing housing scarcity and empowering municipalities to act.
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Mayors and city leaders argue that regulated short-term rentals can preserve neighbourhoods and enable better land-use planning.
European mayors, particularly from cities like Barcelona and Paris, have been vocal about their housing pressures and the need for robust regulatory tools. Barcelona, for instance, already plans to limit licensed short-term rentals dramatically by 2028 as part of its local housing strategy.
Criticisms and Concerns
Some lawmakers from Greens and centre-right parties have criticised the plan for not going far enough on investment commitments or speculation controls. Critics argue that:
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Legislative action on short-term rentals must be accompanied by deeper investment in social and affordable housing
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Stronger measures are needed to curb property speculation and financialisation of housing
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Member states should be encouraged to adopt tailored solutions that reflect local housing dynamics
Environmental and housing advocacy groups have likewise urged policymakers to consider sustainability, quality of housing stock, and long-term community resilience as part of broader housing reforms. See analysis from the European Environmental Bureau on the EU housing strategy.
Complementary Housing Measures
The EU to regulate short-term rentals in plan to tackle affordable homes shortage is just one component of a wider European Affordable Housing Plan that also includes:
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Revised state aid rules to allow member states more flexibility in supporting social and affordable housing projects
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Boosted construction strategies to increase housing supply and renovate existing stock
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Investment mobilisation through public and private funding mechanisms to stimulate affordable housing development
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Market transparency efforts to track speculative pressures and inform policy responses Employment, Social Affairs and Inclusion
The Commission is expected to host the first EU Housing Summit in 2026 to further build support and coordinate implementation efforts.
Social and Economic Implications
By proposing that the EU to regulate short-term rentals in plan to tackle affordable homes shortage, Brussels is taking a more assertive role in a policy area traditionally governed by member states. This shift reflects growing recognition that housing affordability is a Europe-wide challenge requiring collective action, especially as demographic shifts and urbanisation intensify housing demand.
Effective regulation of short-term rentals may help:
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Stabilise rental markets by preventing displacement of long-term renters
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Improve affordability for households struggling with high housing costs
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Enable essential workers to live closer to jobs, boosting local economies
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Enhance community cohesion by preserving residential character
However, successful implementation will require ongoing cooperation with national and local authorities, as well as monitoring to ensure that intended outcomes are realised without unintended market distortions.