The EU will lend a helping hand to metropolises facing a problem with short-term rentals, such as Airbnb, as it prepares new legislation with strict measures to help member states facing housing shortages.
Short-term rentals have become a field of legal wrangling between tourism businesses and local administrations seeking to ease pressures on the housing sector, with these disputes often dragging on for years and with uncertain outcomes. The upcoming EU law, known as the "Affordable Housing Act", will set out criteria that cities and regions can use to implement proportionate measures to alleviate these pressures, according to people briefed on the discussions.
While short-term rentals account for just 1.2% of the total number of homes across the EU, in some tourist destinations such as Sorrento in Italy, Dubrovnik in Croatia and Fuerteventura in the Canary Islands, holiday rentals can account for up to 20% of the total housing stock, according to the European Commission's Joint Research Centre (JRC).
Local authorities argue that vacation rentals exacerbate the housing shortage and push up prices for locals, although rental platforms dispute this argument. Cities such as Amsterdam, Berlin, Brussels, Florence, Paris and Athens have reacted in recent years by imposing measures in this direction. From limiting the number of tourist rentals through a licensing system, to limiting the number of nights for which a particular apartment can be rented.
Barcelona aims to completely abolish apartment rentals to tourists by 2028. However, many of these measures have been the subject of legal action by property owners and tourism operators, who argue that they violate the freedom to provide services protected by EU law.
"Whatever we do to limit short-term rentals, there is an appeal," Jiacopo Vicini, a city councillor in charge of tourism in Florence, told the FT. The Italian city last year introduced a licensing system for short-term rentals and imposed a moratorium on any new addition to its historic center, but faced dozens of appeals from property owners and tour operators.
The Tuscany Regional Court ruled in favour of the Florence City Council, but this is only the first level of judicial control, leaving the city exposed to further lawsuits. Since then, the city has extended the moratorium to 44% of its housing stock and is awaiting new legal appeals. Court decisions across the Union have been mixed or unclear.
In a historic case in 2020, the EU's highest court upheld local measures restricting short-term rentals on the grounds of a lack of housing, provided that the measures are proportionate.
However, what "proportional" means remains open to legal disputes, leaving cities in a state of "recognized competence but permanent uncertainty," said Lorène Derhy, a lawyer specializing in real estate law in France. This can lead authorities to adopt an overly conservative stance.
"Authorities that do not have the legal resources to secure an ambitious plan are holding back. They adopt rules that fall short of the limits allowed by law, simply for fear of being challenged," Derhy added. Vicini from Florence explained that it is "essential" that the EU "recognises the possibility" of local administrations to impose restrictions on short-term rentals, although he acknowledged that it is not possible "to establish the same regulation for all cities, as the cases differ significantly".
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