The European Union (EU) executive plans to propose new rules to address the significant impact of short-term rentals, such as those offered via platforms like Airbnb and Booking.com, on housing affordability. This initiative is part of the EU's first-ever affordable housing plan, aiming to tackle what it describes as a 'social crisis' where many citizens struggle to afford a home.

Dan Jørgensen, the EU's first housing commissioner, emphasised the urgency of the situation, stating that policymakers must take housing seriously to prevent the rise of anti-EU populists. He noted that Brussels had previously 'failed to deliver' on key aspects of the housing crisis.

Historical and Political Context

Traditionally, housing policy has been a domain largely left to individual EU member states. However, Jørgensen insists that certain aspects of housing, particularly those with cross-border implications like short-term rentals, fall within the EU's competence. The upcoming housing plan, expected in December 2025, has been fast-tracked from its original 2026 publication date due to the escalating 'social crisis'.

The boom in short-term accommodation across European cities has been widely criticised for driving up rents, displacing local residents from historic city centres, and transforming residential areas into tourist hubs. While Jørgensen highlighted this as a 'huge problem,' he did not specify particular platforms or detail the proposed regulations.

Laws, Policy, and Governance

The proposed EU regulations are expected to cover issues such as tenants' rights, property speculation, and tourist lets. While specific details are yet to be revealed, the focus on short-term rentals suggests potential measures like registration requirements, limits on rental days, or stricter taxation. Such policies could serve as a precedent for countries like Kenya, where the informal nature of some short-term rentals poses regulatory challenges for local authorities.

Stakeholders and Testimonies

The concerns about short-term rentals are set against a backdrop of general increases in rents and mortgages across the EU. Between 2010 and 2023, house prices in the EU surged by 48%, and rents increased by 22%, according to Eurostat, the EU's statistics agency. This contrasts with a 36% inflation rate over the same period. Some regions experienced even steeper increases; for instance, rents in Estonia rose by 211%, in Lithuania by 169%, and in Ireland by 98%.

While the immediate impact is on EU citizens, the global nature of platforms like Airbnb means that regulatory changes in major markets could influence operational models and policies in other regions, including Kenya. Kenyan property owners and tourism stakeholders utilising these platforms will be watching these developments closely.

Evidence/Data Box

• EU House Price Increase (2010-2023): 48%
• EU Rent Increase (2010-2023): 22%
• EU Inflation (2010-2023): 36%
• Highest Rent Increase (Estonia, 2010-2023): 211%
• Proposed EU Housing Plan Publication: December 2025

Risks and Implications

For Kenya, where tourism is a significant economic driver and short-term rentals are increasingly popular, the EU's approach could have several implications. Stricter regulations in Europe might prompt a re-evaluation of existing frameworks or inspire similar legislative discussions in Kenya to balance tourism benefits with housing affordability for local residents. The Kenyan government, through bodies like the Tourism Regulatory Authority, could consider how such international trends might inform local policy to ensure fair competition and sustainable urban development.

Unknowns and Controversies

The specific details of the EU's proposed rules remain unknown, including how they will be enforced and their precise scope. It is also unclear how these regulations will differentiate between various types of short-term rentals and their potential impact on smaller, independent operators versus larger property management companies. The extent to which these rules will be harmonised across all EU member states, given their diverse housing markets, is also a point of uncertainty.

Timeline and Next Steps

The EU's affordable housing plan, including the proposed short-term rental rules, is expected to be made public in December 2025. This will initiate a period of discussion and negotiation among member states and stakeholders before any final legislation is adopted.

What to Watch

Stakeholders in Kenya should monitor the specifics of the EU's proposals, particularly concerning data sharing requirements, registration processes, and any limitations on rental periods. These elements could provide a blueprint for future discussions on regulating short-term rentals within Kenya, ensuring a balanced approach that supports both the tourism sector and the housing needs of its citizens.