The European Commission has proposed rules allowing cities across the European Union to restrict short-term housing rentals on platforms such as Airbnb. The measure is designed to combat a growing shortage of affordable housing caused by the expansion of tourist accommodations in popular urban centers.
Under the proposal, local authorities in EU member states will be granted the power to identify specific districts experiencing severe housing deficits. Municipalities can designate these zones based on a high ratio of housing prices to local incomes or a sustained upward trend in housing costs over the past ten years.
To implement restrictions on short-term rentals, local governments must present factual evidence showing that tourist leasing has significantly impaired housing affordability for at least three consecutive years. Any limits introduced must be targeted and proportional, remain in place for no longer than five years, and undergo regular review.
Legal framework for tourist rental limits
The initiative by the European Commission, the executive branch of the 27-member European Union, follows widespread public dissatisfaction over housing availability. According to figures published on the European Commission website, more than 50 percent of urban residents in the EU view the lack of affordable housing as an urgent issue. The shortage has become severe enough that residents in several cities have taken to the streets in protest.
In several major European tourist centers, including Paris, Barcelona, and Venice, municipal governments had previously introduced independent restrictions on short-term property listings. However, those local measures frequently led to legal challenges in court. The European Commission stated that its new proposal will establish a unified legal framework for municipalities seeking to enforce such limits.
Airbnb, an online marketplace for short-term homestays and vacation rentals based in San Francisco, and similar listing services could face new operating constraints across the trade bloc once the rules take effect, according to a report by Reuters.
Housing supply recommendations and financing
Alongside the proposed rental restrictions, the European Commission recommended that EU member countries create national plans to expand housing construction. The executive body advised governments to speed up the issuance of building permits, support the repurposing and reconstruction of existing structures, and leverage both private investment and EU funding.
Efforts to address housing shortages across Europe also extend to funding initiatives outside the EU border. In August 2026, the European Investment Bank, the multilateral lending institution owned by EU member states, agreed to provide 400 million euros for affordable housing construction in Ukraine.
The European Investment Bank project will initially focus on five Ukrainian cities: Kropyvnytskyi, Kremenchuk, Lviv, Mykolaiv, and Zhytomyr.
