The European Commission's Affordable Housing Act won approval from the College of Commissioners on Wednesday, handing national and local authorities a legal framework to restrict short-term tourist lets in housing markets deemed "tight". The legislation arrives after years of city-level bans in Barcelona, Amsterdam, Florence and Paris that triggered protracted legal battles with property owners and platforms such as Airbnb.

A tiny EU-wide share that masks extreme local concentration

Registered short-term rentals represent roughly 1.2% of the EU's total housing stock, according to Commission figures. But that average obscures a stark disparity. In tourist magnets the share climbs sharply: AirDNA data cited by the Commission shows Paris hosted about 60,000 active listings last year, while short-term lets made up nearly 40% of the available rental stock in central Porto and up to 56% of long-term rental supply in some Madrid neighbourhoods.

Dan Jørgensen, the Danish Commissioner for Energy and Housing, acknowledged the discrepancy in a briefing to POLITICO. "Short-term rentals are not the cause of the housing crisis in Europe," he said. "But it is very clear that in certain regions of Europe, notably in some of our largest cities, they aggravate the problem." The distinction matters: the Act does not target the sector EU-wide but empowers action where the data shows displacement of residents.

Cities that moved early faced years in court

Barcelona's city council voted to phase out its roughly 10,000 licensed tourist apartments by 2028. Amsterdam capped rental nights and banned new permits in the centre. Florence introduced a licensing system. Paris imposed registration numbers and a 120-night annual limit. Each measure drew litigation. Property owners and tourism operators sued Florence over its restrictions. Airbnb contested a €64 million fine from Spain for hosting unlicensed listings. Both challenges failed, but only after years of proceedings that drained municipal resources.

The Commission's new law is designed to short-circuit that dynamic. By establishing a common EU methodology for defining a "tight" market, where housing supply falls short of demand, the Act gives local authorities a shield against legal challenge when they impose caps, licensing requirements or outright bans on tourist lets in those zones.

Legal cover, not a Brussels mandate

Jørgensen was at pains to frame the legislation as enabling rather than prescriptive. "The objective is not to impose restrictions from Brussels," he said. "But access to housing is one of Europe's most urgent challenges, and the European institutions cannot close their eyes to the very concrete daily problems our citizens face." Under the Act, national, regional and local governments decide which areas qualify as tight and what measures to apply. The Commission provides the legal basis; the political choice remains local.

Industry warnings on tourism revenue and property rights

The short-term rental sector argues that restrictions threaten tourism-dependent economies and the income of property owners who rely on holiday lets. Platform representatives have warned that blanket caps could reduce visitor spending and shift demand to unregulated, informal markets. Jørgensen dismissed the tourism revenue argument as secondary. "Housing is a right, not just a commodity," he said. "People must come before profits." He also rejected the claim that the Commission is overstepping its limited competence in housing policy, noting that the Act leaves all substantive decisions to member states and municipalities.

From 'social crisis' label to legislative tool

The Act follows von der Leyen's characterisation of the EU housing shortage as a "social crisis" in her 2025 State of the Union address. That framing elevated housing from a sectoral issue to a political priority, unlocking Commission workstreams on investment, construction regulation and existing stock utilisation. Jørgensen described the Affordable Housing Act as "a decisive step to support cities, regions and countries that want to bring immediate solutions to the areas and populations most affected" while cautioning that it is "not a panacea".

Implementation now shifts to capitals and town halls

The Act enters force 20 days after publication in the Official Journal. Member states then have 18 months to transpose the tight-market definition and enforcement powers into national law. The first test will be how many cities formally designate neighbourhoods as tight and what measures they adopt, night caps, licence moratoriums, or Barcelona-style phase-outs. The Commission will monitor uptake and may propose tighter EU-wide rules if fragmentation persists. For now, the legal risk has shifted: a mayor restricting Airbnb in a designated tight zone stands on firmer ground than one acting alone.

People mentioned

Organisations

European Commission · Airbnb · AirDNA