EU proposes Affordable Housing Law to restrict short-term rentals in tourist destinations

Airbnb and other short-term property rental companies face new restrictions in the face of the European Union's initiative to combat the shortage of affordable housing in tourist destinations.

The EU seeks to align rules across the continent after authorities in cities such as Paris, Barcelona and Venice took action against the platform.

Residents, especially young Europeans most affected by the housing crisis due to the rise in short-term vacation rentals, have also been staging protests.

The vice-president of the European Commission, Teresa Ribera, will present the Affordable Housing Law next Wednesday (9). The text will need to be debated by EU countries and the European Parliament in the coming months before it becomes law.

The proposal establishes criteria for determining what constitutes a housing shortage that would justify restrictions on short-term rentals.

Authorities "should assess real estate pressure in the area in question based on the price/income ratio and its growth over time, together with other indicators that make it possible to demonstrate that real estate pressure is unlikely to decrease in the future," the project states.

"The price/income ratio measures the affordability of housing by comparing the cost of purchasing housing with the income of the household or population expected to purchase it", states the text.

The text also says that authorities must evaluate population growth and trends in supply and demand for housing, and that any measure must be non-discriminatory, proportionate and in the public interest.

The proposal adds that quantitative limits in areas facing a housing crisis or retroactive exemption rules, which allow those already operating to continue to comply with existing regulations, may be more appropriate than a ban on acquisitions or use of real estate.

The lobby group CCIA, whose members include Airbnb, said the Commission should monitor national and local restrictions and resist disproportionate restrictions.

"Without proportionality checks that can be applied, the Affordable Housing Act will benefit no one: not the homeowners who rent out a room to help pay the bills, not the regions and sectors that depend on tourism," the group said.