The European Union has fired a regulatory warning shot at the booming short-term rental market, a move that is now echoing in Nairobi's corridors of power and among its increasingly squeezed residents. The plan, championed by the EU's first housing commissioner, Dan Jørgensen, aims to tackle soaring housing costs by bringing platforms like Airbnb and Booking.com under tighter control.

For Kenyans, this is more than a distant European policy shift. It is a potential blueprint for addressing a crisis hitting home. Nairobi is grappling with a severe housing deficit, estimated at over 2 million units, where the supply of 50,000 new homes annually meets only a fraction of the 250,000-unit demand. The unchecked rise of short-term lets is now seen as a significant contributor to this pressure cooker.

Nairobi's Rental Market Under Strain

The allure of higher returns from tourism has led many landlords to convert long-term residential properties into short-stay lets. A recent report noted that this shift can generate 30-60% more annual income than a standard lease, dramatically increasing property prices in popular areas like Kilimani and Westlands. This trend directly impacts housing availability for residents, with one report suggesting that 15% of Nairobi's housing units have already transitioned to short-term rentals, contributing to a 10% rent increase over two years.

The EU's strategy focuses on increasing transparency and empowering local authorities. Key measures include:

• Mandatory Registration: Hosts will need a registration number to list their properties, making it easier for authorities to track rental activity.
• Data Sharing: Platforms will be required to share data on rental frequency and guest numbers with a central digital hub in each country.
• Verification and Enforcement: Online platforms must make reasonable efforts to verify listings, and authorities can impose fines or remove non-compliant ads.

A Blueprint for City Hall?

While Kenya has some regulations under the Tourism Act of 2011, which requires licenses for serviced apartments, there is no dedicated statute specifically for online platforms like Airbnb. This regulatory grey area has allowed the short-term rental market to expand rapidly, intensifying competition for homes and pushing long-term tenants to the city's fringes. The government's own Affordable Housing Programme has struggled to keep pace, delivering only 1,795 homes in the year ending June 2025 despite collecting over KES 73 billion from the housing levy.

Analysts suggest that the EU's data-driven approach could offer a viable path for Nairobi. "Policymakers face a delicate task: harnessing the economic benefits of short-term rentals without deepening the housing crisis," one report warned. Adopting similar transparency rules would provide Kenyan authorities with the critical data needed to understand the market's true impact and craft informed, proportionate regulations.

As Brussels prepares to implement its new rules over the next 24 months, the critical question for policymakers in Nairobi is no longer if they should act, but how. The answer will determine whether the city's housing market serves its residents or remains a playground for speculative investment.