Brussels is preparing the Affordable Housing Act, a European legislation that aims to establish criteria so that Member States, cities, and regions can impose proportional measures on short-term tourist accommodations in areas with greater housing pressure. The European Commission justifies this intervention with the legal uncertainty faced by several cities that tried to restrict tourist accommodation, frequently challenged under European rules on freedom to provide services. The Court of Justice of the European Union already ruled in 2020 that restrictions can be justified by housing scarcity objectives, as long as they are proportional, but the definition of that proportionality continues to generate disputes.
The problem behind this legislation is the imbalance between tourist and housing supply in certain destinations. According to data from the European Commission's Joint Research Centre, short-term accommodations represent approximately 1.2% of the EU housing stock, but in some tourist destinations they can account for 20% of homes. In 2025, Portugal recorded 49.5 million overnight stays in short-term accommodations booked through online platforms, of which 42.5 million corresponded to international visitors.
In Portugal, Lisbon, Porto, and Funchal have already created their own mechanisms to stop new local accommodations in areas of greatest concentration. Lisbon considers absolute containment areas when the ratio between local accommodations and permanent housing units is equal to or greater than 10%, and relative containment between 5% and 10%. Porto has containment areas in the parishes of the historic center and sustainable growth areas in the rest. Funchal, with a more recent regulation, has placed practically the entire municipality under containment, with restrictions on granting new registrations, although with exceptions for rehabilitated or vacant properties for more than three years.
The future European legislation will not impose a European limit on the number of Airbnbs, but aims to create clearer rules so that a city can demonstrate that a particular restriction is necessary and proportional to the housing pressure it faces. For Portugal, this means that Lisbon, Porto, Funchal, and other municipalities may gain greater legal certainty to continue differentiating territories, allowing local accommodations to grow where there is space and be stopped where pressure on permanent housing is already excessive.
