EU Launches Rules to Limit Short-Term Rentals

The European Commission has presented a proposal for common rules to limit short-term rentals in areas with strong housing pressure, according to ANSA. The initiative, called the Affordable Housing Act, establishes technical criteria that national, regional, or local authorities can use to justify restrictions on tourist rentals, especially in cities where the real estate market is pressured by short-term demand.

The proposal comes at a time of growing concern in several European countries, including Italy, over rising rental costs and housing shortages for permanent residents in cities highly sought after by tourists.

What the new European law proposes

According to ANSA, the Affordable Housing Act creates, for the first time, common criteria at the European level to identify what the Commission calls "housing pressure areas." Based on these parameters, local authorities now have technical support to limit short-term rentals, including those intended for tourist use, in regions where the housing problem is deemed significant.

The proposal does not create an automatic prohibition nor impose a single model for the entire European Union. Instead, it offers a common methodology that governments can adopt to support their own regulatory decisions, providing greater legal certainty to measures that currently vary significantly between cities and countries.

The topic is closely followed by those interested in News from Italy, since several Italian cities—from Rome to Venice, through Florence—face recurring debates about the impact of short-term tourism on the cost of living for local residents.

How the criteria work

According to ANSA, the European Commission's proposal defines objective parameters to characterize an area as housing-pressured. The main criterion is the relationship between the average price of real estate sales and per capita disposable income in the region: when this ratio reaches at least 8 years—meaning it would take eight years of income to buy an average property—the area can already be classified as meeting housing pressure criteria.

Beyond this central indicator, the methodology observes two other complementary factors:

• If this price-to-income ratio has increased over the past 10 years, indicating a historical trend of deterioration;
• If there are signs that the situation tends to worsen in the next 3 years if no intervention is made.

The combination of these three elements forms the technical basis that local authorities can use to justify, to their own populations and to the European Union, the adoption of restrictive measures on the short-term rental market.

Autonomy of local authorities

Despite establishing common criteria, the European Commission's proposal preserves the decision-making autonomy of national, regional, and municipal governments. As highlighted by ANSA, it is up to each level of government to decide whether or not to act based on the parameters defined by the new legislation—the European Union does not impose an obligation to restrict short-term rentals, but only offers the technical tool for those who choose to do so.

There is, however, an important requirement: any restrictive measure adopted must be demonstrably necessary, proportionate, and specifically aimed at addressing the real housing problem identified in the region. This means that cities cannot simply limit tourist rentals by arbitrary decision, without demonstrating, based on the established criteria, that the measure responds to a concrete situation of housing pressure.

This proportionality requirement is likely to generate legal and political debates in various European cities as local administrations evaluate whether and how to apply the new rules.

Why this matters to Brazilians of Italian descent

For Brazilians planning trips to Italy—whether for tourism or seeking reconnection with family roots—the topic has practical relevance. Historic and tourist cities, often destinations for those visiting their ancestors' homeland, may adopt new restrictions on short-term rentals if they meet the housing pressure criteria defined by the European Commission.

Those organizing trips to visit their family's comune of origin, access parish archives, or simply experience Italian daily life should pay attention to possible changes in the availability of short-term rental properties in cities like Rome, Florence, Venice, or Milan. Although the proposal still depends on local decisions to produce concrete effects, the topic already signals a trend toward greater regulation of the sector in regions more popular with tourists.

Monitoring this scenario is especially useful for those planning to combine tourism with Italian Citizenship bureaucracy, since many descendants take advantage of citizenship recognition trips to also explore historic cities where the short-term rental market may be affected by new rules. Practical information about costs, accommodation, and daily life in the country remains available in the Life in Italy section, while updates on the progress of the European proposal continue to be covered in the News from Italy section.

The European Commission's proposal still needs to go through the legislative procedures of the bloc before producing concrete effects in member countries. Until then, it is up to each city to evaluate whether and how it intends to use the new criteria to contain the effects of short-term tourism on the local housing market.

Source: ANSA