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The European Commission adopts a proposal for the regulation of short-term accommodation rentals

Housing Europe reminds about the two main weaknesses impacting housing affordability

Brussels, 18 November 2022 | Published in Economy, Future of the EU & Housing

In November, the European Commission has opened a real pandora box – the need to set new rules for short-term rental platforms. Short-term letting (STL) has grown rapidly as new digital platforms have brought together local accommodation providers with the global tourism market. This has caused numerous problems for cities, their housing markets, and local residents as a recent review by the OECD stated. Yet, we think that when it comes to regulating rent contracts and subsidiarity, local and national authorities are the right level to regulate.

Housing Europe has been vocal about two weaknesses that are impacting housing affordability and unfortunately, we do not see two important points in the current proposal of the European Commission. As you surely know, the use of a home as a short-term rental on a full-time basis (in other words, on a ‘commercial’ basis) is illegal in most cities. For example, Paris estimates that 60% of AirBnB listings in the city are illegal, while in Berlin 80% of listings do not include a legally mandated registration number taking off illegal short-term rented flats from the Internet. 

We see platforms putting a bigger pressure on the private rental market, which in turn puts more pressure on social housing providers and increases demand for affordable homes in attractive cities where waiting lists for social housing are already unmanageable. For instance, we know that at least 2 million people are waiting to be in the right to live in social housing in France.

Another important point is that short-term rental platforms have been enabling the illegal subletting of public, cooperative, and social housing. In the current proposal which has to be put in perspective with the existing Digital Services Act and request coherence between both, we see that cities will have a bigger decision power but we also must bear in mind that municipalities are already overburdened and monitoring of illegally-let homes might not be up-to-speed.

Housing Europe will continue following the developments. Keep an eye on our channels.