The EU Housing Act Pulls Short Lets Off Services Law

The European Commission on September 9 tabled a regulation that would take short-term rental curbs out of EU services law. Cities would still have to prove housing stress, but platforms would lose the court track they have used to slow local bans.

The file is COM(2026) 599, procedure 2026/0268(COD), titled the Affordable Housing Act. It does not ban Airbnb, Booking.com or other lets. It sets the tests a city must pass under Union law if it already has the power, under national law, to restrict holiday lets, second homes or long empty dwellings.

Cities Lose the Services Directive Shield

For years, local night caps, licence schemes and neighbourhood bans have been argued as limits on the freedom to provide services. The Court of Justice has treated repeated short-term letting as a service. That put city halls into a slow fight over necessity and proportion, and it put platforms and professional hosts onto familiar ground.

The September 9 housing regulation proposal says that, for measures in its scope, its own rules on housing stress, justification and proportion apply instead of Directive 2006/123/EC, the Services Directive. It also drops the Article 15(7) notification obligation for those measures, the step that has forced national rules into a Brussels filing before they bite.

The Commission is explicit about what this is not. The text “does not establish under EU law any new right” to restrict short-term lets or property use, and it does not tell a mayor which tool to pick. Housing policy stays national, regional and local. The Union claim is narrower: when a local rule hits the single market, there should be one method for showing stress and one method for showing the rule is needed.

That method is the part that will be litigated. If the regulation is adopted as drafted, a host or platform challenging a city cap would be arguing inside this file, not asking a court to run a classic Services Directive review of the same facts. Other Union law still applies where this regulation does not displace it, including the right to property in the Charter.

A year ago, I promised to tackle Europe’s housing affordability. Today, we are taking one step in this direction. By providing more clarity and support to local authorities and communities, anchored in local realities.

Ursula von der Leyen, President of the European Commission, September 9, 2026

The announcement went out on the Commission’s own account the same afternoon.

Today, we are presenting our Affordable Housing Act.

It provides national, regional and local authorities with the tools and legal certainty they need to assess housing availability and affordability where the pressure is greatest, and to determine the appropriate next steps.… pic.twitter.com/YWgC4TqFLE

— European Commission (@EU_Commission) September 9, 2026

The file had a rough birth. The Regulatory Scrutiny Board issued a negative opinion on June 5, 2026. The impact assessment was rewritten so the initiative is a procedural instrument for legal certainty, not a housing-market intervention, and the Board gave a positive opinion with reservations on July 17. That rewrite is the tell. Brussels is not claiming a new housing competence. It is rewriting the courtroom rules for the competence cities already say they have.

Most Tourist Capitals Already Clear the 10x Test

An area may be treated as under housing stress when the price-to-income ratio is 8 or higher, meaning an average home would cost eight years of per-capita disposable income. That ratio must also have risen over the past ten years, unless it is already 10 or higher, in which case the decade-trend test falls away.

Clearing the screen is not a licence to act. Before restricting short-term lets, authorities must still meet the three-year adverse effect test: a significant hit to affordability or availability lasting at least three years, plus a showing that a milder tool would not do the same job. Restrictions are capped at five years and can be renewed only after a review. Hosts letting a primary residence are not the target. The text is aimed at activity that, by scale, frequency or commercial character, takes homes out of long-term use.

The Commission’s own screen will use official local series, not a travel website. A public cost-of-living index is still a useful map of which cities already sit far above 10, which is the point at which the ten-year rise test no longer applies.

NUMBEO PRICE-TO-INCOME RATIOS, MID-2026

Those figures come from Numbeo’s mid-2026 European property table, which compares typical apartment prices with local incomes. They are not the Commission’s statutory ratio. They do show why Lisbon, Split, Paris, Barcelona and Madrid are the first names in any conversation about who moves once the law exists. Housing Commissioner Dan Jørgensen, presenting the file, said rents had gone up over ten years by 59% in Berlin, 75% in Madrid and 103% in Lisbon, and that short-term lets in parts of some cities had “led to normal people being crowded out of their homes.”

The Commission’s own questions-and-answers pack is more precise about concentration than about citywide shares. Between 2018 and 2024, activity on the four major platforms grew 93%. In central Madrid, it counts about 40 short-term rentals for every 100 homes on the long-term rental market. Teresa Ribera, the executive vice-president who stood up the file with Jørgensen, said short-term rentals can account for up to 20% of homes in some popular tourist destinations and city centres.

Empty Homes Dwarf the Short-Let Stock

The Joint Research Centre, the Commission’s in-house science service, puts the EU-wide picture in a different scale. Short-term rentals are 1.2% of total dwellings in the EU, and 1.5% in rural areas. In tourist spots and in some city neighbourhoods the share can reach 20% of the dwelling stock. In 2024, 854 million guest-nights were booked through Airbnb, Booking, Tripadvisor and Expedia.

