Housing affordability remains a major concern across Europe, with house prices and rents rising substantially over the past decade and housing costs taking a significant share of household incomes.
The European Commission has now proposed an Affordable Housing Act aimed at giving national, regional and local authorities greater legal certainty when taking measures to protect housing affordability and availability in areas experiencing significant housing pressure.
The proposal, presented on 9 September 2026, would establish a common European framework for identifying areas under housing stress while leaving decisions on housing policy primarily with national, regional and local authorities.
The legislation is not yet in force. It must now go through the European Parliament and the Council under the ordinary legislative procedure.
Housing affordability across Europe
Eurostat data shows how housing costs have changed across the European Union.
House prices increased by 53% between 2010 and 2024, while rents increased by 25% over the same period.
Ireland recorded one of the largest increases in rents, with rents rising by 108% between 2010 and 2024.
Housing costs also account for a significant share of household income.
In 2024, EU households spent an average of 19% of their disposable income on housing.
The share was highest in Greece at 36%, followed by Denmark at 26%, while Cyprus recorded the lowest share at 11%.
A separate measure of severe housing-cost pressure shows that 7.7% of people in the EU were living in households where housing costs accounted for at least 40% of disposable income in 2025.
The rate was particularly high in Greece, at 26.4%, and Denmark, at 23.4%, while Cyprus recorded 2.4%.
What is the Affordable Housing Act?
The proposed Affordable Housing Act is designed to create a common European framework for assessing housing pressure.
The European Commission says housing decisions will remain primarily the responsibility of national, regional and local authorities.
Instead, the proposed legislation is intended to give authorities greater legal certainty when they decide to intervene in areas experiencing housing stress.
Authorities would have to demonstrate that measures they introduce are targeted, necessary and proportionate.
The framework could cover pressures associated with:
- Short-term rentals
- Second homes
- Long-term vacant properties
- Housing affordability
- Housing availability
The proposal is accompanied by a Commission Recommendation encouraging authorities to increase housing supply through measures including faster planning and permitting, renovation, repurposing buildings and investment.
How would housing stress be identified?
The European Commission is proposing a common methodology for identifying areas experiencing housing stress.
The assessment looks at factors including housing affordability, price-to-income levels, population changes, supply and demand pressures and the impact of short-term rentals.
This is intended to give authorities a more consistent evidence base when deciding whether intervention is justified.
The European Commission’s Joint Research Centre has developed a data-driven approach to identifying areas under housing stress, rather than relying on a single indicator such as house prices.
That distinction is important because housing pressure can vary considerably between cities, regions and local markets.
Short-term rentals and Airbnb
One of the most significant elements of the proposal concerns short-term accommodation.
The Commission says short-term rentals can reduce the number of homes available to local residents in some heavily affected areas, potentially putting additional pressure on housing availability and affordability.
However, the proposal would not introduce an automatic EU-wide ban on Airbnb or other short-term rental platforms.
Before authorities could introduce restrictions, they would have to demonstrate that short-term rental activity had a significant adverse effect on housing affordability or availability for at least three years.
They would also have to show that less restrictive measures would not be equally effective.
Authorities would also have to comply with existing EU rules governing short-term rentals, including registration requirements and measures dealing with listings that do not meet those requirements.
Second homes and vacant properties
Short-term rentals are not the only form of housing use addressed by the proposal.
The Commission also recognises that second homes and prolonged vacancy can contribute to housing pressure in some local markets.
The proposed framework would give authorities greater clarity around measures targeting these properties while requiring safeguards for legitimate owners.
For example, the proposal says measures dealing with long-term vacancy should take justified periods of non-occupation into account, while conditions connected with property acquisition should not apply retrospectively.
More affordable and social housing
The Affordable Housing Act forms part of the wider European Affordable Housing Plan, which aims to increase the supply of affordable housing and mobilise investment.
The Commission’s wider plan includes measures to:
- Increase housing supply
- Support social and affordable housing
- Improve planning and permitting
- Renovate existing housing
- Repurpose buildings
- Mobilise public and private investment
- Support young people and students
- Address homelessness
The Commission has also proposed changes to State aid rules to make it easier for public authorities to support social and affordable housing.
Young renters and students
Young people and students are among the groups identified by the European Commission as particularly affected by housing pressures.
The European Affordable Housing Plan includes measures intended to support additional student housing and other housing options for young people, particularly those from disadvantaged backgrounds.
The issue is particularly significant as rising rents and limited availability can make it more difficult for young people to move out of the family home, attend university or take employment in areas with high housing costs.
Concerns over the proposed rules
The proposal has also prompted concerns from housing organisations and local-government representatives.
Some housing advocates have argued that authorities need sufficient flexibility to respond quickly when local rental and housing markets come under pressure.
The European Commission’s own approach, however, is designed to balance local intervention with requirements for evidence, proportionality and consistency with EU law.
The debate is particularly relevant to short-term rentals, where tourism, local housing supply and the interests of property owners can overlap.
The Commission’s proposal therefore does not treat restrictions as automatic. Authorities would need to demonstrate the local impact and justify the measures they choose.
Ireland and the wider European housing crisis
Ireland is among the EU countries where rents have increased most sharply over the long term.
Eurostat data shows that Irish rents increased by 108% between 2010 and 2024, compared with a 25% increase across the EU as a whole.
The European Commission has also identified Ireland as one of the countries facing significant housing pressures.
Its Ireland-specific housing information points to high demand, limited supply, rising rents and long waiting times for social housing.
The proposed Affordable Housing Act could therefore become relevant to Ireland, particularly in discussions around housing supply, short-term rentals and areas experiencing severe affordability pressures.
However, decisions on Irish housing policy would remain primarily with the Irish Government and relevant regional and local authorities.
What happens next?
The Affordable Housing Act is currently a legislative proposal.
The European Commission presented it on 9 September 2026, and it will now be considered by the European Parliament and the Council under the ordinary legislative procedure.
The final legislation could therefore change during the negotiations.
For cities and regions, the central issue will be how the final rules balance local flexibility with evidence requirements and EU single-market rules.
For renters, landlords and property owners, the outcome could influence how authorities respond to housing shortages, short-term rentals, vacant homes and other sources of local housing pressure.
The wider European housing challenge
Europe’s housing crisis is not the same everywhere.
Eurostat data shows major differences between countries in house prices, rents and housing-cost burdens. The Commission’s proposed approach reflects that variation by giving local authorities a framework for identifying housing stress rather than applying one identical housing policy across the EU.
The Affordable Housing Act is therefore less about creating a single European rent-control system and more about establishing common rules and legal certainty for authorities dealing with housing pressure.
Whether the proposal ultimately changes how cities regulate short-term rentals, vacant properties and housing supply will depend on the final legislation and how individual authorities use the powers available to them.
For now, the Affordable Housing Act remains a proposal and has not yet become EU law.
Sources
European Commission, Affordable Housing Act and European Affordable Housing Plan.
Eurostat, Housing in Europe – 2025 edition.
European Commission Joint Research Centre, methodology for identifying areas under housing stress.
