EU Proposes Law Shielding Cities' Airbnb Restrictions

The European Commission proposed its Affordable Housing Act on Wednesday, the first EU-wide law designed to give national and local governments a clear legal basis for restricting short-term rentals and non-primary-residence purchases in areas facing housing pressure. Nothing changes for hosts this week. The proposal now goes to the European Parliament and the Council of the EU for negotiation, a process that typically runs well over a year before anything becomes binding.

What the law would actually authorize

Cities and national governments that cap Airbnb and Vrbo licenses, freeze new registrations or restrict who can buy a second home in a given neighborhood currently do so on shaky legal ground. Such measures can be challenged as violations of EU rules on free movement of capital and services. The Affordable Housing Act would give these restrictions explicit legal footing, provided they apply in zones officially designated as under housing strain. That covers licensing quotas, registration mandates and limits on purchases by non-residents or non-primary-home buyers, the tools cities including Barcelona and several Spanish and Portuguese municipalities have already tried to deploy.

The proposal follows an earlier draft that leaked before the formal announcement and drew pushback from within the Parliament itself over how far it would let member states go in restricting property rights. An earlier account of that draft outlined similar ground: legal cover for local caps rather than a new EU-wide rulebook dictating rental limits directly.

Why the timeline matters more than the text right now

Ordinary EU legislative procedure means this bill faces amendments from both the Parliament and national governments before anything is final, and Brussels itself has offered no date for when that process might conclude. For operators, the practical effect today is zero: existing local rules, from Barcelona's move to end short-term rental licenses by 2028 to Ibiza's registration caps, stand exactly as they were before Wednesday. What the Act would eventually change is the legal risk cities face when those rules get challenged in court, making it more likely that other pressured markets across Spain, Portugal, Ireland and the Netherlands follow with their own caps once the law clears negotiation.

This is separate from the EU's short-term rental data-sharing regulation, which already requires platforms to collect and share host registration numbers with authorities starting in 2026. That rule is adopted and moving toward enforcement. The Affordable Housing Act is not; it is a proposal that has just entered the queue, and operators should treat it as a signal of direction rather than a compliance deadline.