The same Commission housing pages put unoccupied dwellings at 20% of EU stock and social housing at 6-7%. Jørgensen told the Parliament’s housing committee that short-term rentals can account for up to 20% of homes in some tourist centres, while 20-30% of homes can be vacant in some other cities. Those are three different 20s: a neighbourhood STR share, an EU-wide vacancy share, and a vacancy range in particular cities. They are not interchangeable, and the industry’s attack is that the law is built around the smallest of them.

THE STOCK THE LAW IS BUILT AROUND

• Short-term lets: The JRC puts them at 1.2% of EU dwellings, rising to about 20% in some tourist neighbourhoods.
• Empty homes: Commission housing pages put unoccupied dwellings near 20% of EU stock, and Jørgensen cited 20-30% vacancy in some cities.
• Social housing: Only 6-7% of EU housing stock is social housing, per the Commission’s own housing brief.
• Guest-nights: 854 million nights were booked in 2024 on the four major platforms, after 93% activity growth from 2018 to 2024.

CCIA Europe, the tech trade group that counts Airbnb among its members, has argued that curbing a sliver of stock will not close a supply gap, and that the Commission is writing rules before its own short-term rental data law has produced a full evidence base. For each entire-home short-let listing, the JRC counts roughly 15 dwellings that are not used as a primary residence, a mix of vacant homes, holiday homes and occasional-use property. The political choice is to put the legal shield around the one, not the fifteen.

House prices, on the JRC’s series, were about 55% higher at the end of 2024 than in 2015, against 49% growth in net household income per capita. Housing, water and energy took 23.6% of household spending in 2024. Thirty-year-olds born in the 1980s were 6.7 percentage points less likely to own a home than 30-year-olds born in the 1970s, compared at the same age. A June 2025 Eurobarometer housing survey found 40% of Europeans see affordable housing as an immediate problem where they live, rising to 51% in cities.

Supply is the part the Commission keeps saying is structural. JRC and Commission economic staff project that more than 2 million new homes a year are needed by 2035 to meet demand, on top of 17.06 million units already planned, which implies 7.14 million extra dwellings, about €150 billion a year and €1.68 trillion by 2035. The top 30 metropolitan areas account for 35.5% of that need. The accompanying recommendation urges Housing Acceleration Plans for permits, renovation and reuse. The regulation itself does not build those homes.

How Courts Have Treated Holiday Lets Until Now

The Services Directive fight is not a theory. It is a docket. Paris, Brussels and Barcelona have already spent years in it, which is why removing the notification step and displacing the directive for housing-stress measures is the change platforms will feel first.

THE COURT TRACK THIS FILE IS BUILT TO REPLACE

1. 2020, Cali Apartments: In joined cases C-724/18 and C-727/18, the Court of Justice holds that repeated short-term letting of furnished homes for pay, including via platforms, falls under the Services Directive, and that a prior-authorisation scheme can survive if it rests on a housing-market study, stays off primary residences and is limited to the densest areas.
2. May 2026, data law: Regulation (EU) 2024/1028 on host registration and data sharing begins to apply, forcing platforms to pass booking data to national authorities and to drop listings that are not registered.
3. February 5, 2026, Smartflats: Advocate General Manuel Campos Sánchez-Bordona, in case C-813/24 against the Brussels-Capital Region, warns that a tourist-accommodation authorisation scheme still has to be necessary and proportionate, and that red tape without a decision deadline can fail that test.
4. June 5 to July 17, 2026, scrutiny: The Regulatory Scrutiny Board rejects, then conditionally clears, an impact assessment recast as procedure rather than a housing intervention.
5. September 9, 2026, the proposal: The Commission publishes COM(2026) 599, taking in-scope short-let housing measures out of the Services Directive and dropping the Article 15(7) filing.

Industry groups have already used that track against Catalonia’s plan to phase out apartment tourist lets. The European Holiday Home Association and Barcelona’s Apartur group told the Commission the Catalan decree was unjustified and broke EU services law. A later Spanish court appeal against the phase-out was rejected, but the Union-law complaint is the kind of action this regulation is written to reroute. If housing-stress measures no longer sit inside the Services Directive, the “unjustified and disproportionate” claim has to be remade under the new tests, including the three-year adverse-effect showing and the five-year clock.

Second Homes Sit in the Same Legal Box

The Airbnb headline is incomplete. Article 2 of the proposal covers two families of measures: restrictions on access to, or the provision of, short-term accommodation rental services in residential property, and restrictions on the acquisition or use of land and residential property that is not acquired or used as a primary residence.

The second limb is the part property-owner groups clocked first. In housing-stress areas, authorities could reach for tools that have little to do with a weekend guest.

