Housing: a central EU policy priority

According to a Eurobarometer survey, more than 50 per cent of city dwellers regard housing as an urgent issue. One reason for the tight housing markets in larger cities is the rise in short-term rentals via platforms such as Airbnb: estimates suggest that their number has almost doubled between 2018 and 2024. By the 2024 EU Parliament elections, the housing crisis had become a key issue in Brussels. Dan Jørgensen was appointed the first EU Commissioner for Energy and Housing, while the Special Committee on the Housing Crisis in the European Union (HOUS) was set up in the European Parliament. As early as December 2025, the EU Commission presented its European Affordable Housing Plan,  which sets out measures to create housing, mobilise investment, mitigate the impact of short-term rentals and protect those particularly affected by the housing crisis. In March 2026, the EU Parliament adopted the final report of the Special Committee on the Housing Crisis in the European Union, which calls for, amongst other, construction and renovation measures, improved energy efficiency, stronger tenant protection and a more balanced approach to short-term tourist rentals.

EU Commission seeks stronger legal certainty

The EU Commission developed its Affordable Housing Act over recent months in consultation with stakeholders. The draft legislation focuses on short-term rentals and the use of residential property for purposes other than as a main residence. The draft legislation is intended to provide legal certainty for local authorities should they decide to restrict short-term rentals. In recent years, caps or restrictions have often been challenged in court. The proposal safeguards the rules of the EU single market and upholds the principle of subsidiarity. Housing policy falls within the remit of the Member States. Alongside the draft legislation, the EU Commission issued a recommendation urging local authorities to accelerate social housing development, make better use of existing buildings and simplify the planning permission process.

Indicators for recognising ‘areas experiencing housing stress’

The draft bill stipulates that, before imposing restrictions on short-term rentals, local authorities must demonstrate that such rentals have had a significant negative impact on the local housing market over the past three years. Otherwise, alternative housing policy measures must be considered. Criteria for imposing restrictions include the house-price trends relative to income, the number of people seeking accommodation, and housing availability. In “areas under housing stress”, caps may be imposed on holiday rentals. These restrictions apply for a maximum of five years and only to commercial providers – not to individuals wishing to let out their own property. In addition to restricting short-term rentals, the draft legislation also sets out a clearer framework for measures to tackle vacant properties and restrict second homes. The proposed legislation will now be debated in the EU Parliament and the Council.

An initial step towards affordable housing and greater local authority powers

The introduction of the Affordable Housing Act has generally been welcomed but has also been criticised for lacking ambition. SPÖ EU delegation leader Andreas Schieder, S&D spokesperson on housing in the EU Parliament and the only Austrian member of the HOUS Special Committee, sees the proposed legislation as an important first step in the fight for affordable housing and greater legal certainty for municipalities. Nonetheless, he calls for additional funding for affordable housing and renovation. The city network Eurocities supports a stronger role for cities in tackling short-term rentals. However, it remains unclear which authority will be responsible in future for proving that a housing market is under pressure.

The European Trade Union Confederation believes the Affordable Housing Act does not go far enough: it contains neither additional funding for social housing nor proposals for rent controls or a commitment to tackling speculation. Some progressive voices in the EU Parliament echo this sentiment: The Affordable Housing Act fails to identify financialisation as the cause of the housing crisis, and the hurdles for restricting short-term rentals are too high for municipalities. Liberal and conservative forces, on the other hand, criticised the draft legislation during the initial debate in the EU Parliament for overlooking the actual problem—namely, the shortage of available housing. Among other things, they argue that there is a need to reduce bureaucratic hurdles in the building permit process and provide more financial support, especially for young people.

Further information

EU Commission: New EU rules to help local authorities tackle the housing crisis
AK EUROPA: New special committees in the EU-Parliament. Impetus for affordable housing and the protection of democracy
AK EUROPA: Housing crisis in Europe. Draft report causes discontent in the EU Parliament
AK EUROPA: Affordable housing in Europe. EU is focusing on cooperation and joint solutions
Socialists and Democrats: Affordable Housing Act equips mayors to tackle short-term rental crisis  
Eurocities: Cities back European Affordable Housing Act, but need more powers to protect neighbourhoods
ETUC: Message from the European Trade Union Confederation ahead of the 2026 State of the Union address