A cocktail of measures — ranging from tax incentives for those offering their homes for long-term rental, to a freeze on licenses for short-term rentals in ten oversaturated areas of Athens — is currently under discussion by the authorities as they seek solutions to the capital’s housing challenges.

Seven central neighborhoods of Athens are now under scrutiny, where monitoring data on the growth of short-term rentals and hotel/tourism-related activities shows they are either reaching or have surpassed saturation thresholds.

These areas — including Koukaki, Exarchia, Pangrati, Mets, Votanikos, Rouf, and Metaxourgeio, all around Athens’ commercial center — are under the greatest pressure from tourism, facing burdens in water and energy consumption, waste production, traffic congestion, and noise pollution.

Additional measures are being considered for these areas, including the “freezing” of new short-term rental licenses in Athens’ 1st, 2nd, and 3rd Municipal Districts, as well as a broader policy package that could relieve housing strain by supporting long-term rentals without undermining tourism.

Red-flag neighborhoods

A recent study by the Municipality of Athens on the city’s Tourism Carrying Capacity identifies significant concentrations of tourist accommodation — mainly via Airbnb and hotels — in the above areas, recording the highest density of tourist activity.

The study also highlights the gradual tourism-driven transformation of more peripheral areas with lower saturation levels, such as Dourgouti, Fokionos Negri, Kato Patissia, Agios Nikolaos, and Ampelokipi, which are now experiencing impacts on quality of life and the local economy.

In effect, this means that Athens neighborhoods are transforming into “tourist cities,” facing the risk of the “Venice effect” — where overdevelopment of tourism turns vibrant communities into “zombie” cities, devoid of permanent residents, with buildings exclusively serving Airbnb, hotels, and tourist shops.

The study, which draws on real-time data from a dedicated observatory, has identified 14 neighborhoods with high saturation levels, as well as 17 neighborhoods with moderate saturation (11.8%).

Among the oversaturated neighborhoods are Exarchia, Koukaki, Kolonaki, Monastiraki–Plaka, and Makrygianni. Areas with moderate saturation include Strefi Hill, Neapoli, Ilisia, Victoria Square, and Ampelokipi.

Of the 14 neighborhoods currently being monitored by the Municipality of Athens — which is working in collaboration with Airbnb on the matter — 3 are already under a freeze (no new short-term rental licenses are being issued), while 7 are on the brink of oversaturation.

Rising rents

In 27 neighborhoods, high levels of tourist saturation are occurring simultaneously with increasing average rental prices, confirming the pressure being placed on both residents and urban infrastructure, and bringing the concept of carrying capacity into the spotlight of public debate.

Specifically, oversaturated neighborhoods include Ioulianou–Filadelfeias, Agios Pavlos, Agios Konstantinos–Vathi Square, the Museum area, Exarchia, Psyrri–Koumoundourou, the Commercial Center, Kolonaki, Monastiraki–Plaka, Makrygianni, Veikou, Koukaki, Kallirrois, and Dourgouti I. Moderately saturated areas include Strefi Hill, Neapoli I, Kolonaki–Lycabettus, Ilisia–Park, Plastira, Lambraki Hill, Dourgouti II, Kerameikos, Kampa, Thiseio, Agios Eleftherios I, Attiki Square, Victoria Square, Pedion Areos, Kountouriotika, Ampelokipi I, and Agios Thomas.

In all these neighborhoods, the rise of tourist activity is significantly affecting the real estate market and driving rental prices up, while also placing additional strain on the city’s infrastructure.

Although Athens is not officially considered an over-touristed city, the study highlights the presence of “tourism fragility,” with intense pressure on water, energy, and waste collection systems — especially in high-traffic tourist neighborhoods like the Commercial Triangle, Monastiraki–Plaka, Psyrri–Koumoundourou, and Makrygianni.

On the other hand, research into the short-term rental market finds that such rentals contribute 5% to Greece’s GDP and support 100,000 jobs.

However, 95% of hosts are individuals, with an average monthly income slightly over €600. Nationwide, an estimated 200,000 properties are listed for short-term rental, around 175,000 of which are non-exclusive (not solely used for Airbnb).

Bypassing the ban

Despite a license freeze already in place in three areas, enforcement appears uneven, and in some neighborhoods the policy has yet to show full effect.

As Athens Mayor Haris Doukas stated at the Delphi Forum, seven additional neighborhoods are now considered to be nearing oversaturation. “We are in ongoing discussions with the Airbnb platform, which I must say is sharing data very transparently, and we’re cooperating well to identify where further action is needed.

