EU Plans Rules to Help Cities Curb Tourist Rentals

The European Union is preparing to introduce rules aimed at assisting European cities in regulating short-term tourist rentals, such as those offered on Airbnb, to address rising housing costs.

The European Commission is expected to present a legal proposal next week outlining the conditions under which authorities can restrict these rentals. This initiative comes as cities like Florence and Barcelona face complaints from residents about being priced out of their housing markets by tourists. Previous attempts by cities to curb short-term rentals have often led to legal challenges from rental providers and tourism operators, creating uncertainty.

The proposed Affordable Housing Act aims to provide clarity on how authorities can implement restrictions without violating EU single market rules. Under the draft plans, cities, regions, and other authorities would be permitted to limit access to or the provision of short-term rentals, as well as property purchases for such purposes, in areas identified as being under housing stress.

The proposal includes parameters for defining housing stress, such as the disparity between house prices and local incomes. Landlords renting out their primary residence for short periods will not be affected. Housing affordability has become an issue across the 27-nation EU bloc, with property prices increasing by 60 percent and rents by 20 percent over the last decade, according to Brussels.

While the EU attributes this primarily to insufficient housing supply, it acknowledges that short-term lets exacerbate pressure in certain areas by reducing available housing and driving up prices, a point disputed by rental providers.