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In many tourism hotspots, from Barcelona to Paris, locals struggle to access affordable housing. Are vacation rentals to blame?

With the stunning Sagrada Familia basilica, whimsical Parc Güell, and the historic old town, it's no surprise that Barcelona is one of the most popular tourist destinations in the world. In 2023, 15.6 million holidaymakers visited the Basque city. Yet such high tourist numbers have had serious consequences for the city as locals struggle to find affordable accommodation because buildings are transformed into vacation rentals. "This is the biggest problem in our city," Mayor Jaume Collboni said at a recent press conference, where he went on to announce that by November 2028, the city will no longer issue vacation rental licences to properties, and that no existing licences will be renewed. Currently, there are more than 10,000 rental apartments in Barcelona. By 2029, no homes will have permission to be rented as short-term tourist accommodations.  

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Rent on the rise in Barcelona

According to Collboni, the price of rent in Barcelona has gone up by 68% in the past ten years, while the price of property for sale has increased by 38%. "For people who earn an average income, this has become a real problem," he said. Konstantin Kholodilin, a scholar at the German Institute for Economic Research, studies the impact of vacation rentals on the real estate market. "The more vacation apartments there are, the more rent rises," he says. He says on average, the rise is between 2-3%, although this varies depending on the location. Vacation rentals have also made real estate prices increase, as buyers are interested in investing in properties they can rent to tourists.

The vacation rental market has boomed since the emergence of Airbnb and other short-term rental sites. According to European statistics office Eurostat, online platforms arranged more than 700 million overnight stays in the EU in 2023. This is up from 440 million stays counted in 2018. According to the German Holiday Home Association, almost half of overnight stays made by tourists in Germany are in short-term rentals instead of hotels. As a result, politicians in major cities around the world are putting restrictions on short-term rentals. 

The regulation that has been in force in New York for more than a year is just as radical as the one in Barcelona. New York short-term rentals for less than 30 days are now only possible if the apartment is officially registered and the landlord is living in the apartment. In addition, a maximum of two guests may be accommodated. "Apartments should be for New Yorkers, and hotels for tourists," said Ben Kallos, a city council member involved in implementing the new regulation. Paris, Amsterdam, Berlin, Lisbon and other popular tourist destinations are also imposing tough restrictions on vacation rentals.

Saying no to foreign buyers

The fact that more and more people are buying property abroad in popular holiday destinations also contributes to tense housing situations. Recent protests on the Canary Islands, for example, were directed against property developers and agents targeting foreign buyers as residents struggle to access affordable housing. Similarly, on Spain's Balearic Islands, every third property is sold to buyers who are not residents of Spain. Such sales pit Spanish earners against buyers from northern Europe where salaries are higher.

In order to reduce the strain on the domestic real estate market, various countries, including Denmark, Finland, Croatia and Malta, restricted the sale of real estate to non-residents years ago. Meanwhile, new EU regulations on vacation rentals also promise positive change. The measures will help facilitate data sharing between online platforms and the respective local authorities and help to combat illegal vacation rentals.

Doubts about the effectiveness of regulations

It remains to be seen whether laws put in place to regulate the vacation rental market will ultimately prove effective. According to Konstantin Kholodilin, studies have shown that both property prices and the number of vacation homes offered on rental platforms have fallen as a result of regulations in some cities. But the expert is sceptical that regulating vacation rentals alone will ease the tense housing situation.

Barcelona's tourist apartments association Apartur is also highly critical of the city council's decision to abolish vacation rentals. According to Enrique Alcantara, chairman of the association, the law will simply lead to more illegal offers. Alcantara points out that short-term rental apartments make up just 0.77% of the city's total housing. He says ban is therefore nothing more than a "cover for the failure of housing policy."

Author Jonas Martiny

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