European Cities Confront Housing Crisis Amid Tourism Boom

European cities are grappling with a critical challenge: balancing the surge in tourism with the urgent need for affordable housing. This issue was the focal point of a recent debate hosted by Euronews at TheMerode in Brussels, where policymakers, urban planners, and industry representatives convened to discuss strategies for maintaining livability in the face of rising visitor numbers.

According to Eurostat, tourist accommodation in the EU recorded 3.1 billion overnight stays in 2025, marking an increase of 61.5 million nights or 2 percent from the previous year. Simultaneously, nearly three-quarters of Europeans reside in urban areas, a figure projected to rise further in the coming decades. These trends set the stage for the Future of Cities Forum, which featured prominent speakers such as Pierpaolo Settembri, Deputy Head of Cabinet to the EU Commissioner for Sustainable Transport and Tourism, and Nathan Blecharczyk, Co-Founder and Chief Strategy Officer at Airbnb.

Housing Affordability Under Pressure

The discussion highlighted the pressing issue of housing affordability, with Matthew Baldwin, head of the European Commission’s Housing Task Force, stating, “Cities are at the epicentre of this housing affordability crisis.” He emphasized that rising housing costs are increasingly affecting not only low-income households but also middle-income groups, including essential workers such as police officers and teachers. Baldwin noted that these trends undermine labor markets and overall competitiveness.

Several panellists, including Jan-Christoph Oetjen, a Member of the European Parliament, and Patrick Bontick, CEO of visitBrussels, identified decades of under-building and regulatory challenges as key contributors to the housing shortage. Baldwin reported a significant decline in building permits, with a drop of approximately 21 percent, stating, “Supply has not kept up with the surging demand, particularly in cities.”

Oetjen argued for the necessity of reducing administrative barriers to both new construction and renovation. Frank Hovorka, representing Build Europe, echoed these sentiments, underscoring regulatory constraints as a major obstacle to development.

Tourism Management and Data-Driven Solutions

The prevalence of short-term rentals emerged as a crucial topic. Panellists, including Baldwin, suggested that when properly managed, short-term rentals can help distribute tourism more evenly across urban areas and provide supplementary income for residents. Baldwin remarked, “We know there is a mesh of other issues affecting problems on the housing supply and the demand side, particularly in cities.”

Maria Regina Maroncelli Florio, Vice President of the European Large Family Confederation, emphasized the importance of considering the needs of families and long-term residents in urban housing strategies. She argued for prioritizing access to social housing and the preservation of community spaces as demographic shifts reshape European cities.

Tourism plays a vital role in the European economy, contributing roughly 10 percent of EU GDP and supporting about one in ten jobs. However, the rapid increase in visitors has raised concerns regarding how cities manage visitor flows and associated infrastructure. Bontick pointed out that the challenge is not simply overtourism but rather the uneven distribution of tourists across neighborhoods and seasons.

He advocated for enhanced data collection, as outlined in the EU’s new regulation on short-term rental data, stating, “With data we will gain the information needed to better manage cities and decide what kind of supply we want.”

Juliette Langlais, Director of Public Policy and Campaigns EMEA at Airbnb, highlighted the necessity of treating housing, mobility, tourism, and infrastructure as interconnected components of urban ecosystems. She called for evidence-based regulation of short-term rentals and collaboration among stakeholders to create transparent frameworks.

The conversation also addressed how urban design and management can adapt to evolving patterns of work, mobility, and tourism. New research from Airbnb indicated that over 80 percent of Europeans have experienced a need for flexible housing arrangements, suggesting that short-term rentals could serve as essential infrastructure during transitional periods.

Carlo Ratti, director of the MIT Senseable City Lab, discussed the potential of new technologies and real-time data analytics to provide insights into urban dynamics. He asserted that these tools could facilitate collaboration among governments, businesses, and researchers to develop solutions tailored to the needs of modern cities.

Baldwin concluded by stressing the importance of transactional transparency in the housing sector, which could enable responsive approaches to emerging urban challenges.

The discussions in Brussels paved the way for the establishment of the Future of Cities Coalition, a new pan-European initiative aimed at fostering cross-sector dialogue. The coalition seeks to promote coordinated strategies for housing, tourism, and urban planning, acknowledging that treating these areas as interconnected is essential for effective governance.

As European cities continue to evolve, the challenges of managing growth and ensuring community well-being remain paramount. The outcomes of the Future of Cities Forum underscore the urgent need for collaboration among policymakers, stakeholders, and communities to create sustainable urban environments.