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European Commission headquarters, Brussels
Two announcements landed on REFIRE's desk a day apart earlier in the month. On 9th September, the European Commission proposed a framework to give municipalities firmer legal ground for restricting short-term holiday lettings in pressured housing markets. The next day, the Berlin Administrative Court backed Neukölln’s power to stop an owner turning formerly permanent homes into expensive furnished lets of three to twelve months.
The measures concern different markets and rest upon different bodies of law, but both ask the same question: does an apartment stay part of the housing supply just because someone is still sleeping in it? Owners, particularly in Berlin, can no longer rely upon the label attached to a tenancy if its practical effect is to remove the property from the ordinary rental market.
What Brussels is proposing
The Affordable Housing Act would neither ban short-term letting nor hand Brussels power over where Airbnb operates. Decisions would remain with national governments, regions and municipalities.
Instead, it would offer common criteria for justifying local restrictions without breaching EU single-market rules. An area could qualify as facing a housing crisis where average apartment prices run to at least eight times annual disposable income per capita and that ratio has risen over the past decade. No historical increase would be required if the ratio already stood at ten or above.
Authorities would also have to show that short-term lettings had materially damaged housing availability or affordability over at least three years, with no improvement likely during the following three. Any restrictions would have to be necessary and proportionate, could not apply retrospectively and should generally last no longer than five years.
The Commission therefore accepts that holiday lets do not strain every market and can provide households with useful income. But it says they already account for as much as 20% of housing in some popular city centres. Housing Commissioner Dan Jørgensen put the political case plainly: “ordinary people with ordinary jobs—nurses, teachers or police officers—often cannot afford to live where they work.”
The proposal is separate from the EU regulation on collecting data from short-term accommodation platforms, applicable since May. That measure is intended to establish who is letting what, and for how long; the new legislation would help determine when the resulting evidence justified intervention.
Some of that evidence is already striking. Oberstdorf has around 10,000 residents and 6,400 apartments, some 2,700 of which are also registered as holiday accommodation. Munich estimates its own holiday-let stock at between 11,000 and 17,000 units, with the incentive especially visible during Oktoberfest, when some apartments reportedly command four-figure nightly rates. Its forthcoming registration system should give the city the information needed to enforce its eight-week annual limit on letting entire apartments to tourists.
ZIA welcomes greater legal certainty but argues that Brussels is treating a symptom rather than Europe’s underlying failure to build enough homes. Airbnb’s response is blunter still: the proposal “will not bring a single flat onto the long-term rental market.”
That criticism is not entirely wrong. Restricting holiday lets cannot fix slow planning, high construction costs or insufficient development. But building more homes and preventing existing ones from leaking out of the rental market are not rival policies.
Berlin targets the middle ground between homes and holiday lets
The Berlin judgment has nothing to do with Airbnb or tourists. It concerns Wohnen auf Zeit—furnished apartments and rooms let on fixed terms long enough to resemble ordinary housing but priced well above it.
The claimant owned a building in a Neukölln Milieuschutzgebiet, an area protected to preserve the composition of its resident population. Fifteen units previously let permanently had been switched to tenancies of between three and twelve months. The average all-inclusive rent was €23.26 per sqm for an entire apartment and €32.63 for an individual room, covering furniture, heating, service charges and Wi-Fi. The locally typical warm rent excluding furniture, the court noted, was €10.37 per sqm.
Neukölln prohibited the practice in December 2025. The owner sued, arguing that the apartments were still homes and that no permission was therefore required under the neighbourhood-protection rules.
The court disagreed. Switching formerly permanent apartments to furnished, fixed-term letting counted as a change of use requiring approval—and what mattered was not whether people continued to live there, but which people realistically could.
The owner’s model, the court found, excluded households with children and people on lower incomes, precisely the population the ordinance was intended to protect. That gave the change a displacing effect, regardless of whether the apartments remained residential in the narrower planning sense.
The court dismissed the claim but did not establish a blanket rule. It neither found every furnished or fixed-term tenancy in a protected area unlawful nor set a general limit on furniture supplements or all-inclusive rents.
Even so, the judgment supports the proposition that a letting’s duration, price and target market can alter its function under neighbourhood-protection law despite its continued physical use as housing. It gives Berlin’s districts a planning-law route into these business models, without first having to prove a breach of the Mietpreisbremse or the notoriously difficult offence of rent exploitation.
Berlin’s Senator for Urban Development, Christian Gaebler, called the ruling a basis for wider enforcement across the city’s social-preservation areas. Friedrichshain-Kreuzberg councillor Florian Schmidt said his district alone had pending cases involving more than 300 flats.
The judgment nevertheless concerns a particular business model in one Milieuschutzgebiet, and the court has permitted an appeal to the Higher Administrative Court of Berlin-Brandenburg. It is an important first-instance ruling, not the last word on temporary letting across Berlin.
REFIRE: Brussels and Berlin are working at opposite ends of the same market. One seeks to build the evidence and legal machinery for regulating holiday lets; the other has held that an expensive three-to-twelve-month tenancy can amount to a change of use in a protected neighbourhood.
Neither move bans furnished or temporary letting outright. But owners can no longer assume that an apartment remains part of the ordinary housing market merely because its occupants stay for months rather than nights. The loophole has not closed everywhere. It has acquired a registration number, a paper trail and, in Berlin, an adverse judgment.