Government to Ban Windowless Basements, Freeze Central Athens Licenses in Overhaul of Short-Term Rentals

The Greek government is proposing sweeping changes to the regulation of short-term rentals, including a ban on using converted storage spaces and windowless basements, as well as a one-year freeze on new rental licenses in popular central Athens neighborhoods.

Lawmakers began debating the proposed legislation on Friday, aimed at tightening the rules for this rapidly expanding tourism sector, which has put pressure on housing affordability and transformed many neighborhoods.

"Basements will no longer be allowed for use: Rental spaces must serve as primary residential use areas, with natural light, ventilation and air conditioning," Tourism Minister Olga Kefalogianni told state broadcaster ERT.

The draft bill will also prohibit the use of renovated warehouses, underground spaces, and former industrial properties for short-term rentals, even if they have already been converted for hospitality use.

Alongside the ban on windowless basements, the government is introducing a one-year freeze on new short-term rental registrations in popular central Athens districts like Kolonaki, Koukaki, and Exarchia, with violations punishable by a €20,000 fine.

The surge in vacation rentals has been a double-edged sword for Greece's vital tourism industry, which now directly accounts for 13% of the country's GDP. While the rentals have helped expand the tourism sector, they have also contributed to higher rents and decreased housing accessibility during the broader cost of living crisis.

The proposed legislation aims to balance the benefits of tourism with the need for housing affordability and livable communities. It also introduces more detailed safety and operational standards for vacation rentals.

Some opposition lawmakers have accused the government of prioritizing profit over the social and environmental costs of the tourism boom, calling for more comprehensive rental restrictions. The draft bill is expected to be voted on later this month.