Bundesrat files subsidiarity objection to EU Affordable Housing Act

The Bundesrat, the chamber through which Germany's 16 state governments take part in federal and EU affairs, has formally objected to the European Commission's proposed Affordable Housing Act. On 16 October 2026 it sent the Commission a subsidiarity complaint (Subsidiaritätsrüge), arguing that the EU has no competence for the planned rules and that the proposal is not compatible with the principles of subsidiarity and proportionality.

What Brussels has proposed

The Commission presented the proposal on 9 September 2026, together with a recommendation on housing affordability and supply. It calls the Act the first common European framework for assessing housing-related measures that affect the EU's single market. Using a common method, authorities would map ‘areas under housing stress’. If they want to restrict how homes are used – for short-term rentals or vacant dwellings, for example – they would have to show that such use adds to local housing pressure, and that their measures are targeted, necessary and proportionate.

Before restricting short-term rentals, authorities would have to prove that such letting has significantly harmed the affordability or availability of housing for at least three years, and that a less restrictive step would not work as well. They would also have to apply and enforce the EU's rules on short-term rentals, which have applied since May 2026.

Lack of affordable housing is a matter of concern for so many of our European citizens.

The Commission says it remains up to the competent authorities whether to act and what to do, and that housing policy stays a national, regional and local matter. Some member states that had already acted faced legal challenges over whether their measures were compatible with EU law, it says, and the Act is meant to give authorities legal certainty.

Why the states object

The Bundesrat sees it differently. In its view, the regulation would intervene far-reachingly in the housing market and considerably narrow member states' room for manoeuvre in housing policy, which it says is their responsibility. A uniform European framework is unnecessary, it argues, because Germany already has proven systems – such as the states' laws against the misuse of residential property (Zweckentfremdungsgesetze), under which housing shortages can be established on a legally sound basis – and national rules reflect housing markets that differ considerably at national, regional and local level.

The states also say the proposal would add bureaucracy without discernible added value. That could place a heavy burden on smaller municipalities in particular and might lead them to give up measures to protect housing altogether.

Alongside the complaint addressed directly to the Commission, the Bundesrat adopted an opinion with similar criticism addressed to the federal government, which has to take it into account when it draws up Germany's negotiating position.

What a subsidiarity complaint can do

Subsidiarity means that the EU should act only where that is more effective than action by member states at national, regional or local level. Under the EU's subsidiarity control mechanism, national parliaments that consider a draft law breaches this principle can send the Commission a reasoned opinion within eight weeks. Each of the 27 national parliaments has two votes; where a parliament has two chambers, each has one. In Germany those are the Bundestag and the Bundesrat.

Under the orange card, a proposal is dropped if a simple majority of the European Parliament's members, or 55% of the members of the Council, find that it breaches subsidiarity. According to the Commission, the yellow card has been triggered three times – in 2012, 2013 and 2016 – and the orange card never.

What happens next

On its own, one chamber's complaint does not stop the proposal. The European Parliament and the Council now take it up under the ordinary legislative procedure; in the Council, each member state is represented at ministerial level, so Germany's position is put by the federal government. How the Council decides is set out in our explainer on qualified majority voting, and the Bundesrat's role in EU matters in our explainer on how the Bundesrat works.