The event, organized by SME Connect, took place on July 14 at the European Committee of the Regions (CoR) under the motto “Regions, Cities, Municipalities and the Local Economy at the Heart of Europe’s Housing Debate”. ELFAC was represented by Kinga Joó, vice president.
The debate took place shortly after the EU Short-Term Rental Regulation became applicable on 20 May 2026 and ahead of the forthcoming Affordable Housing Act. The Regulation primarily establishes a European framework for registration, transparency and data sharing, while the Affordable Housing Act is intended to provide Member States, regions and local authorities with tools that can be applied according to local housing pressures and in respect of subsidiarity.
Moderated by Dr. Horst Heitz, Chair of the Steering Committee of SME Connect, the roundtable included Kinga Joó, Vice-President and Board Member of ELFAC and the European Network of Family-Friendly Municipalities and also Member of the European Economic and Social Committee; Grégory Huon, President of STR Belgium; George Mavros, Head of EU Government Affairs at Airbnb; Jiří Zapletal, Representative of the Executive Board to the EU and Director of European Affairs at the German Savings Banks Association; Federico Nahuel Lazzari, Secretary-General of Build Europe; and Victor Vaugoin, Head of the Lower Austria Office in Brussels.
Together, the speakers brought perspectives from families, regions and municipalities, construction and property development, regional banking, SMEs, short-term accommodation and the platform economy.
The challenge is therefore not simply to build more housing everywhere. Additional supply is urgently required in areas under pressure, while other regions need to renovate, convert and reactivate existing buildings. The scale of the overall challenge remains substantial. The European Commission estimates that Europe needs more than two million new homes annually, around 650,000 more than are currently being built. Closing this gap would require approximately EUR 150 billion in additional investment each year.
These figures reinforce the central message of the workshop: affordable housing cannot be delivered through regulation alone. It requires supply, investment, financing, land, infrastructure and economically viable construction.
The discussion also showed that housing policy cannot be separated from infrastructure and territorial connectivity. While major cities urgently need additional housing, other regions must activate vacant buildings, attract investment and improve their demographic and economic prospects.
Better connections between metropolitan areas and surrounding rural regions can help reduce pressure on urban housing markets while creating opportunities for smaller towns and rural districts. Examples were presented of German municipalities developing mobility solutions for residents who work in nearby cities but prefer the affordability, space and quality of life available in rural communities.
Public transport, road connections, digital infrastructure and access to healthcare, education and public services determine whether this is a realistic option. Rural regions are not peripheral to the economy; speakers noted that they account for almost half of Germany’s economic output.
The right to stay
This territorial perspective connects housing directly with the European Right to Stay agenda, which was also highlighted by Kinga Joó from the perspective of families and communities, as vice-president of the European Large Families Confederation (ELFAC).
A few key messages from her intervention:
- Housing is also demographic policy. The newly launched Demography Report 2026 reminds us that fewer people do not automatically mean less demand for housing. As households become smaller and populations age, Europe will need more homes – but above all different homes, designed for changing household structures.
- Families must be part of the housing debate. Only around 23% of EU households include children, yet families with three or more children – just 12% of households with children – are raising more than one quarter of Europe’s children. Despite their demographic importance, their specific housing needs are rarely reflected in housing strategies.
- The Right to Stay starts with affordable and suitable housing. People should be able to remain in the communities where they work, raise their children and care for their loved ones. But housing alone is not enough. It must go hand in hand with employment, education, healthcare, mobility and quality local services if we want communities to remain vibrant and resilient.
- Municipalities are indispensable partners. Local governments know where affordable housing is needed, where infrastructure is lacking and which investments can strengthen communities. We therefore need stronger support for municipalities, including easier access to EU funding for affordable, sustainable and family-friendly housing.
- Short-term rentals also deserve a family perspective. While local housing pressures must be addressed, we should also recognise that for many large families short-term rentals are often the only affordable way to travel together – not only as tourists, but also for family visits, caring responsibilities, etc.
Short-term rentals debate
The debate has highlighted how short-term rentals illustrate the ease with which European housing policy can become disconnected from the various local realities.
Member States, regions and municipalities already possess extensive instruments to address local problems through planning law, registration, licensing, taxation and restrictions on use. The EU Short-Term Rental Regulation strengthens their ability to act by improving data availability and cooperation with platforms, while expressly preserving necessary and proportionate national market-access requirements.
Europe’s housing crisis is fundamentally driven by insufficient housing supply rather than short-term rentals. Therefore, any regulation measure on short-term rentals proposed under the Affordable Housing Act initiative should systematically be counterbalanced by a mandatory proportionality test, including an economic assessment of the measure, in order not to dramatically affect small local businesses while not solving the root cause of the housing crisis.
Further uniform restrictions at EU level would risk duplicating existing powers and directing political attention towards symbolic intervention rather than the structural causes of the housing shortage: insufficient supply, high costs, weak investment capacity and lengthy procedures.
Where reliable evidence demonstrates a material impact on housing supply in a pressured urban market, proportionate local restrictions may be justified. In rural and tourism-dependent regions, however, short-term accommodation can support family incomes, finance renovation, activate vacant properties and sustain local services and small businesses.
It can also fulfil legitimate social needs. Larger families and groups may require accommodation that is unavailable or disproportionately expensive in conventional hotels.
Disproportionate restrictions could therefore create economic and social harm without meaningfully increasing the long-term housing supply. The appropriate European role is to provide transparency and enforcement cooperation, while substantive decisions remain with the authorities able to assess the actual local situation.
The principle of subsidiarity
The principle of subsidiarity was strongly emphasised. Well-intended European initiatives are welcome where they provide practical support and strengthen the ability of regions and municipalities to act. They must not lead to overregulation or a gradual transfer of competences away from regional and local authorities.
The value of European action should be measured by whether it enables housing to be built, renovated and financed and whether it strengthens local capacity—not by the number of new rules or initiatives adopted.
The roadmap emerging from the debate is therefore coherent. Europe should mobilise investment, protect and strengthen regional financing structures, facilitate innovation, improve access to cohesion instruments and reduce unnecessary regulatory complexity. Member States, regions and municipalities must retain the responsibility and flexibility to apply these instruments according to their own housing markets.
Effective housing policy must combine subsidiarity, economic realism and social responsibility. By empowering those responsible on the ground, European action can contribute to more affordable housing, stronger local economies, better-connected regions and a credible Right to Stay.