Airbnb and other short-term rental platforms are set to face tighter restrictions after the European Commission proposed new rules Wednesday to help authorities address housing shortages in tourism-heavy areas.
The move by the EU executive aims to harmonize rules across Europe after authorities in cities including Paris, Barcelona and Venice turned to a raft of diverse rules to crack down on Airbnb, which subsequently triggered legal challenges.
The shortage of affordable housing due to the surge in short-term holiday rentals has prompted residents, especially young Europeans, to take to the streets to protest.
"A year ago, I promised to tackle Europe's housing affordability," European Commission President Ursula von der Leyen said in a statement.
"Today, we are taking one step in this direction. By providing more clarity and support to local authorities and communities, anchored in local realities," she said.
The proposal, which will need to be agreed with EU countries and the European Parliament in the coming months before it can become law, provides a first-ever common European framework for assessing housing measures.
The Commission said authorities can identify areas with a housing squeeze by checking whether the price-to-income level is high or if there has been an upward trend for the past 10 years.
It said any subsequent restrictions against short-term rentals must be based on evidence, necessary and limited to the affected areas, and not be retroactive.
Airbnb echoed comments made by lobbying group CCIA Europe, which called for independent scrutiny of restrictions or effective redress. The company said the crux of the problem is the short supply of housing.
"That means focusing it (the regulation) where the shortage actually is: construction, renovation, and the homes standing empty across Europe today," George Mavros, Airbnb's head of government affairs for the European Union, said in a blog post.
CCIA Europe's head of policy, Alexandre Roure, criticized the EU proposal to allow cities to police their own compliance.
"Without independent scrutiny or effective redress, this proposal will remain a paper tiger, leaving disproportionate restrictions in place and undermining the legal certainty the Affordable Housing Act is meant to provide," he said.
It will be up to authorities to decide whether to take action. The proposal also recommends authorities unlock land for housing and modernize the planning and construction process.