The EU Wants to Help Cities Lock Out Tourist Rentals

The European Union is preparing targeted legislative support for cities struggling with skyrocketing rents. Under draft plans for a forthcoming European Affordable Housing Act, Brussels intends to give municipal authorities across the bloc an explicit legal basis to curb the proliferation of short-term tourist apartments. The core objective is straightforward: turn holiday lets back into long-term homes for residents by equipping local mayors with a sturdy shield against legal challenges from property investors and online rental platforms.

For anyone searching for an affordable flat in popular European destinations, the pattern is familiar: long-term housing stocks have been steadily carved up into lucrative short-term holiday rentals. While city halls from Southern Europe to the Baltics have attempted to cap holiday lets or introduce strict licensing regimes, their measures frequently get bogged down in court battles over single-market freedom of services and property rights. By establishing a dedicated EU legal framework, Brussels aims to give local regulators the explicit backing they need to enforce limits without spending years defending their decisions before national and European courts.

Housing has traditionally been a sacred policy preserve of national and municipal governments, strictly outside the European Commission’s core remit. Yet as severe housing shortages mutate into political flashpoints across the continent, Brussels is finding ways to step into the arena by leveraging its internal market powers. The main institutional hurdle will be navigating subsidiarity—the foundational EU principle dictating that action should only be taken at the European level if local or national remedies prove insufficient. In a classic piece of institutional maneuvering, the Commission's response to a purely local issue is a central European legal framework designed to grant cities permission to do what they have been trying to do for years.

The draft proposal will have to pass through the full legislative process once formally unveiled by the Commission. It will head to the European Parliament, where MEPs will debate the scope of municipal powers, and to the Council of the EU, where member state governments will protect their own national housing competencies. The draft will eventually enter trilogues—the three-way informal negotiation rounds where representatives from the Parliament, Council, and Commission hammer out the final legal text before it can become law.