A proposal, not a law
COM(2026) 599 final is a legislative proposal of the European Commission. It has no binding effect on any owner, operator or authority. To become law it must be negotiated and adopted by the European Parliament and the Council under the ordinary legislative procedure; as a proposal for a Regulation, if adopted it would be directly applicable according to its final terms. Each of these stages regularly changes thresholds, definitions and safeguards, and the housing file is politically sensitive in exactly the Member States whose cities drove it.
The proposal is accompanied by three Commission staff working documents, SWD(2026) 605, 606 and 607, which contain the impact assessment material, the evidence base on housing affordability and the analysis of short-term rental effects. They are not law either, but they are the most reliable guide to how the Commission intends the operative provisions to be read, and to the methodology an authority would be expected to follow.
A separate instrument, Recommendation 2026/2069 of 15 September 2026, accompanies the package. A recommendation is by its nature non-binding. It should not be conflated with the proposed act: it addresses practice and encouragement, not obligation, and an authority that follows it acquires no immunity from the proportionality review the proposed act itself would impose.
The data layer already in force
The proposal does not arrive on empty ground. Regulation (EU) 2024/1028 on data collection and sharing relating to short-term rental services already establishes the registration and information architecture: registration procedures for units offered for short-term rental, a unique registration number, obligations on online platforms to verify and transmit data, and channels through which competent authorities receive activity data.
That regulation is deliberately a transparency instrument rather than a restriction instrument. It does not authorise anyone to prohibit or cap short-term rental activity; it makes the activity visible and measurable. The Affordable Housing Act proposal is the second step, and is designed to operate on the evidence the first step produces.
For owners and operators the practical consequence is that the registration data generated today is the same data that would be used tomorrow to establish, or to contest, whether a given area qualifies as being under housing stress and whether short-term rental activity there has an adverse effect. Data quality, correct classification of a unit and consistency of declarations therefore cease to be administrative housekeeping and become an evidential position.
Cali Apartments and the Services Directive
The legal background is the Services Directive, Directive 2006/123/EC, and the judgment of the Court of Justice in Joined Cases C-724/18 and C-727/18, Cali Apartments. The Court accepted that a national authorisation scheme for the repeated short-term letting of furnished residential accommodation may be compatible with the Directive where it pursues an overriding reason in the public interest — in that case the supply of affordable long-term housing — and is proportionate to that objective.
Cali Apartments did not give authorities a free hand. It required that the objective be genuine, that the scheme be justified by the situation of the particular territory concerned, and that the conditions imposed be clear, unambiguous, objective, transparent, accessible and proportionate. Much of the litigation since has turned on whether a municipality could show, on evidence, that the restriction it imposed was necessary in the area where it applied.
Read against that background, the proposal is best understood as an attempt to codify and standardise the proportionality analysis the Court left to be performed case by case. That is why its operative content consists largely of thresholds, evidentiary requirements and review obligations rather than prohibitions.
Identifying a housing-stress area
The proposal would allow restrictions on short-term rental activity only in territorially delimited areas identified as being under housing stress. Identification would rest on affordability indicators, in particular a price-to-income ratio, with the proposal working from thresholds of the order of 8 for purchase affordability and 10 in the more acute configuration, assessed against a ten-year trend and a three-year forward outlook rather than a single year's figure.
The territorial element is central. An area must be delimited on the evidence that applies to it; a national or regional average cannot be used to justify a restriction in a municipality or district that does not itself meet the criteria. Conversely, a city where affordability has deteriorated consistently over a decade and is projected to continue deteriorating is precisely the configuration the thresholds are designed to capture.
The consequence, in TCC's view, is a shift from political designation to methodological designation. Authorities would still choose whether to act, but would have to justify where they act by reference to a published metric that an affected owner can examine and, if necessary, challenge.
Demonstrating a significant adverse effect
Identifying an area under housing stress would not by itself permit a restriction. The proposal would additionally require the authority to demonstrate that short-term rental activity has a significant adverse effect on the availability or affordability of housing in that area, established over a period of at least three years. A single season of visible tourist pressure would not suffice.
This is where Regulation (EU) 2024/1028 becomes operative in practice. The registration and platform data it produces is the natural evidential base for a three-year demonstration, and authorities that have implemented it properly will be able to make the showing far more readily than those that have not.
The requirement cuts both ways. An operator faced with a restriction would be entitled to examine the evidence relied upon, to test whether the three-year period was properly assessed and to argue that the observed housing pressure is attributable to supply constraints, construction rates or demographic change rather than to short-term letting.
Less restrictive measures, primary residences and second homes
The proposal embeds a least-restrictive-means test: before adopting a restriction an authority would have to consider whether a less intrusive measure — registration conditions, data obligations, quality or safety requirements, targeted taxation, or caps applied to a narrower class of unit — would achieve the objective. A general prohibition adopted without that analysis would be vulnerable.
A distinction between primary and non-primary use runs through the proposal. Occasional letting of a genuine primary residence is treated as a materially different phenomenon from the permanent commercial dedication of a dwelling to short-term letting, and the proposal contemplates that restrictions bear principally on the latter. Second homes and units in dedicated tourist stock occupy an intermediate position whose treatment is likely to be one of the most negotiated points of the file.
