EU Unveils Plan to Let Cities Restrict Airbnb Rentals in Housing-Stressed Areas

The European Commission rolled out its Affordable Housing Act on Wednesday, giving cities across the EU a legal framework to crack down on Airbnb and other short-term rental platforms in neighborhoods where housing is scarce.

Commission President Ursula von der Leyen framed it as a fairness issue. "A year ago, I promised to tackle Europe's housing affordability," she said in a statement carried by Reuters. "Today, we are taking one step in this direction... anchored in local realities." In a separate statement to Euronews, she added that "essential workers and students cannot afford to live where they serve and study."

Housing Commissioner Dan Jorgensen was more direct at a Brussels press conference, telling reporters, according to the South China Morning Post: "Short-term rentals are a part of the problem in many cities."

What the Rules Actually Do

The plan does not ban Airbnb. It lets local authorities designate "areas under housing stress" using a common EU methodology, then impose restrictions if they can show, with data, that short-term rentals are contributing to the local squeeze. Restrictions have to be targeted, proportionate, and not retroactive. People renting out a spare room in their own home occasionally are not the target.

Cities including Paris, Barcelona and Venice have already tried this on their own. Barcelona plans to phase out existing tourist-apartment licenses by 2028. But those local rules have repeatedly landed in court, and the Commission's stated goal is to give cities a legal shield against those challenges rather than invent new restrictions from Brussels.

The numbers behind the push are real. Short-term rentals make up just 1.2% of the EU's total housing stock, but in tourist hotspots that share can hit 20%, according to Commission data cited by Euronews. Guests booked nearly 952 million nights in EU short-term rentals in 2025 through platforms like Airbnb, Booking.com and Expedia, per Eurostat figures reported by Ynet News.

On broader housing costs, Euronews reported EU house prices rose 64.9% between 2015 and 2025 while rents climbed 21.8%, with rent now eating 40% of household income for many renters. Ynet News cited different figures, roughly a 60% price increase since 2010 and rents up nearly 30%, likely reflecting a different baseline period, but both point the same direction: prices are outrunning wages. A Eurobarometer survey found 50% of European city dwellers see housing affordability as an urgent problem.

Airbnb and Industry Pushback

Airbnb isn't buying the framing that vacation rentals are the culprit. George Mavros, the company's head of government affairs for the EU, wrote in a blog post cited by Global Banking and Finance that regulation should target "where the shortage actually is: construction, renovation, and the homes standing empty across Europe today." Airbnb shares fell about 3% in morning trading Wednesday, per Reuters.

The Commission's own estimate is that Europe needs more than 2 million new homes built every year to close the gap, a supply problem that restricting Airbnb licenses does nothing to fix on its own. If permitting, construction costs and vacant housing stock are the bigger drag, cracking down on tourist rentals could ease pressure in a handful of city centers while leaving the underlying shortage untouched.

The trade group CCIA Europe, which counts Airbnb among its members, raised a more technical concern: enforcement. In a statement, the group called the proposal a "paper tiger," warning that "Europe will not solve its housing crisis by giving cities an EU framework to restrict short-term rentals and then letting them police their own compliance." Alexandre Roure, CCIA Europe's head of policy, criticized the lack of independent scrutiny, noting the proposal removes short-term rental restrictions from the EU's Services Directive, the Commission's existing tool for checking whether service restrictions are proportionate. CCIA also pointed out that the EU's Short-Term Rental Data Regulation, meant to supply the evidence cities would need, only started applying in May 2026, meaning restrictions could move ahead before comparable EU-wide data even exists.

What Happens Next

The Affordable Housing Act is a proposal, not law. It still needs sign-off from the European Parliament and EU member states, a process the Commission says will play out over "the coming months." Whether lawmakers add the independent-review mechanism CCIA is demanding, or leave cities to grade their own compliance, will decide whether this becomes a real check on the housing market or another rule tied up in the same courts that killed earlier city-level bans.