The European Commission has proposed the European Union's first common framework for identifying housing stress and regulating short-term rentals such as Airbnb, as housing affordability worsens across the bloc. The proposal forms part of the Affordable Housing Act and is intended to clarify when local authorities can restrict tourist accommodation without breaching EU single-market rules. Member states and the European Parliament must approve legislation before it can take effect. The framework would assess housing stress using indicators including high or rapidly rising housing-price-to-income ratios, demographic trends, and projected supply and demand. Local measures would need to be evidence-based, necessary, proportionate, non-discriminatory and limited to affected areas, with no retroactive application. Authorities would retain discretion over whether to impose restrictions, while homeowners letting their primary residence for short periods would be exempt. The Commission also called for more housing supply through land allocation and faster planning and construction procedures. Property prices have risen 60% and rents 20% across the EU over the past decade, while short-term rentals represent about 1.2% of total housing stock but as much as 20% in some popular tourist districts. Airbnb said governments should focus on supply shortages, while CCIA Europe warned that allowing municipalities to assess their own rules could perpetuate disproportionate restrictions and legal uncertainty.