European Commission unveils rules to help cities restrict short-term tourist rentals
The European Commission is expected to unveil legislation next week that will establish clear rules allowing European cities to restrict short-term tourist rentals such as Airbnb, in response to mounting housing affordability pressures across the bloc.
The proposed Affordable Housing Act, part of a broader European Affordable Housing Plan first presented in December 2025, aims to resolve years of legal uncertainty that has followed city attempts to curb tourist lets. The legislation comes after the Commission conducted extensive consultations with Member States, regions and cities from March to early April 2026, receiving more than 300 responses to a detailed questionnaire.
According to a draft of the proposal, cities and regions would be permitted to restrict access to or provision of short-term rentals, as well as property purchases for tourist letting, in areas designated as being "under housing stress". The document establishes specific parameters for defining such areas, including the gap between house prices and local incomes.
Growing pressure on housing markets
The initiative responds to a deepening affordability crisis across the 27-nation bloc. Between 2010 and mid-2025, house prices in the EU surged by 60.5 percent while rents climbed by 28.8 percent, with some countries experiencing price increases exceeding 200 percent. A June 2025 Eurobarometer survey identified lack of affordable housing as by far the most urgent concern for Europeans living in cities.
Short-term tourist rentals have increasingly drawn scrutiny from local authorities in popular destinations such as Florence and Barcelona, where residents complain of being priced out by visitors. Florence expanded its short-term rental restrictions in May 2026 from approximately 35,600 properties in its UNESCO historic centre to over 100,000 properties across the city, nearly tripling the restricted area. Barcelona announced in June 2024 that it will not renew any of its 10,101 tourist apartment licenses when they expire in November 2028.
While the Commission acknowledges that insufficient housing supply is the primary driver of the affordability crisis, it notes that short-term lets add significant pressure in certain areas by further reducing supply and driving up prices.
Legal battles and uncertainty
Cities attempting to impose restrictions have frequently faced court challenges from rental providers and tourism operators. In 2020, the Court of Justice of the European Union ruled that housing shortages could constitute an overriding public interest reason to restrict short-term rentals, but did not fully clarify how far such restrictions could extend. Spain's Constitutional Court upheld Barcelona's authority to restrict tourist rentals in March 2025, allowing the city's phase-out plan to proceed despite legal challenges from property owners.
The new legislation builds on other recent EU regulatory action. The Short-Term Rental Data Regulation came into effect on 20 May 2026, requiring platforms to share host data with local authorities in real time to support enforcement. Enforcement actions have intensified, with a Spanish court ordering Airbnb to pay €64 million in March 2026 for 65,122 non-compliant listings.
The proposed rules will not affect landlords who rent out their own primary residence for short periods. An Airbnb spokesperson responded to the planned legislation by stating that "Europe's housing crisis needs structural solutions, and the implementation of this Act should focus on increasing the supply of homes."
The Commission maintains that the Affordable Housing Act will provide cities with clear legal grounds to take action where housing affordability has reached crisis levels, while ensuring such measures remain proportionate and within EU single market rules.
