The European Commission has stepped into one of the continent's most pressing social issues: the shortage of affordable housing. On Wednesday, it unveiled a plan designed to support long-term rentals and give local authorities clearer tools to manage the explosive growth of short-term letting platforms such as Airbnb, particularly in neighbourhoods where tourism has squeezed out residents.
Presented as part of a broader affordable housing initiative, the proposal aims to create a common European framework for how cities can respond to housing stress. While housing policy remains a national competence, the Commission wants to harmonise the way local rules are applied, especially in areas where short-term rentals have become a flashpoint.
“Lack of affordable housing is a matter of concern for so many of our European citizens,” said European Commission President Ursula von der Leyen. “Essential workers and students cannot afford to live where they serve and study. But most importantly, it is about fairness. Today, we are delivering for all Europeans.”
The plan introduces a shared methodology for identifying “areas under housing stress”. Where authorities decide to restrict the use of housing—for instance, by limiting short-term rentals or penalising vacant dwellings—they will need to demonstrate that such measures are targeted, necessary, and proportionate to local pressures.
Housing crisis deepens across the EU
The Commission's intervention comes as data paints a bleak picture of housing affordability. According to a recent Eurobarometer survey, half of European city dwellers consider housing an urgent problem. Between 2015 and 2025, house prices across EU capitals rose by 64.9%, while rents increased by 21.8%—far outpacing income growth.
Rents now consume, on average, 40% of household income in many cities. Middle-class families are increasingly caught in a trap: they earn too much to qualify for social housing but cannot afford market rates. In cities like Lisbon, Barcelona, and Prague, residents blame platforms like Airbnb for removing homes from the long-term market and inflating prices.
Short-term rentals account for just 1.2% of the EU's total housing stock, but in some tourism hotspots they represent up to 20% of available homes. With construction failing to keep pace with demand, the Commission estimates that Europe needs more than two million new homes each year to close the gap.
The plan has drawn immediate criticism from Airbnb, the world's largest short-term rental platform. In a statement, the company said it shares the Commission's ambition to make housing more affordable, but argued that “as drafted, the Affordable Housing Act will not add a single home to the long term rental market, while adding regulatory uncertainty for hosts across European cities.”
Brussels insists the framework is designed to give cities the flexibility they need while ensuring that any restrictions are evidence-based. The Commission points to recent moves to empower cities as a sign that it is serious about tackling the issue at the local level.
Some member states are already experimenting with their own solutions. Spain's CASA 47 portal aims to expand public housing supply, while other governments are exploring innovative construction methods, such as timber buildings, to speed up delivery.
The Commission's plan is not a binding regulation but a set of guidelines that national and local authorities can adopt. It remains to be seen whether it will translate into tangible change on the ground, or whether it will simply add another layer of paperwork for city officials already struggling with the housing crunch.
