New EU rules to help local authorities tackle the housing crisis

On 9 September, the Commission proposed the Affordable Housing Act to help Member States and cities tackle the issues of housing affordability and availability in areas facing the greatest pressures. The lack of affordable housing has become one of the most pressing concerns for Europeans. According to the latest Eurobarometer, more than 50 per cent of city dwellers consider housing to be an immediate and urgent problem where they live. The proposal helps to address these concerns. The housing crisis also undermines our competitiveness by limiting labour and educational mobility. It is therefore essential to tackle it. 

In some cities and popular tourist destinations, where pressure on the housing market is greatest, the growing use of housing for purposes other than as a main residence can exacerbate local availability and affordability issues. The Affordable Housing Act addresses these highly localised concerns. It provides public authorities with legal certainty when they decide to take action, based on local specificities, within the framework of EU law.

Some Member States have already adopted measures to alleviate these pressures, but have faced legal challenges regarding their compatibility with EU law. The Affordable Housing Act brings clarity and predictability, and responds to the call from Member States and local authorities for greater legal certainty on how they can act within the context of the EU single market.

Ursula von der Leyen, President of the Commission, said:

‘A yearago, I promised to tackle the issue of affordable housing in Europe. Today we are taking a step in that direction. We are providing greater clarity and support to local authorities and communities, grounded in local realities. The lack of affordable housing is a cause for concern for many of our European citizens. Essential workers and students cannot afford to live where they work and study. But above all, this is about fairness. Today we are delivering results for all Europeans.”

Legal certainty for authorities safeguarding the affordability and availability of housing 

The Affordable Housing Act establishes the first common European framework for assessing housing-related measures that affect the single market. It leaves the decision on whether or not to act, and which measures to adopt, to the competent authorities. Housing policy choices remain a national, regional and local matter.

The Act aims to provide legal clarity to authorities when they decide to take action in areas experiencing housing pressures, whilst safeguarding the single market and fully respecting the principle of subsidiarity.

The new rules are designed to help the competent authorities identify ‘areas experiencing housing stress’ using a common methodology. Where authorities decide to restrict the use of housing – for example, for short-term lets or vacant properties – they must demonstrate that this contributes to local housing pressures and ensure that any measure is specific, necessary and proportionate.

With regard to short-term lettings, any measures must target activities that reduce the stock of housing available for long-term use, particularly where their scale, frequency or commercial nature exacerbate housing pressure. Before introducing restrictions, the authorities must also demonstrate that short-term letting has had a significant adverse effect on the affordability or availability of housing for at least three years, and that less restrictive measures would not be equally effective. They must implement and enforce the EU Regulation on short-term lettings, including its registration requirements and the removal or blocking of adverts that do not comply with them, and, where available, use the data collected under that Regulation to support their assessment.

Short-term lets are not the only form of non-primary use of housing that can exacerbate housing pressures. Authorities are also taking measures affecting the acquisition or use of residential property, for example, to tackle second homes or long-term vacancies. The Affordable Housing Act also provides a clearer framework for such action. The Act protects legal certainty and legitimate expectations: conditions attached to the acquisition cannot be applied retrospectively, appropriate transitional provisions must be put in place, and measures relating to long-term vacancies must take into account justified periods of non-occupation.

For residents in areas under pressure, the aim is for measures adopted at local level to be better targeted, better supported by evidence and reviewed over time, and to be accompanied by measures to increase the supply of housing. Investors and landlords operating in several local markets will benefit from greater clarity regarding the EU legal framework. 

The proposal is accompanied by a Recommendation on housing affordability and supply in areas under housing stress. It supports authorities in their efforts to increase the supply of housing in areas where it is most needed, in particular through faster planning and the granting of permits for new-build developments and the refurbishment of existing buildings, as well as by facilitating investment. Authorities are also encouraged to focus these efforts on increasing the housing supply through housing acceleration plans. Together, the legislative proposal and the Recommendation help authorities to safeguard the affordability and availability of housing, whilst accelerating the additional housing supply that the EU needs. The Act forms part of the European Affordable Housing Plan, alongside the new rules on state aid for affordable housing and the European Housing Strategy.

Next steps

The legislative proposal will now be submitted to the European Parliament and the Council in accordance with the ordinary legislative procedure. In parallel, the Commission will continue to work closely with the Member States and all relevant stakeholders to implement the European Plan for Affordable Housing.

Background

The Affordable Housing Act follows on from President Von der Leyen’s State of the Union address in September 2025, in which she announced that the Commission would tackle housing affordability through a legislative initiative. This is a flagship initiative under the European Affordable Housing Plan and complements EU action to mobilise public and private investment in social and affordable housing and to reduce the time and cost of building and renovating homes. It also complements the existing EU rules on short-term lettings, which will apply from May 2026 and aim to improve transparency and access to data, whilst the Affordable Housing Act sets out the framework for assessing and justifying housing-related measures.

 

More information: European Commission