The European Commission has published its first European Affordable Housing Plan, setting out measures intended to increase housing supply, mobilise investment and give local authorities clearer legal tools to manage short-term letting in “housing-stress” areas.
A central element is a commitment to propose EU legislation on short-term rentals by the end of 2026, as part of an “Affordable Housing Act”.
The plan argues that affordability pressures have widened beyond low-income households. It cites a rise of more than 60 per cent in nominal house prices across the EU between 2013 and 2024, while average rents have increased by around 20 per cent, with new rents becoming “significantly more expensive”. The Commission also points to falling residential building permits (down about 22 per cent since 2021) and an under-used housing stock, estimating that around 20 per cent of dwellings are unoccupied.
Four pillars, ten actions
The Commission structures the plan around four pillars: boosting supply; mobilising investment; enabling immediate support while driving reforms; and protecting those most affected. Within these, it sets out ten key areas of action and proposes new coordination mechanisms, including a European Housing Alliance and an EU Housing Summit in 2026.
On supply, the plan links housing delivery to construction capacity and permitting. An annexed timeline lists a “Construction Services Act” targeted for late 2026 and a housing “simplification package” pencilled in for 2027, alongside measures focused on renovation and neighbourhood regeneration.
On investment, the Commission flags a Pan-European Investment Platform for affordable and sustainable housing, to be developed with the European Investment Bank and national and regional promotional banks. In parallel, it says revised State aid rules are intended to enable faster and simpler public support for social and affordable housing, including by allowing certain support without prior notification when conditions are met.
The Commission estimates that the EU will need more than two million homes per year to match current demand, implying roughly 650,000 additional homes annually compared with recent output. It puts the cost of delivering those extra units at about €150 billion a year.
Short-term rentals: a legislative proposal by end-2026
The most politically sensitive section concerns short-term accommodation booked through online platforms. The plan says short-term rentals grew by almost 93 per cent between 2018 and 2024 and argues that, in some areas, the expansion of short-term letting combined with speculative investment may be intensifying competition for limited housing stock and pushing up prices. It notes that in “very popular destinations” short-term rentals can represent as much as 20 per cent of the housing stock.
The Commission’s stated aim is not an EU-wide ban, but a coherent legal framework to support targeted and proportionate local measures in places it describes as “areas under housing stress”. The plan says the forthcoming initiative should also address consumer protection concerns and help distinguish between professional and non-professional hosts.
A related EU regulation adopted in 2024, Regulation (EU) 2024/1028, is due to apply from May 2026 and focuses on data collection and sharing for online short-term rental services. The Commission plan describes this as a transparency measure, including compulsory registration of hosts and improved data-sharing between platforms and authorities, and says correct implementation will be important.
In the plan’s timeline, the “new legislative initiative on STR as part of an Affordable Housing Act” is scheduled for the fourth quarter of 2026. Member States are encouraged to monitor short-term rental data and assess impacts on affordability.
Speculation, structural reforms, and Parliament scrutiny
Beyond short-term rentals, the annex includes an action on speculation in the housing market, including an EU-level analysis of housing price dynamics and data gaps, scheduled for late 2026. It also lists steps to promote transparency in residential property markets and to facilitate investment in non-profit or limited-profit housing providers.
The plan sits alongside growing institutional attention in Brussels. The European Parliament has set up a Special Committee on the Housing Crisis and scheduled a Commission statement on the housing plan for 16 December, with a draft report expected in the first half of 2026.
National enforcement and city pressure
The Commission’s approach arrives amid tightened national enforcement against illegal or unregistered tourist rentals. Spain’s consumer rights ministry announced a €64 million fine against Airbnb over listings it said lacked proper licensing information. Airbnb said it would contest the penalty. Spanish authorities have increased scrutiny of short-term rental platforms as housing costs rise.
City leaders have also pressed for EU action. Barcelona’s mayor, Jaume Collboni, told The Guardian that housing costs in Europe were comparable to “a new pandemic”, as he and other mayors urged larger-scale funding to support affordable construction.
