German states have accused the EU Commission of overstepping its jurisdiction with a new housing market regulation. The Federal Council formally submitted a subsidiarity complaint to Brussels on Friday, according to “Welt am Sonntag.”
The EU Commission introduced the “Affordable Housing Act” in early September. At its core, the act aims to establish uniform, continent-wide rules for stressed housing markets and impose restrictions on short-term rentals to tourists. In many major cities, particularly in the Mediterranean region, the private rental of tourist apartments has placed enormous strain on the housing market. If the EU regulation were implemented, it would have far-reaching consequences for cities and municipalities in Germany. These local entities have already put in place their own rental house rules, which, from the perspective of the countries’ chamber, would conflict with the new proposals coming from Brussels.
The Building Minister for North Rhine-Westphalia, Ina Scharrenbach (CDU), told the newspaper that authority over housing policy belongs with the states and municipalities, not with Brussels. She added that the need for more housing cannot be measured using a standardized template from the EU.
Scharrenbach pointed out that North Rhine-Westphalia had already established clear rules to protect housing through the Housing Strengthening Law, and these instruments should not be weakened by new European hurdles. Furthermore, she warned that new bureaucracy would emerge, as German municipalities would have to collect and analyze data completely different from what they do currently.
According to the “Housing Act,” stricter rules against short-term rentals can only be enforced in areas under specific conditions of “housing market stress.” Under the Commission’s definition, such an area must be characterized by housing purchase prices exceeding eight times local incomes. This ratio would need to have worsened over ten years, and no easing is expected in the coming three years.
However, the German states have already designated more than 700 areas with a “stressed housing market” based on specific rent price parameters, and within these zones, municipalities can implement a rent price brake. The Commission’s proposal, conversely, would require a new “registration and enforcement system for short-term rentals.” This would impose additional costs and administrative work on local authorities and could prevent smaller communities from taking these measures altogether.