For investors, this means that the characterisation of a unit — primary residence, second home, dedicated short-term rental asset, or part of a professionally operated portfolio — becomes the single most consequential classification in the whole framework.
Legal certainty, transition and existing measures
The proposal contains safeguards intended to protect legal certainty: restrictions would have to be published with their evidential basis, limited in scope to what the evidence supports, subject to periodic review in the light of updated indicators, and open to judicial review. Transitional arrangements are contemplated for activity lawfully carried on before a restriction takes effect.
Measures already in force in Member States are addressed separately: the proposal's Article 14 point is that the proposed Regulation would not apply to measures adopted before its entry into force, while competent authorities may voluntarily review such existing measures under the new framework. In TCC's analysis this may create an asymmetry between legacy measures and new measures adopted under the framework, while existing measures remain subject to whatever other applicable EU or national law governs them.
TCC's view is that the review obligation is the most underestimated element of the package. A restriction that must be re-justified periodically against updated indicators is a restriction that can be lifted as well as imposed, and that introduces a genuine two-way dynamic into a field that has until now moved in one direction only.
What this means for owners, investors and operators
The first implication is that regulatory risk becomes more structured rather than necessarily lower. An owner in a European city today faces the risk of an abrupt municipal decision; under the proposed framework the same owner would face a decision that must be evidenced, delimited, published and reviewable. That is a different risk profile, not an absence of risk, and in acutely stressed markets it may legitimise restrictions that would previously have been challenged successfully.
The second is that the framework both empowers and constrains local authorities. It gives them a recognised methodology and a defensible legal basis where the evidence supports action; it denies them the ability to act where it does not. For an investor, the relevant diligence question changes from what has the municipality done to what do the indicators for this specific area show, and what does the registration data say about short-term rental penetration there.
The third is evidential. Data generated under Regulation (EU) 2024/1028 can become the basis for future restrictions in the very areas where an asset is held. Accurate registration, correct use classification and coherent occupancy records are, in TCC's analysis, now part of asset management rather than compliance administration, and they are equally the material from which a challenge to a disproportionate restriction would be built.
Switzerland: no direct application, possible benchmark effect
Switzerland is not a Member State of the European Union and the proposal, if adopted, would have no direct application in Swiss law. Neither COM(2026) 599 nor Regulation (EU) 2024/1028 creates any obligation for Swiss owners, Swiss operators or Swiss authorities in respect of property situated in Switzerland, and no bilateral instrument extends this field to Switzerland.
What the proposal could produce is a benchmark effect. Swiss housing policy is a cantonal and communal matter operating alongside federal instruments, and the Federal Office for Housing publishes material on short-term rental and its interaction with the residential market. A published European methodology for identifying housing-stress areas and for evidencing an adverse effect could, if adopted and operational, become comparative or reference material for Swiss policymakers, authorities, practitioners or courts when examining similar proportionality and evidence questions; it would not be binding, and there is no assumption that Swiss authorities or courts would follow it.
Swiss owners with European exposure are of course directly affected in the jurisdictions where their assets are located. In TCC's view that is the immediate practical concern; the methodological influence on Swiss practice is a slower and less certain phenomenon that should be observed rather than anticipated.
The Ticino case study
Ticino is instructive because it moved early on the part of the problem the European package treats as its first step: identification, registration and data visibility of short-term rental activity. The canton has developed administrative instruments for identifying units offered for short-term letting and for capturing activity data, and the subject has been the object of cantonal legislative and parliamentary attention.
It is important to state precisely what Ticino has not done. There is no general canton-wide housing-stress methodology of the kind the European proposal contemplates, with affordability thresholds, ten-year trends and three-year outlooks delimiting where restrictions may apply. Equally, the ninety-day figure that circulates in public discussion is not a blanket canton-wide prohibition on letting beyond ninety days; it operates as a threshold within specific rules and municipal planning contexts, and its effect depends on the commune, the zoning and the use classification of the unit concerned.
In TCC's analysis, Ticino is therefore well positioned in one specific respect: because it already possesses administrative and data infrastructure, it could assess an evidence-based approach, if it chose to, without first building the measurement layer that most jurisdictions still lack. Whether it should do so is a political question on which this Insight takes no position.
The TCC perspective
The most important thing to say about the Affordable Housing Act in September 2026 is that it is a proposal. No owner is subject to a new restriction because of it, no municipality has acquired a new power under it, and its thresholds and safeguards may all change before adoption. Commentary that presents its content as the new European rule on short-term rentals is wrong as a matter of law.
What is true is that the direction of European housing regulation is now explicit, that the data infrastructure supporting it is already enacted and operating, and that the analytical framework being proposed — measurable stress, demonstrated adverse effect, least restrictive means, periodic review — is likely to shape practice well beyond the text finally adopted.
TCC Tax & Corporate Consultants SA follows this file at the level of the primary instruments and distinguishes in its advice between what is in force, what is proposed and what is analysis. For clients holding European residential or short-term rental assets, or considering acquisitions in cities where affordability indicators are deteriorating, the appropriate step now is a documented review of use classification, registration position and holding horizon, so that the response to the final text is a confirmation rather than an improvisation.