EU Affordable Housing Act: How Brussels Plans to Curb Airbnb and Second Homes

The Commission is not claiming the power to dictate housing policy across the bloc. The EU does not have direct competence to build homes or impose rent controls.

Instead, the proposed Act would define the circumstances in which national, regional and municipal authorities could restrict particular uses of residential property while remaining compatible with EU single-market, competition and anti-discrimination rules.

The mechanism is deliberately restrictive.

A city seeking to designate an area as suffering from “residential stress” would have to satisfy a two-stage test. First comes affordability. The average purchase price in the area would have to amount to at least eight years of median disposable household income, or reach a price-to-income ratio of 10 or more in circumstances where the historical requirement could be waived.

That alone would not be enough. The price-to-income ratio would also have to have risen continuously over the previous decade, while projections would need to indicate that housing pressure was unlikely to ease during the following three years.

The second hurdle is causality.

Authorities would have to provide objective evidence that short-term rentals or secondary-home acquisitions had harmed housing availability and affordability in the territory for at least three consecutive years before restrictions were introduced.

This is the part that turns the proposal from a political declaration into a regulatory methodology. A municipality would not simply be able to argue that tourism had made housing expensive. It would have to demonstrate the scale and persistence of the problem and establish a measurable connection with the forms of property use it intends to restrict.

The Commission proposes using Eurostat income data alongside Mapadomo housing-price data to establish the relevant evidence base.

From municipal bans to a European rulebook

The political importance of this approach lies partly in what it does not do.

Barcelona, Paris and Venice have already pursued different forms of intervention against tourist accommodation. Barcelona has announced plans to eliminate tourist-apartment licences by 2028, while other cities have adopted their own restrictions. The resulting landscape has been fragmented, with local authorities and platforms contesting the boundaries of municipal power.

The Affordable Housing Act would not erase those differences. It would establish a common legal architecture around them.

For cities, that changes the nature of the argument. Instead of defending a politically determined restriction against a challenge based on EU market freedoms, a municipality would be able to point to a European framework specifying the evidence required for intervention.

The proposed restrictions could include limits on the total number of short-term rentals in particular zones, freezes on new permits, targeted bans and restrictions on the acquisition or use of residential property that is not intended to serve as a primary residence.

But the measures would have to remain geographically limited to what is considered necessary. They would have to be published before taking effect, could not operate retrospectively and would face periodic review at least every five years.

That creates something closer to a European due-process model for local housing intervention than a centralised housing policy.

Why Airbnb is only part of the story

The immediate market reaction focused on the short-term rental industry. Airbnb shares fell by about 3 per cent after the announcement. Airbnb and the Computer & Communications Industry Association Europe argued that the proposal lacks independent oversight and does not address what they describe as the underlying problem: insufficient housing construction, supply and renovation.

Property owners have raised a different concern. The International Union of Property Owners has called for strong protection of property rights and warned against treating short-term rentals and secondary homes as though they were the same issue.

Those objections point to one of the proposal's most important distinctions.

The Commission is not treating every homeowner as a potential commercial operator. People who occasionally rent out their own primary residence are explicitly protected from the restrictions aimed at commercial activity.

The target is the transformation of residential property into an investment business at scale: operators with multiple units, secondary-home acquisitions and commercial short-term rental portfolios.

That distinction allows Brussels to frame the intervention around the use and economic function of property rather than ownership itself. A person's primary home remains a protected category; a portfolio of residential units operated primarily for short-term commercial returns can fall within local restrictions if the prescribed conditions are met.

It is a significant line to draw because it attempts to reconcile private property rights with the public interest in maintaining housing stock for people who actually live in a city.

The three-year problem

For municipalities, however, the same evidentiary safeguards that strengthen the legal case may make preventive action harder.

The Council of European Municipalities and Regions has welcomed the common EU legal backing but has warned that the requirement to demonstrate three years of historical causality could delay intervention.

That concern exposes a basic tension in the Commission's model.

Housing markets can deteriorate faster than statistical and legal procedures can establish causality. By the time a city can demonstrate three years of adverse effects from short-term rentals or secondary-home acquisitions, the housing market it is trying to protect may have changed substantially.

Yet removing the evidentiary requirement would recreate precisely the uncertainty the Act is designed to resolve.

The Commission is therefore trying to solve two problems simultaneously: give cities enough authority to act while preventing housing restrictions from becoming arbitrary barriers to the single market.

The result is a framework that favours measurable market failure over political discretion.

Housing policy meets the single market

The deeper shift is in the treatment of residential real estate within the European market.

The single market has generally been associated with removing barriers to the movement of capital, services and economic activity. The housing crisis introduces a different question: what happens when the commercial use of an asset undermines the availability of the social infrastructure around it?

The proposed Act gives Brussels a way to recognise that tension without abandoning the single market.

Housing remains private property. Investment remains possible. Tourism remains possible. But in designated areas where affordability and availability have deteriorated sufficiently, the commercial use of residential property could become subject to conditions.

That is a more limited intervention than central price controls, but potentially a more important precedent.

It also changes the legal calculus for digital platforms. The EU's existing Short-Term Rental Regulation already establishes registration, data sharing and listing-verification requirements. Under the proposed Act, cities would have to be implementing that framework before they could use the new powers.

For platforms, that means the regulatory architecture is no longer simply a collection of local licensing regimes. Registration and data become part of the evidentiary system through which restrictions can be justified.

For city authorities, the same data infrastructure becomes a form of legal protection.

The supply problem remains

There is a limit to what regulation can achieve.

Restricting commercial short-term rentals can affect how existing housing stock is used, but it cannot by itself create new homes. The industry’s criticism that supply, construction and renovation remain central to the crisis points to a problem outside the scope of the proposed legal mechanism.

The Commission is therefore addressing the allocation of existing housing rather than resolving the structural shortage of housing itself.

That distinction will matter as the legislation moves into negotiations. A framework that makes restrictions more legally defensible can change the incentives around tourist rentals and secondary homes, but the underlying shortage will continue to depend on construction and urban planning.

The draft now goes to the European Parliament and the Council of the European Union, where its final provisions will be negotiated before adoption. Its significance will depend not only on how the two institutions alter the text, but on whether the final framework preserves the balance between evidence, local discretion and single-market rights.