Lisbon overturns short-term rental rules that failed to cut housing costs

Airbnb has welcomed the news that Lisbon is overturning restrictions on short-term rentals that have failed to ease rising housing costs in the city.

Lisbon's decision to overturn its rules comes as data shows short-term rental restrictions have failed to deliver on their promise of making housing more affordable - just as similar measures have in Amsterdam, Barcelona, Edinburgh, and New York City.

The City of Lisbon began imposing restrictions on short-term rentals in 2019. Since then, the annual growth rate of house sale prices in the Lisbon Metropolitan Area has nearly doubled, and the annual increase in rental prices has accelerated from 5.7 percent to 9.2 percent¹. Meanwhile, hotel prices have skyrocketed by 30 percent increase between 2022 and 2024 alone².

Under new rules approved by City Hall, more Lisboans will be able to share their homes in more parts of the city. Restrictions to hosting in 18 districts will be eased, allowing the proportion of STR to double from 5 percent to 10 percent of the local housing supply.

Making Lisbon more affordable for everyone

The new rules will help make Lisbon more affordable for everyone. For locals, these changes will empower them to share their homes to help cover high living costs. Seven in ten Lisbon³ hosts share only one home and say that hosting is not their primary job.

And for visitors, the new rules will help diversify accommodation options and provide more affordable alternatives to hotels, which are concentrated in the city, with many more under construction. In the Santo Antonio district of Lisbon, for example, data shows⁴ there are approximately three hotel - or similar - rooms for every five local residents.

Sara Rodríguez, Head of Public Policy for Spain and Portugal, said: "Lisbon's strict short-term rental rules have failed to make housing more affordable. Instead, they made the city less affordable for everyone, limiting earning opportunities for locals and driving up accommodation prices for visitors. In cities around the world, the root cause of housing challenges is a lack of available housing - not short-term rentals. We thank Lisbon City Hall for overturning its restrictions, which will provide more opportunities for locals to share their homes and boost their incomes. We hope more cities will follow Lisbon's lead."

Failing restrictions around the world

The results of Lisbon's failed and repealed short-term rental rules mirror outcomes in other cities that have tried to address housing challenges by limiting short-term rentals:

In Edinburgh, strict restrictions that led to a 22 percent drop in short-term rentals were relaxed earlier this year after rents and hotel prices in the city hit record highs, rising twice as fast as in the rest of the country.

In Barcelona, restrictions - including a ban on new short-term rental licenses - have been in place for more than a decade. And while the number of short-term rentals in the city dropped during that period, rents and house prices soared to record highs, increasing by 70 percent⁵ and 60 percent⁶ respectively.

In 2019, Amsterdam limited short-term rentals to 30 nights per year. While the number of Airbnb listings dropped by 54 percent from 2019 to 2024, rents increased by more than a third during the same period - rising faster than in the Netherlands overall, where rents increased by 13 percent.

In New York City, the de facto ban on short-term rentals since 2023 has not increased housing availability or affordability as promised, with vacancy rates unchanged and rents continuing to rise, despite Airbnb short-term listings dropping by approximately 92 percent.⁷ Meanwhile, hotel rates are at a record high.