MEPs have opened debate on the EU’s proposed Affordable Housing Act, which would give national and local authorities a clearer legal framework for restricting short-term rentals and some non-primary residential property use in areas facing severe housing pressure.

The European Parliament has begun examining legislation that would give cities and national governments greater legal certainty when restricting short-term rentals and the use or acquisition of residential property in areas where housing has become difficult to afford.

The proposed Affordable Housing Act, presented by the European Commission on 9 September, was on Parliament’s agenda in Strasbourg on Tuesday as housing costs move further into EU-level politics.

The legislation does not transfer general housing policy to Brussels. Decisions on construction, planning, rent policy and social housing would remain primarily with national, regional and local authorities.

Instead, the proposal would establish a common EU legal framework governing some restrictions that member states and cities may introduce when attempting to protect housing supply.

The draft regulation specifically covers measures restricting short-term accommodation in residential properties other than a host’s primary residence. It would also cover restrictions on the acquisition or use of land and housing that is not intended as somebody’s principal home.

Those provisions are designed partly to resolve a legal problem that has become increasingly important in cities with large tourism markets.

Local governments have introduced restrictions on holiday rentals and second-home use, but such measures can clash with EU single-market rules governing services, property and establishment. The Commission says the legislation would provide authorities with a clearer method for demonstrating when restrictions are justified and proportionate.

The law would therefore not impose a common European cap on Airbnb-type accommodation. Nor would it oblige cities to introduce restrictions.

Authorities choosing to intervene would instead have to demonstrate housing stress and ensure that their measures meet EU requirements on proportionality, transparency and review.

Brussels argues that the scale of Europe’s housing problem now affects more than social policy.

According to the Commission’s European affordable housing plan, house prices across the EU have risen by more than 60 per cent since 2013, while average rents have increased by about 20 per cent. Short-term rentals increased by 93 per cent between 2018 and 2024.

Only between six and seven per cent of EU housing stock is classified as social housing, while about 20 per cent of homes are recorded as unoccupied.

The Commission estimates that Europe needs to build more than two million homes a year to meet current demand — around 650,000 more annually than are presently being constructed. It estimates the additional investment requirement at approximately €153 billion each year.

Those figures underline a central difficulty in the housing debate: restrictions on tourist accommodation may return some properties to residential use, but they do not address the full shortage of new homes.

EU Today examined that wider supply issue when the Commission launched its European Affordable Housing Plan, which combines proposed regulation with investment, faster permitting, construction reform and changes to state-aid rules.

The debate is becoming more politically prominent as housing affordability affects a growing share of middle-income households as well as those on lower incomes.

Berlin offers one example. EU Today reported last month that advertised rents in the German capital had risen by roughly three-quarters in less than a decade, while the city calculates that it will need another 211,000 homes by 2040.

Pressure is particularly acute in large cities and tourism centres, where residential demand competes with short-term accommodation and investment properties.

The Commission argues that this has consequences for the wider economy because workers who cannot find affordable accommodation may be unable to move to areas where jobs are available.

That is why Brussels increasingly presents housing not only as a social concern but as part of the competitiveness and single-market agenda.

The proposal is still at an early stage. Parliament and the Council must negotiate the legislation under the ordinary legislative procedure, and substantial amendments remain possible.

Questions are likely to centre on how “housing stress” is defined, what evidence authorities must provide before restricting property use and how far EU law should permit local intervention in property markets.

The political dividing line is already apparent. One side of the debate stresses that cities need more freedom to protect permanent housing stock. The other warns that regulation of short-term rentals or second properties can affect tourism businesses, property owners and investment without necessarily creating sufficient new supply.

The Affordable Housing Act attempts to establish legal rules for that dispute rather than settle it centrally.

If adopted, its importance will therefore depend less on a single Brussels policy than on how individual European cities use the powers and legal protection it provides.

