The European Commission has proposed a common framework giving local authorities greater clarity and legal backing to restrict short-term rentals in areas experiencing housing stress, sending Airbnb shares down roughly 3%. Under the proposal, restrictions would need to be evidence-based, necessary and limited to affected areas rather than applied broadly or retroactively, and the legislation still requires approval from EU member states and the European Parliament. The framework follows restrictions already introduced by cities including Paris, Barcelona and Venice, and could make it easier for additional cities to follow their example. The proposal would not affect landlords renting their primary residence for short periods, protecting an important part of Airbnb's supply base, and its requirement that measures be necessary and proportionate could give the company a stronger basis for challenging excessive local rules. Airbnb's existing experience with EU registration and data-sharing requirements could also leave it better positioned than smaller operators to adapt, though the company faces a structural risk that one restriction after another gradually reduces supply in Europe's most important tourism markets.
Airbnb IncEU proposes a framework giving cities legal backing to restrict short-term rentals, a structural risk that could gradually reduce Airbnb supply in key European tourism markets.
