"Tourists Raise Housing Costs, Fuel Shortage"... EU to Impose Strict Limits on Short-Term Rentals

EU Commission Set to Unveil Draft Regulation for Short-Term Rentals Soon

Short-Term Rentals in the Bloc Have Surged 93% in Six Years

Airbnb Responds: "Expanding Supply Is the Real Solution"

The European Union (EU) is preparing a legal mechanism that will allow cities to directly block short-term rentals for tourists, including Airbnb.

Photo to help understand the article showing tourists visiting Madrid, Spain. Photo by Reuters-Yonhap News

On September 4 (local time), Yonhap News, citing AFP, reported, "The European Commission is creating a new legal instrument that will enable European cities to restrict short-term rental services in response to a severe housing shortage, and plans to unveil a draft bill outlining these regulations on September 9."

According to the European Commission, short-term rentals within the EU increased by 93% between 2018 and 2024. Eurostat data also shows that, last year, the number of nights booked via Airbnb, Booking.com, and Expedia in the EU reached 951.6 million, which is 32.4% higher than in 2023. France, Spain, and Italy accounted for 56.8% of all bookings, with Paris leading all cities with 26.3 million nights.

Residents of cities with tens of millions of tourists annually, such as Barcelona in Spain and Florence in Italy, have been voicing concerns that the proliferation of short-term rental housing is driving up prices and making it increasingly difficult to find a place to live. In June last year, under the leadership of the 'Southern European Anti-Tourism Network', simultaneous protests against the tourism industry were held in major cities across Spain, Italy, and Portugal.

As public discontent grew, local authorities tried to strengthen regulations but were effectively restrained. The opposition of rental operators and the tourism industry, as well as legal uncertainty over whether such regulation would conflict with EU single market rules, tied their hands. Currently, Barcelona maintains the strictest regulations. In 2024, Barcelona Mayor Jaume Collboni announced that the city will not renew any permits for approximately 10,000 tourist apartments after they expire in November 2028. The aim is to convert all of these houses from short-term rentals back into residential use.

The platform Airbnb, which provides accommodation sharing services. Reuters Yonhap News

Nevertheless, the EU acted because such individual measures alone proved insufficient. Over the past decade, real estate prices in the EU have risen by 60% and rents by more than 20%, leaving millions struggling with housing shortages. As housing prices surged in most major countries, the pressure for an EU-level solution also increased.

This regulation is part of the 'Affordable Housing Act' that the European Commission unveiled as a solution in December last year. The draft includes provisions allowing authorities to restrict the use or offering of short-term rentals and to block real estate purchases aimed at such rentals, if a particular area is assessed as facing a ‘housing supply pressure’ situation. National and local governments will be able to designate 'housing shortage' areas directly, based on indicators such as the price-to-income ratio for local residents.

Specific criteria must be met in order to impose such restrictions. According to EU-specialist media Euractiv, headquartered in Brussels, "A clause was included stating that regulators can only introduce such policies if it is proven that short-term rentals have contributed to higher housing costs for at least the past three years." In addition, homeowners who rent out their own residences on a temporary basis are exempt from these restrictions.

The industry questions whether the regulations will have the intended effect. The Barcelona Tourist Apartments Association (APARTUR) has argued that tourist apartments account for only 0.77% of the city’s total housing and that removing these units would not solve the housing problem. Airbnb likewise stated, "Europe's housing crisis requires structural solutions and should focus on increasing housing supply."

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