Estonia sees no need to restrict short-term rental market

Estonia’s Ministry of Economic Affairs and Communications sees no need to restrict the country’s short-term rental market, ERR reports, as the European Union prepares legislation allowing local governments to impose limits where necessary.

The proposed law would not require member states to introduce restrictions. Instead, it would create a framework for assessing whether such measures are necessary and proportionate, said Kati Kikas, a tourism legal adviser at the ministry.

For example, a local government would have to establish that a housing problem is persistent and prove that short-term rentals had negatively affected housing availability or affordability for at least three years before restrictions could be introduced, Kikas said.

Estonia has not so far identified a nationwide problem that would require additional regulation of short-term rentals, she said.

A study commissioned by the ministry found that growth in the short-term rental market had slightly reduced the supply of housing and increased prices. However, its impact remained relatively weak even in areas where the market was most active. The impact in Estonia was therefore primarily regional rather than nationwide, Kikas said.

The government is still forming its position on the new initiative, she added. It considers an evidence-based approach and consultation with local governments important in determining whether they need additional powers to carry out their duties.

Any measures should interfere as little as possible with freedom of enterprise and the exercise of property rights, while avoiding unjustified administrative burdens for businesses, local governments and the state, Kikas said.