Unregulated short-term rentals significantly impact the housing market in Europe. While not the sole reason for rising prices, their influence cannot be denied. According to Eurostat data, rents in EU countries increased by an average of 18% between 2010 and 2022. Cities most sought after by tourists experienced much higher values. In the Czech Republic, the regulation of short-term rentals may be addressed by a recently discussed amendment to the law and the creation of the eTourist system.
Unregulated short-term rentals (STRs) have a profound impact on Europe’s housing market. While they are not the sole cause of rising housing costs, their influence cannot be ignored. According to Eurostat data, rents in EU countries increased by an average of 18% between 2010 and 2022, with cities popular among tourists experiencing much higher growth rates. Prague is among the top 20 European cities where tourists most frequently use STRs via online platforms, with over 4.6 million users in 2023.
The rapid expansion of STRs underscores the need for regulation at both local and European levels. In April 2024, the EU introduced Regulation (2024/1028), mandating member states to establish unified digital contact points for identifying STR providers. This initiative aims to centralize data collection, enhance transparency, and enable effective oversight of the sector.
Czech Republic’s (un)preparedness for STR Regulation
Currently, Czech legislation relies on provisions within the Civil Code and Trade Licensing Act. A landmark ruling in 2021 classified STR activities via platforms like Airbnb as business operations. Operators must adhere to specific conditions under trade law, including limits on accommodation capacity.
In July 2024, the Czech government proposed amendments to Act No. 159/1999 Coll., which align with EU regulations while introducing additional measures such as eTurista—a national registry for accommodation providers. This platform will require all operators (including private landlords) to register their properties before advertising them online. Non-compliance could result in fines up to CZK 100,000.
The eTurista system aims to reduce administrative burdens for businesses while empowering municipalities with tools to regulate STRs effectively. It also seeks to address financial losses caused by unregistered accommodations—estimated at CZK 800 million annually in unpaid taxes and CZK 55 million in lost municipal fees.
Proposed measures do not intend to eliminate STRs but offer municipalities the flexibility to intervene where housing availability or public infrastructure is at risk due to excessive STR activity. While nationwide regulations are unlikely, certain districts in Prague may adopt stricter controls given their transformation into tourist hubs.
Lessons learned from other European cities
European cities have been addressing the challenges posed by short-term rentals (STRs) for years, implementing various regulations to mitigate their impact on housing markets and urban life. Barcelona, for instance, faced a dramatic 68% rise in rental prices over the past decade and decided not to renew licenses for over 10,000 STR units set to expire by 2028. Lisbon introduced “closed zones” in its central areas in 2019 to limit new STR registrations, with exceptions for redeveloped buildings or projects with cultural or social significance. Vienna enacted zoning restrictions through a 2023 building code amendment, limiting STRs in residential zones and requiring permits for commercial use. Meanwhile, Berlin has been regulating STRs since 2006, restricting secondary residence rentals to 90 days annually. These measures reflect diverse approaches across Europe, aimed at balancing tourism growth with the preservation of housing affordability and urban sustainability.
These examples highlight diverse approaches tailored to local needs while addressing broader concerns such as housing affordability and urban sustainability.
In conclusion, as Prague navigates its path toward regulating short-term rentals, it can draw valuable insights from other European cities that have successfully implemented measures balancing tourism growth with residents’ quality of life.