One critical issue for me — despite existing interventions — is Plaka. Although Airbnb has been frozen there, serviced apartments continue to operate, effectively bypassing the restriction. These create hotel-like conditions without being classified as hotels.”

The new trend

Serviced (or “service”) apartments are “apartments with services.” They are not Airbnb, nor are they hotels, but they resemble both and are becoming an emerging trend across Europe.

Also known as “extended stay suites,” they are fully furnished apartments that combine the comfort of home with the amenities of a hotel. These are studio apartments with one or two rooms that can accommodate two, three, or even four people, depending on their layout.

They are fully equipped units located within dedicated apartment complexes.

These managed residences typically include utility bills, Wi-Fi, cleaning services, and access to facilities such as gyms or swimming pools.

They accommodate both short stays (a few nights) and longer-term periods (several months). Unlike traditional hotels, serviced suites offer kitchens, separate living areas, and more space.

The 2.3 million vacant apartments

For the government, as explained by the head of the Prime Minister’s Economic Office, Professor Michalis Argyrou, the core issue in the housing crisis concerns the supply of properties.

The government sees the need to increase this supply primarily through the market itself — where financing is a major factor — but also through the state, by utilizing public assets.

With the caveat that all this must be done in a fiscally responsible way, Mr. Argyrou referred to the “My Home I” program, which has already been completed, and “My Home II,” which is progressing well, while also reminding of the tax incentives introduced to bring more homes into the long-term rental market.

The next target is the reactivation of the roughly 2.3 million vacant apartments across the country. Here, beyond overcoming bureaucratic and especially ownership-related barriers in some cases, the aim is to strengthen the legal framework to reduce landlords’ hesitation to rent out their properties, as well as to provide tax and financing incentives and tools that will support new investments to renovate old homes or build new ones.

According to a study by the Eteron Institute last year, nearly one in four apartments in Greece’s major urban centers is vacant, as the number of properties withdrawn from the market in Attica alone at the onset of the crisis (in 2011 compared to 2001) increased by 77%.

Based on the latest processed data from the 2011 census by Eteron, approximately 132,000 vacant apartments were recorded within the Municipality of Athens alone, representing 31% of the total housing stock.

Similarly high rates were observed in Piraeus (28%) and in the Municipality of Thessaloniki (28.2%), highlighting the scale of the phenomenon nationwide.

Out of more than 6.5 million residential properties across Greece, at least 550,000 vacant and unused properties are located in Attica, while more than 120,000 vacant homes are in Thessaloniki, according to figures from real estate market professionals.

The vacant properties — those that do not face ownership or other legal issues preventing their use — have remained unexploited due to the decade-long crisis, which led to a sharp drop in demand for rental housing, a steep decline in rents, and a rise in unpaid rent. These conditions resulted in many properties remaining closed for years, gradually falling into disrepair and decay.

Many of these properties, which haven’t seen any real renovation in decades — with outdated windows, problematic installations, and poor energy efficiency — are now being placed on the market, often without success. Most remain uninhabited, as renovation costs are high and owners either cannot or do not wish to invest the necessary funds for repairs and maintenance.

Factors such as negative experiences with tenants failing to meet obligations, high maintenance costs during the economic crisis, and the general depreciation of property value led many owners to keep them locked up, letting them deteriorate over time.

The majority of these vacant residences are privately owned, with estimates suggesting that they account for more than 70%–80% of the total. However, a significant number of properties also belong to public entities or institutions — often through endowments — and remain unused due to time-consuming and complex procedures required for their maintenance and utilization.

“Social Consideration”

This is where the concept of “social consideration” comes in — another key part of the government’s housing strategy. The state is activating this model to make use of its untapped building stock through a mechanism that combines social policy with a boost to construction activity.

According to the program’s guidelines, a series of unused public buildings will be renovated and made available for rent to young citizens, under favorable terms and rents, through accelerated processes and incentives for contractors who take on the projects, funded by the state.

With the goal not only of increasing the supply of affordable housing but also of revitalizing the construction sector, the state will allocate public plots in strategic locations — such as Kifisia, Paiania, Marousi, Volos, Larisa, and Xanthi — through tenders to select construction companies.

The selected contractors will be responsible for building modern social housing, which will be rented to young people for at least three years at significantly reduced rents compared to the current market. At the same time, there are considerations for offering a portion of these homes based on social and economic criteria instead of through rental agreements.

The state will retain ownership of the homes, while the contractors will be allowed to exploit them until they recoup their investment costs, under the condition that they are offered at affordable rental prices.

Additionally, in return, the contractors will acquire commercial exploitation rights over part of the plots, which they can utilize by developing retail or professional spaces. Placing these properties in emerging, newly developing neighborhoods ensures high investment interest and commercial viability.