Palma: Every European city that has tried to restrict short-term letting has ended up in court, and the argument made against it has almost always been the same one. Restricting who may rent a flat and to whom interferes with the freedom to provide services, and a municipality is not obviously entitled to make that interference. Cities have mostly won those cases. They have won them slowly, expensively, and one at a time.
The Affordable Housing Act the Commission proposed on 9 September is an attempt to end that pattern, and it is worth being precise about how. The Act does not grant local authorities any power they did not have. It does not set rent levels, cap prices, or oblige anyone to build. What it does is supply, for the first time, a common European framework for assessing whether a housing measure that touches the single market is lawful. Cities keep the decision on whether to act and what to do. Brussels supplies the test they will be measured against.
That is a smaller thing than the announcement suggests and a larger thing than it sounds. The test has teeth. An authority wanting to restrict short-term rentals must first identify its territory as an area under housing stress using a methodology set at Union level. It must then demonstrate that short-term letting has had a significant adverse effect on affordability or availability for at least three years. It must show that less restrictive measures would not work as well. And it must already be applying and enforcing the Short-Term Rental Regulation that has been in force since May, including its registration requirements and the obligation to remove non-compliant listings, using the data that regulation generates to support its own case.
Read as a compliance sequence rather than a political announcement, this redistributes power in a way that has little to do with the subsidiarity language surrounding it. The binding constraint on a city’s housing policy becomes the quality of its housing data. A municipality with a functioning registration system, three years of clean occupancy records and the analytical capacity to link them to rent series can build a defensible file. A municipality without those things cannot act at all, whatever its housing market is doing. The Act therefore rewards administrative capability, which in Europe correlates only loosely with housing distress.
The three-year evidentiary requirement carries a second consequence. Housing pressure from non-primary use does not build linearly. A district can be transformed inside eighteen months when a platform’s inventory in it doubles. An authority watching that happen in real time will now have to document it for three years before it may respond, by which point the stock it wanted to protect has already changed hands. There is a defensible reason for the threshold — it prevents authorities from dressing up unrelated policy goals as emergencies — but it is a threshold calibrated for slow markets, applied to the fastest-moving segment of the housing system.
The provisions on second homes and prolonged vacancy are more cautious still. Conditions on acquisition cannot be applied retroactively, transitional arrangements are required, and measures against vacancy must account for justified periods of non-occupation. Each of those is a reasonable protection of legitimate expectations. Together they mean that the instruments most often proposed for the empty-flat problem will operate only on future transactions, which is to say slowly.
The Act arrives alongside a Recommendation on supply — faster planning and permitting, repurposing, Housing Acceleration Plans — and joins the revised state aid rules for services of general economic interest that took effect in January, which for the first time treat social and affordable housing as separate exempted categories with raised notification thresholds. That combination tells you what the Commission actually thinks. Demand-side restriction is being made legally safer but procedurally harder. Supply-side spending is being made administratively easier. The Union has decided, without quite saying so, that Europe’s housing problem is a construction problem with a regulatory symptom.
Parliament and the Council now take the file under the ordinary procedure, where the three-year test and the stress methodology will be the contested paragraphs. Cities will argue the thresholds are unreachable. Platforms and property investors will argue they are the minimum. Neither will be arguing about housing supply, which is the thing the Act cannot deliver.
