Europe must urgently tackle its housing crisis, warn EU officials

Addressing Europe’s shortage of affordable housing is crucial to tackling the continent’s cost of living crisis and establishing a viable social market economy, panellists convened by the EPP told a group conference.

Between 2010 and 2022, rents across Europe increased by 19% and house prices by 50%, according to social housing NGO Housing Europe, with European cities highlighting the lack of “decent, affordable and adequate housing” in a fall 2023 open letter.

“The existence of the housing [problem], combined with the cost of living crisis, [could] lead to paralysing economic activity [and] leave a negative imprint on the social economy,” said Marina Stefou, the secretary general for demography and housing at the Greek Ministry for Social Cohesion and Family at a panel event on Wednesday (20 February).

The lack of affordable housing comes on top of a growing social crisis across Europe. Nearly three-quarters of EU citizens think that their standard of living will decline over the next year, while more than a third have trouble paying bills some or all of the time, a recent Eurobarometer survey found.

Dennis Radtke, a German EPP MEP and Coordinator of the Employment and Social Affairs Committee in the European Parliament, said this crisis was top of mind for voters in the Netherlands during the last election cycle.

“In addition to the question of migration, the cost of living crisis was the decisive issue for the [Dutch] election,” Radtke said. “And this number, this fact, makes it essential for us as EPP to deal with these questions.”

Eurofound, the EU research agency specialising in social and labour market policy, has previously described citizens’ lack of access to affordable housing as “a matter of great concern” across the EU.

“Unaffordable housing… leads to homelessness, housing insecurity, financial strain and inadequate housing,” its report published last year noted.

“These problems affect people’s health and well-being, embody unequal living conditions and opportunities, and result in increased healthcare costs, reduced productivity and environmental damage.”

The role of the EIB

Oliver Röpke, the president of the European Economic and Social Committee, urged EU policymakers to create a “European fund for investment in affordable, decent and suitable housing” financed by the European Investment Bank (EIB).

“I think we should also make stronger use of the EIB,” Röpke said. “[This] bank [is becoming] more and more the European Climate Bank, but I think it would be a good idea if it would also become the European Affordable Housing Bank [so that] we have more investments in affordable housing.”

Röpke’s suggestion for EIB-funded housing projects is also one of the key policy proposals in the European Left party’s draft manifesto, which Euractiv reported on earlier this week.

According to Philipp Lausberg of the European Policy Centre (EPC), however, the EIB is plausibly not the appropriate vehicle to fund such projects. Lausberg cited the EIB’s lack of financial muscle as well as the fact that its primary investment focus is infrastructure and innovation.

“I think that should be a whole separate discussion on how to solve [the housing crisis], but not necessarily in the framework of the EIB,” he said.

‘A matter of collaboration’

Another funding mechanism supported was the EU’s Social Climate Fund, a multi-billion-euro initiative announced in July 2021 that aims to provide financial support to vulnerable households and businesses to implement the green transition.

Pieter Wouters, president of the Flemish Christian Labour movement, championed the Social Climate Fund to subsidise the cost of future-proof housing as climate change threatens to make regulating the temperature of domiciles more costly and creates climate refugees who flee untenable living situations.

As part of a civil society group meant to help implement the scheme – for which the funds will be mobilised by 2026 – in Belgium, Wouters urged policymakers to take action. “As we are approaching the elections in Belgium, let’s get together and make a blueprint for this fund”.

In addition to advocating for EU-level solutions, Wouters called for more initiative at the level of local governments and organisations, citing examples of nonprofits collaborating with universities to provide students with affordable housing. 

“This is a way, I think, to not only work through a national bank or a bank policy, but also look at municipalities who can make choices at their own level,” Wouters said.

Stefou seconded the need for a combination of funding tactics to solve the affordable housing crisis. “This is a matter of collaboration [between] public and private partnership as well,” she added. “And, of course, a combination of financing — European and national.”

[Edited by Anna Brunetti/Nathalie Weatherald]

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