- The EU has developed a legal tool to help cities restrict short-term holiday lets
- Cities must provide evidence of severe housing shortages to use the powers
- The price-to-income ratio threshold for housing stress is set at eight
- Commercial multi-property operators are the primary target of the regulation
- The proposal will be officially presented on 9 September 2026
The European Commission has developed a legal instrument to help cities limit short-term holiday lets such as those on platforms like Airbnb, provided authorities can demonstrate adverse effects on housing availability. The measure, part of the upcoming Affordable Housing Act, aims to address housing pressures in popular destinations while balancing tourism interests. The regulation establishes clear conditions under which local authorities can intervene in the property market without violating EU single-market rules.
Cities will have the power to curb holiday lets only if they provide evidence of severe local housing shortages, with the document laying out parameters for an area to be defined as under stress. The local price-to-income ratio must meet or exceed a threshold of eight. The legal framework explicitly distinguishes between casual, primary-residence hosts and commercial investors, protecting individuals renting out their own primary home while targeting professional multi-property operators. Previously, local crackdowns in cities like Paris, Barcelona and Venice faced intense legal pushback, and the move represents an effort to give local authorities the legal shield to withstand court challenges.
Authorities will justify restrictions using data collected from online platforms like Airbnb and Booking.com under a transparency regulation that went into effect in May 2026. The European Commission acknowledges that curbing holiday rentals will not fully solve Europe’s structural housing deficit, which is also driven by high construction costs and permitting delays.
The draft proposal is scheduled for its official presentation on 9 September 2026 by European Commission Vice-President Teresa Ribera, after which it will face debate by EU member states and the European Parliament.