Tens of thousands of people have demonstrated across Spain after parliament rejected two government housing decrees, bringing the country’s dispute over rents, evictions and housing supply back onto the streets.

Tens of thousands of people marched across Spain on Saturday, 3rd October, demanding action over rising rents, evictions and access to housing, a day after parliament rejected two government measures intended to strengthen protections for tenants.

In Madrid, the government delegation estimated attendance at around 70,000, while organisers put the figure considerably higher. Demonstrations were organised in more than 50 cities. In Valencia, clashes broke out near a property investment conference at the City of Arts and Sciences, while protests elsewhere were largely peaceful. The nationwide demonstrations followed several days of mobilisation by Spanish tenants’ organisations.

The immediate political trigger came on Friday, when the Congress of Deputies rejected two housing decrees proposed by Prime Minister Pedro Sánchez’s minority government.

The government had approved a package of emergency housing measures including stronger protection against evictions for vulnerable households, changes affecting property investment companies and measures intended to increase the availability of affordable rental accommodation. A second decree included provisions for the automatic renewal of some rental contracts.

The measures were defeated after the Popular Party, Vox and Junts opposed them. Junts argued that the proposals would not resolve the underlying shortage of housing and risked discouraging property owners from putting homes onto the market.

Housing has become one of Spain’s most politically sensitive domestic issues, particularly in Madrid, Barcelona, Valencia and other cities where rising demand has coincided with limited supply, strong tourism and a large short-term rental market.

The protests have also been shaped by the eviction of 87-year-old Maricarmen Abascal from the Madrid flat where she had lived for decades. The case attracted national attention and became a focal point for campaigners demanding stronger protection for tenants.

Spain has already taken measures against short-term tourist accommodation. EU Today reported last year on Spain’s move to block more than 65,000 Airbnb listings that the authorities said did not comply with regulatory requirements.

Barcelona has gone further, announcing plans to end approximately 10,000 tourist-apartment licences by 2028 as the city seeks to return properties to the long-term residential market.

The argument, however, extends beyond holiday rentals.

Spain faces a structural shortage of housing in areas experiencing strong population and employment growth. Tenant organisations favour stronger rent controls, longer contracts and greater restrictions on institutional investors. Property organisations and political opponents of tighter controls argue that excessive intervention can reduce rental supply and discourage construction.

The same debate is increasingly visible across Europe.

Figures published by Eurostat on 1 October showed EU house prices rising by 4.7 per cent in the second quarter of 2026 compared with the same period last year. Rents increased by 3 per cent. Compared with the first quarter, house prices rose by 1.2 per cent and rents by 0.7 per cent.

EU Today recently examined how Berlin’s housing shortage and rapidly rising rents became a central issue in the city’s election campaign, illustrating how affordability has moved up the political agenda across several European capitals.

Brussels has also become more involved. The European Commission’s first European Affordable Housing Plan, presented in December 2025, focuses on increasing supply, mobilising investment, accelerating construction and giving authorities additional scope to address short-term rentals in areas experiencing housing pressure.

EU Today reported when the plan was launched that it included proposals for new action on short-term rentals and housing investment. The Commission has since begun building a European Housing Alliance bringing together governments, cities, regions and housing organisations.

The Commission estimates that house prices across the EU have risen by more than 60 per cent since 2013, while average rents have increased by around 20 per cent. It has nevertheless stressed that most housing policy remains under national, regional and local authority.

Spain therefore represents one of the more acute versions of a wider European problem: how to increase supply while deciding how far governments should regulate rents, tourist accommodation and investment in residential property.

Saturday’s demonstrations show that the issue is no longer confined to housing policy.

For Sánchez, the defeat of the two decrees has exposed once again the difficulty of securing parliamentary majorities for major legislation. For Spain’s opposition parties, the dispute centres increasingly on whether government intervention is helping to expand housing supply or restricting it.

For tenants facing higher rents, the immediate question is whether any new legislation can materially increase the number of homes they can afford.