EU law will tighten rules on Airbnb and short-term lets in Germany

The European Commission has proposed a law to restrict Airbnb and other short-term let companies in an effort to address the affordable housing crisis.

EU proposes law on short-term lets

European Commission vice president Teresa Ribera has presented the Affordable Housing Act, which would regulate Airbnb and other short-term let companies in a bid to reduce the affordable housing crisis.

The law would give local authorities greater power to regulate short-term lets and purchase short-term let properties in areas “under housing stress”. Certain countries, including Germany, already have methods for identifying areas “under housing stress”. 

However, the act will introduce a common methodology for assessing housing stress and “common procedural requirements governing the justification, proportionality, transparency and review of those measures”. 

Before introducing restrictions, local authorities must show that short-term lets have reduced local affordable housing availability over the previous three years.

Germany’s existing rent brake law, which prevents landlords from charging rents more than 10 percent over the rent index-set legal limit in areas under housing stress, does not currently apply to units built after 2014, short-term or furnished lets.

While people across all major German cities struggle to find an affordable, long-term rental contract, short-term lets are booming. In August, holiday accommodation bookings in Germany reached an all-time high.

"When the market fails to deliver something as fundamental as an affordable home, public authorities have a responsibility to act," Ribera said, while announcing the policy.

Following the EU’s standard legislative process, the Affordable Housing Act will now undergo three parliamentary readings, during which some details may change. The law will go to a vote, and if adopted, will be implemented 20 days later. The Act will then be reviewed in five years. 

50 percent fear flat search will be unsuccessful

The EU Commission’s announcement comes shortly after a report found that half of all residents in Germany begin their search for a new house fearing they will be unsuccessful.

According to Rent Report 2026 by the German Tenants’ Association (Deutsche Mieterbund), 29 percent of residents fear they will not be able to afford their rent in the future. 58 percent said their rent and utility bills had increased in the last 12 months.

“For more and more people, housing is becoming a risk of poverty and social decline,” Mieterbund president Melanie Weber-Moritz said at a press conference.

“And the welfare state is increasingly having to step in to address what is going wrong in the housing market. The housing crisis is turning into a crisis for the welfare state.”

The number of social housing units in Germany also sits at a record low. According to government statistics, the number of social housing units has fallen from 2.3 million in 2007 to 1.05 million in 2024.

This is because the federal government, state governments and local authorities have sold off large numbers of social housing units since the 1990s. At the same time, many social housing tenants have seen their “social binding” rental contract come to an end.

These social housing contracts typically last 10 to 15 years. When they come to an end, tenants can choose to stay in the property, but the rent is adjusted to market rates.