Airbnb set to face more curbs as EU proposes rules to tackle housing crunch

EU Moves to Regulate Airbnb and Short-Term Rentals Amid Housing Crisis

European Commission Proposes New Rules for Short-Term Rentals

By Foo Yun Chee

BRUSSELS, Sept 9 (Reuters) - Airbnb and other short-term home rental companies are set to face more restrictions as the European Commission on Wednesday proposed rules to help authorities tackle a housing crunch in tourism hotspots.

Background: Diverse Local Regulations and Legal Challenges

The move by the EU executive aims to harmonise 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.

Impact on Housing and Public Response

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.

Shares of Airbnb were down about 3% in morning trade.

Key Provisions of the Proposed EU Rules

Statements from EU Leadership

"A year ago, I promised to tackle Europe's housing affordability," 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.

Framework and Assessment Criteria

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, confirming a Reuters story last week.

Conditions for Imposing Restrictions

It said any subsequent restrictions against short-term rental must be based on evidence, necessary and limited to the affected areas, and not be retroactive.

Industry and Stakeholder Reactions

Airbnb and Industry Groups Respond

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 blogpost.

Criticism of Enforcement Mechanisms

CCIA Europe's head of policy Alexandre Roure criticised 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.

Next Steps and Recommendations

It will be up to authorities to decide whether to take action. The proposal also recommends authorities unlock land for housing and modernise the planning and construction process.

(Reporting by Foo Yun Chee, Additional reporting by Anshuman Tripathy; Editing by Sudip Kar-Gupta, Jan Harvey, Sharon Singleton and Tomasz Janowski)