The European Commission proposes a common framework for affordable housing and clearer rules on short-term rentals

The Affordable Housing Act, the first common European framework for assessing measures affecting the housing market and the single market, was proposed on Wednesday by the European Commission. The initiative comes as more than half of city dwellers consider access to housing an urgent issue. The Act provides national, regional and local authorities with greater legal clarity when intervening in areas affected by the housing crisis. They will be able to identify “housing-stressed areas” based on a common methodology and adopt measures concerning short-term rentals, vacant homes or the use of second homes, provided that the interventions are necessary, proportionate and evidence-based.

In the case of short-term rentals, restrictions will have to target activities that reduce the supply of homes for long-term rental. Authorities must demonstrate that the negative effect on housing affordability or availability has been significant for at least three years and that less restrictive solutions would not be sufficient.

The proposal also protects the legal certainty of property owners and investors, including by prohibiting the retroactive application of conditions concerning the purchase of properties. The Commission also presented a recommendation to increase the housing supply through faster permitting, the renovation and conversion of buildings, and the facilitation of investment. The package is part of the European Affordable Housing Plan.