EU Proposal Outlines Framework for Short-Term Rental Limits

The European Commission is outlining criteria for local authorities to cap short-term rentals in areas facing housing pressure, with protections for existing operators.

The European Commission is preparing proposals that could provide authorities with a common framework for restricting short-term rentals in areas experiencing housing pressure. This initiative, part of a forthcoming Affordable Housing Act, aims to standardize how local and national governments assess and respond to the impact of holiday rentals on housing markets across the European Union.

According to Reuters, a draft of the Act sets out specific criteria authorities could use to determine if restrictions on short-term rentals are justified. These criteria include an assessment of housing affordability, measured by the relationship between property prices and household incomes, and how this relationship has evolved over time. Population growth and trends in housing supply and demand are also factors that could be considered when establishing whether housing pressure is likely to continue.

The draft emphasizes that any restrictions introduced must be proportionate, non-discriminatory, and in the public interest. Among the measures discussed are quantitative limits on short-term rentals in areas identified as housing-stressed. Importantly, the proposals suggest that grandfathering provisions could be implemented, allowing existing operators to continue under previous regulations. The draft indicates that such measures may be more appropriate than outright restrictions on purchasing or using properties for short-term rental purposes.

This move by the European Commission follows regulatory actions already taken in several European destinations, including Barcelona, Paris, and Venice. Authorities in these cities have introduced various measures aimed at limiting the effect of holiday rentals on the local housing supply.

The Computer and Communications Industry Association Europe, an organization whose members include companies like Airbnb, has called for the Commission to monitor restrictions implemented by national and local governments. The association advocates for ensuring that proportionality requirements within any new framework are enforceable.

This proposed legislation is distinct from the EU’s short-term rental data regulation, which became effective in May 2026. That earlier regulation established requirements for registration and data sharing, designed to give public authorities better visibility into activity across various short-term rental platforms.

European Commission executive vice-president Teresa Ribera is scheduled to present the Affordable Housing Act on 9 September 2026. It is important to note that the provisions contained in the draft could change before final adoption. The proposal will require consideration by EU member states and the European Parliament before it can become law. Therefore, it does not immediately authorize or introduce new restrictions on short-term rental operators.

For hosts of jungle stays and travelers seeking unique accommodations within the EU, this framework signals a potential shift towards more regulated markets, which could lead to greater operational clarity for existing businesses or new considerations for those planning to enter the market.