Short-Term Rental Regulations Tighten Globally

Croatia considers limits on short-term rentals

Governments in Europe and the United States are increasingly tightening regulations on short-term rental markets as housing affordability becomes a growing concern.

Croatia is among the latest countries considering restrictions on short-term rentals in major tourist destinations such as Dubrovnik, Split and Zadar.

The proposed measures include potential caps on the number of days properties can be rented to tourists and incentives encouraging property owners to return housing units to the long-term rental market.

Tourism plays a major role in Croatia’s economy, accounting for roughly 20% of GDP. In 2025 the country welcomed approximately 21.8 million visitors, significantly increasing demand for tourist accommodation.

However, the rapid growth of short-term rentals in popular destinations has pushed housing prices higher and reduced the availability of long-term housing, particularly affecting essential workers such as teachers and healthcare staff.

Tourism pressure increases housing concerns

Authorities are exploring various regulatory tools to balance tourism growth with housing affordability.

In addition to rental-day caps, policymakers are discussing financial incentives that would encourage property owners to shift units back into the long-term housing market.

Economic factors are also contributing to housing pressures. Croatia’s inflation rate reached about 4.3% in late 2025, adding further strain to housing affordability.

Experts note that countries with a high dependence on tourism often face difficult policy trade-offs between supporting tourism revenue and maintaining accessible housing for local residents.

Maui moves forward with major rental phase-out

In the United States, short-term rental regulation is also intensifying. On the island of Maui in Hawaii, the local planning commission rejected proposals that would have allowed thousands of vacation rentals to continue operating.

The proposed zoning categories, known as H-3 and H-4, would have allowed nearly 7,000 apartment-zoned vacation rentals to remain active despite the adoption of Bill 9.

Bill 9 mandates a gradual phase-out of approximately 7,000 apartment-zoned transient vacation rentals, including properties on the Minatoya List.

Under the law, these properties must stop operating as short-term rentals by January 1, 2029 in West Maui and by January 1, 2031 in other parts of the island.

Evanston introduces discretionary oversight model

Regulatory changes are also unfolding at the city level across the United States.

In Evanston, Illinois, the city council approved an updated ordinance governing vacation rentals ahead of the expiration of a licensing moratorium.

The ordinance formally defines short-term rentals as properties rented for fewer than 30 days and increases penalties for violations. Property managers must now be located within three miles of the rental property.

The city maintains a fixed cap of 144 short-term rental units, reflecting a ratio of approximately one short-term rental for every 100 long-term housing units.

A notable change removed the previously proposed 600-foot distance rule between single-family rentals. Instead, city authorities will assess whether new rentals create a “negative cumulative effect” on neighborhoods, introducing a more flexible oversight approach.

Global trend toward tighter Airbnb regulation

The developments in Croatia, Maui and Evanston illustrate a broader global trend toward tighter regulation of the short-term rental industry.

Cities and tourist destinations across Europe and North America have introduced new rules in recent years to address housing shortages and rising rents linked to tourism.

Rather than banning short-term rentals outright, many governments are adopting caps, licensing requirements and zoning restrictions to better control the expansion of the sector.

Emerging tourism markets continue to grow

While mature tourism markets tighten regulations, emerging destinations are experiencing rapid growth.

Georgia has become one of the fastest-growing tourism markets in recent years, supported by expanding hotel infrastructure, increasing international flights and rising global interest in destinations such as Tbilisi and Batumi.

Competitive travel costs, a liberal visa regime and a growing hospitality sector have helped position the country as an attractive destination for both tourists and investors.

As experts at International Investment note, stricter short-term rental regulations in established tourism markets may redirect global investment flows. While traditional destinations introduce tighter rules, emerging tourism hubs such as Georgia are gaining new opportunities for tourism development and hospitality investment.