European cities will have greater powers to restrict short-term rentals such as Airbnb under EU plans unveiled on Wednesday aimed at tackling rising housing costs in popular tourist destinations.The European Commission set out conditions under which local authorities will be able to limit short-term lets as part of its affordable housing package, designed to address what Commission Vice-President Teresa Ribera described as a “terrible crisis”.“When the market fails to deliver something as fundamental as an affordable home, public authorities have a responsibility to act”, Ribera said.Short-term rentals are popular among tourists, but residents in cities such as Lisbon, Barcelona and Prague have blamed platforms like Airbnb for reducing the supply of homes available for long-term rent and driving up prices, sometimes forcing locals to move elsewhere.EU data from 2024 shows that nearly 10% of people living in EU cities spend more than 40% of their disposable income on housing.However, the Commission’s upcoming restrictions would be allowed only in areas with clear evidence of serious housing pressure.For Airbnb-style rentals, the EU is particularly concerned about commercial operators running several properties as holiday lets, rather than people occasionally renting out their own home.Under the proposal, cities would be able to target professional multi-property operators, but a person’s ability to rent out their main residence would be protected.However, the Commission acknowledges that short-term rental restrictions and limits on second homes can’t solve Europe’s structural housing shortage. Other challenges include high construction costs, expensive land, planning restrictions and lengthy permit processes.”Europe’s housing crisis needs structural solutions, and the implementation of this act should focus on increasing the supply of homes,” said an Airbnb spokesperson.