European Union to Regulate Short-Term Rental Market, Citing Housing Crisis
The European Commission has announced its intention to introduce new regulations for the short-term rental market, a policy area that has historically been managed at the member-state level. The tourism authority's move comes in response to what the EU Commissioner for Housing, Dan Jørgensen, has termed a “social crisis” in housing availability across the continent. The proposed rules are expected to directly impact the operation of online platforms such as Airbnb and Booking.com, which have been linked to a reduction in long-term housing supply in many European cities, including in Portugal.
In a formal announcement from Brussels, Commissioner Jørgensen stated that the EU Executive sees a clear need for intervention where national and local governments have not succeeded in balancing the growth of tourism with the housing needs of local populations. While the specific regulations for short-term rental properties are still being formulated, Jørgensen confirmed that legislative policies will be presented to address the market impact. He explicitly identified Portugal as a country where the growth of short-term rentals has contributed to a scarcity of affordable long-term homes, indicating that the country is a key focus of the new initiative.
The licensing requirements and application processes for short-term rentals, known in Portugal as Alojamento Local (AL), could see significant changes under the new EU framework. The Commissioner emphasized the severity of the situation, stating, “We must recognize that the situation is so serious that we now have a social crisis in Europe.” He called for a collective assumption of responsibility from all levels of government and positioned the European Commission to take on a new, more active role in housing policy. This signals a potential harmonization of rules that could affect everything from tax implications to tourist accommodation standards.
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For property owners, compliance obligations are likely to become more stringent. Jørgensen warned that a failure to act on the housing issue could have political consequences, stating, “If we, as politicians, do not take this problem seriously, do not recognize that it is a social problem that requires action, the anti-EU populists will win.” This political underpinning suggests that the forthcoming regulations will be robust and aimed at producing tangible results in favor of residential housing. The promise to “ensure that tenants' rights are taken into account” further reinforces this direction. Investors can find more information on our Regulatory and Legal Frameworks blog.
The neighborhood impact and community considerations of high concentrations of tourist accommodations are central to the Commission's concerns. The new rules may include requirements for data sharing from rental platforms to give municipalities better oversight of market supply and demand dynamics. This could lead to more effective enforcement procedures and penalties for violations. For anyone invested in or considering entering the short-term rental market, understanding these potential investment risks is crucial. Future regulatory developments will need to be monitored closely by property owners and investors alike.
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