The European Commission is preparing a new legislative framework to help large European cities cope with a shortage of affordable homes and steadily rising rents. Measures under discussion include limits on short-term lets through platforms such as Airbnb and Booking, faster building procedures and incentives for investment in housing. Ivan Velkov, chairman of FIABCI Bulgaria and of the Bulgarian Facility Management Association, told the programme ImoTiTe, hosted by Hristo Nikolov, that Bulgaria is still far from the housing crisis affecting a number of Western European countries.
Velkov said Europe’s main problem is less an inability to buy a home than increasingly difficult access to rental property. He described the pressure as especially serious in major tourist centres in Spain, Italy and other developed European states, where strong tourist flows, migration and population concentration weigh on the housing market. A Eurobarometer survey found that more than half of residents of European cities regard housing as an immediate and urgent problem.
One of the most debated options is further restriction of short-term rentals. The growth of platforms such as Airbnb and Booking has turned a significant number of homes into tourist accommodation and, in some European cities, reduced the supply of housing for permanent residents. Similar limits already exist in Barcelona, Madrid, Paris, Venice, Lisbon, Amsterdam, Berlin, Vienna and Athens.
The Commission’s proposal does not provide for an EU-wide ban on short-term rentals. Brussels instead wants clear rules under which national and local authorities can act in areas where the housing shortage is particularly severe. Velkov was sceptical that such recommendations can by themselves produce substantial change. He said European institutions issue sensible, logical guidelines, rules and recommendations for an optimistic scenario in which everyone follows the rules, but added that recommended measures rarely solve accumulated structural problems.
According to the FIABCI Bulgaria chairman, the country has not reached levels of tourist pressure and housing shortage that would require drastic limits on short-term letting. He said that, for better or worse, Bulgaria is not in the same category on housing and price accessibility. In recent months there has been movement in the country linked to the European regulation on short-term rentals, but Bulgaria is very far from saturation that would justify harsh measures. Homes let short-term number only a few thousand and are an insignificant share of the overall housing stock.
He stressed that the more important issue for Bulgaria is compliance with existing rules, registration of properties and declaration of rental income. In his view the state should use tax-control mechanisms and penalties against violators rather than pursue bans that would be hard to enforce.
Velkov said housing affordability has much deeper economic causes. In recent years the value of property, goods and services has risen much faster than household incomes. Geopolitical instability, disrupted supply chains and higher energy prices have further increased the cost of living. He said Europe is overwhelmed by regulations and legal texts that appear to create more rules and order while raising the cost of meeting them, and that this cost has now reached housing.
He also pointed to a sharp difference in attitudes to ownership. In Bulgaria, owning a home is traditionally seen as a central life goal and a form of financial security, while long-term renting is much more common in many European countries. He said the drive for everyone to own two or three homes, as in Bulgaria and the region, is not a mass phenomenon elsewhere, and that home ownership has always meant commitment, responsibility and obligation.
While a number of Western European metropolises face housing shortages, Velkov said Bulgaria’s opposite problem is depopulation of small settlements and concentration of people in a few large cities. The country has many relatively affordable homes outside the big urban centres, but the lack of an effective regional policy limits their use. He said depopulation of small places and the gathering of more people in a few large cities is Bulgaria’s problem, yet compared with other European cities the country is very far from a critical point.
He argued that Bulgaria should focus on infrastructure, transport, urban planning and living conditions outside the largest economic centres. He recalled that for two decades property-sector representatives have urged the state and municipalities to work with private investors on affordable housing. He said public authorities in Bulgaria have been told for 20 years that they can commission the private sector to build properties at accessible prices as part of a broader strategy that could sharply improve conditions across the housing market.