WHAT THE SECOND LIMB CAN COVER

• Non-primary use: Limits on homes that are not a main residence, including second homes in tourist and island markets.
• Who may buy: Rules reserving affordable homes for owner-occupiers, first-time buyers, or lower- and middle-income households.
• Empty stock: Measures against long-term vacancy, with credit for justified periods of non-occupation.
• Use before purchase: Declaration requirements on intended use prior to acquisition, and bans on converting homes out of residential use.

Those tools cannot be made retroactive. The Commission page on the act requires that conditions linked to acquisition cannot apply after the fact, that transitional arrangements are provided, and that vacancy rules respect legitimate empty periods. Inheritance, gifts, family transfers, rent controls, housing benefits, building standards, tax and ordinary zoning stay outside the regulation where they are not being used to restrict acquisition or use in the name of affordability.

That is still a wider file than a nights-per-year cap. The loudest objection after September 9 was not that Lisbon might add a licence. It was that the same legal box that holds holiday lets also holds a second apartment left empty, and a purchase that is not for a primary residence. One Italian property-owner voice put it as a stack of EU, state, region and city rules with the owner missing from the puzzle. The text does not transfer title to the state. It does decide, in stressed areas, what a non-primary home may be used for.

Host Registration Started in May

The data argument is the industry’s best process point, and the Commission has already answered it by layering the two laws rather than waiting. Regulation (EU) 2024/1028, the short-term rental data law, began to apply in May 2026. It requires host registration, listing takedowns for unregistered properties, and the sharing of actual transaction data between platforms and national authorities.

The Affordable Housing Act tells competent authorities they must apply and enforce that data law, and use its figures where they exist, before they restrict. CCIA’s April 2026 evidence filing had asked the Commission to evaluate that data first. The Commission went ahead anyway, on the view that the data law measures activity and the housing act decides when a restriction is justified. They are complementary, the explanatory memorandum says: one improves transparency, the other supplies the legal tests.

That sequencing will feed the next round of litigation. A city that cannot show three years of adverse effect from the new register will struggle. A city that can, and that already sits above a price-to-income ratio of 10, will move faster than the last decade of Services Directive notices allowed. The European Committee of the Regions welcomed the act on September 10, with Barcelona mayor Jaume Collboni, its rapporteur on the wider housing plan, in the frame. Cities that have already been to court are the constituency this file is written for.

Irene Tinagli, who chairs Parliament’s special housing committee, said the spread of short-term and tourist rentals is adding pressure in some cities. Other MEPs, in the same September 9 exchange with Jørgensen, warned that curbs on lets, second homes and vacant property could hit property rights and tourism economies, and that none of it substitutes for faster permits and more building. The consultation record behind the proposal is large: 13,330 responses to the 2025 housing-plan consultation, then 617 contributions to a call for evidence between March 6 and April 3, 2026, and 303 replies to a targeted questionnaire. Public authorities asked for legal certainty. Operators asked for proportion and evidence. Tenants and social-housing providers asked for tools that actually bite.

The File Now Goes to Parliament and Council

The legal basis is Article 114 of the Treaty on the Functioning of the European Union, the internal-market approximation clause. That choice matches the rewrite the Scrutiny Board forced: this is a common method for judging restrictions that already hit establishment, services and capital, not a Union housing code. The Commission will evaluate the regulation no earlier than five years after it starts to apply, a review of the Union framework, not the five-year cap on a city’s own measures.

There is no adoption date. The proposal now goes through the ordinary legislative procedure. Member states in the Council and the directly elected Parliament can thicken the Services Directive carve-out, water it down, or hang more conditions on the 8x and 10x screens. Until that vote, no city gains the new shield, and no platform loses the old one.

WHAT WE KNOW

• The legal switch: In-scope short-let housing measures would be judged under this regulation instead of the Services Directive, without an Article 15(7) notification.
• The tests: A price-to-income screen of 8, or 10 without the decade-trend test, plus three years of significant adverse effect and a five-year limit on the restriction.
• The reach: Second homes, vacancy and some non-primary purchase rules sit in the same box as holiday lets, and cannot be applied retroactively.

WHAT IS UNCONFIRMED

• The calendar: No date is set for Parliament and Council to finish the file, and the Commission has not named a start date for application.
• The first movers: Lisbon, Split, Paris, Barcelona and Madrid sit far above 10 on public price-to-income tables, but none is bound to act, and each still needs the three-year showing.
• The court test: Whether the new method actually cuts successful challenges will only be known after a city uses it and a host sues.

Jørgensen’s line on the day was that housing is a right and a pillar of dignity, and that Europe should make better use of the homes it already has. The regulation he tabled does not build those homes. It changes the law a city must satisfy when it tries to pull a flat off a platform and back onto a long lease, and it does the same for a second home that is not a primary residence. That is a quieter shift than a ban, and it is the one that will last if the file survives the vote.