The European Commission has launched a landmark initiative to address the continent's severe shortage of affordable homes, with plans to regulate the booming short-term rental market. This marks the EU's first comprehensive strategy on housing, an issue that has seen costs soar and residents priced out of cities from Barcelona to Budapest.
New Rules for Holiday Lets and Online Platforms
At the heart of the plan is a pledge to draft legislation by the end of 2026 to govern rentals via platforms like Airbnb and Booking.com. EU officials, led by the bloc's first housing commissioner, Dan Jørgensen, insist they do not intend an outright ban. Instead, the law will aim to give local authorities greater legal clarity to take "justified and proportionate measures" in areas of acute housing stress.
This move comes as cities face legal battles over their own crackdowns. Barcelona, which has been rocked by anti-tourism protests, is planning to ban apartment rentals to visitors by 2028. This Catalan decree is now subject to a legal complaint from the European Holiday Home Association, which represents Airbnb and Expedia, arguing it breaches EU law.
The forthcoming EU legislation could propose a "whitelist" of options for local governments, such as caps on the number of nights a property can be let. "We are not forcing cities or regions or member states to do these things but we are making it possible to solve these problems where they arise," Jørgensen stated.
A Crisis of Affordability and Speculation
The push for action is driven by stark statistics. Eurostat data shows that between 2010 and 2024, house prices in the EU rose by 53% and rents by 25%, far outpacing general inflation. The situation is particularly dire in cities, where almost 10% of dwellers spend over 40% of their disposable income on housing.
The crisis has wide-ranging social implications. Jørgensen warned that European democracy is at stake, stating: "If we don’t solve this issue, we risk leaving a void that extremist political forces will take." The plan also includes measures to curb property speculation, with officials pledging to analyse housing price dynamics and increase transparency around property ownership.
Mixed Reactions and Financial Pledges
The announcement has drawn a mixed response from political groups. The Socialist and Democrats (S&D) group, which made the plan a key condition for supporting Ursula von der Leyen's second term, hailed it as a "historic milestone." Leader Iratxe García Pérez called for rapid implementation "with massive investments."
However, critics like Finnish Green MEP Maria Ohisalo said the plan lacked a decisive approach to speculation, calling it merely "a framework of intentions." Meanwhile, the centre-right European People's party welcomed the focus on cutting red tape to accelerate construction.
While the EU rejected a call from Barcelona's mayor and 16 other city leaders for a €300bn-a-year pandemic-style recovery fund for housing, officials pointed to a separate pledge from European public banks. They have promised €375bn in investment for social and affordable housing by 2029.
The Commission also plans to review existing EU rules to identify where they place an "unnecessary administrative burden" on small and medium-sized housebuilding companies, as part of a broader deregulation drive.
