The housing crisis is emerging as a major problem across Europe: between 2010 and the end of 2023, average rents in the EU rose by almost 23% and house prices by almost 48%, leading to protests in many cities.
The lack of affordable housing and the rising cost of living have recently been at the forefront of national and European election campaigns. It is no coincidence that the head of the Commission, Ursula von der Leyen, when she was seeking re-election last month, made special references in her speech to the European Parliament.
“People are struggling to find affordable homes,” the president of the EU executive told the plenary in mid-July in Strasbourg. “I want this Commission to support people where it matters most, and if it matters to Europeans, it matters to Europe.”
In her policy guidelines for the next European Commission, von der Leyen stressed the urgency of tackling the housing crisis, proposing the first European plan for affordable housing and a commissioner responsible for the specific policy area, as the Socialists had demanded as a condition to support her second term.
So far there is a significant investment gap in social and affordable housing
“The Union should offer a housing plan that not only targets the truly needy, but responds to the crisis that affects everyone, you know: students, single-parent families, young workers…” David Rinaldi, director of policy at the Foundation, told Euronews. of European Advanced Studies (FEPS).
It is recalled that von der Leyen has given member states until August 30 to nominate two candidates for the college of Commissioners for the next five-year term. Only then will he decide who will head which portfolio – and what powers they will have.
The significant investment gap for the housing crisis
However, so far there is a significant investment gap in social and affordable housing and Member States can only use public funds to target the most vulnerable groups.
“In terms of state aid, we would like to see the recognition of social and affordable housing for everyone – beyond disadvantaged groups or social groups with fewer opportunities – as a service of general economic interest”, says Christophe Rouillon, president of the PES group, at the European Committee of the Regions (CoR).
The housing problem has so far not been a priority in discussions at EU level, despite pressure.
“The EU can influence housing through financial regulation, competition law, energy efficiency, regulatory and design standards, cohesion policy, climate action, urban/rural and social policies,” added Rouillon .
Ursula’s “Marshall Plan”.
As euronews writes, to address the growing investment gap, von der Leyen’s policy plans also include a review of state aid rules to give member states more flexibility to support housing, as well as a proposal to allow Member States to double Cohesion Policy’s planned investment in affordable housing.
“We will work with the European Investment Bank on a pan-European investment platform for affordable and sustainable housing to attract more private and public investment,” says its policy programme.
More money will come from the Social Climate Fund, which will mobilize at least 86.7 billion euros between 2026 and 2032 for actions and investments to support the most vulnerable groups, the president of the Commission said.
The problem with Airbnb
Some of the Social Democrats’ key housing proposals, including binding targets to phase out homelessness by 2029 and a legislative initiative to regulate short-term rentals, were not included in the president’s policy agenda.
“For some people, Airbnb and other platforms are a source of income, but it shouldn’t somehow threaten the quality of life in a city,” Rinaldi said, as rising housing prices and rents lead some citizens to leave the urban centers.
On average in the EU, 19.6% of people’s disposable income was spent on housing in 2022 – but for those considered at risk of poverty (with disposable income below 60% of national average income), housing costs accounted for almost 38 % of their disposable income.
The FEPS policy director stressed that the bloc could provide guidelines and a framework for urban centers to build on the success of some local initiatives, such as the austerity measures introduced in Barcelona to tackle the housing crisis.
Lack of shelter
When it comes to tackling homelessness, which affects around 890,000 people across the EU, according to a 2023 report published by FEANTSA, there is still no concrete proposal for the political agenda.
The housing crisis is also an issue where it is important to share good practices, argued MEP Li Andersson (Finland/The Left), chairman of the Employment and Social Affairs Committee, in an interview with Euronews.
“There are countries, for example Finland, that have worked a lot on homelessness and have had pretty good results for a long time, so it shows that these kinds of social problems can be solved,” he said.
Rally in real estate prices and housing crisis
The European housing crisis, decades in the making, is being felt from the Netherlands to Portugal, Greece to Germany and Britain. Prices and rents have skyrocketed, availability has collapsed and housing has become a political issue.
Between 2010 and 2022, property prices across the bloc of 27 EU member states jumped by 47%, according to a 2023 Eurostat report. In some countries, they almost tripled: Estonia saw a 192% increase . Only in two Member States, Italy and Cyprus, did prices decrease.
Rents, meanwhile, rose by an average of 18% over the same period, rising in all EU member states except Greece (where they rose by 37% since 2018). Some of the biggest increases were in Lithuania, up 144%, and Ireland, up 84%.
Disposable income
In part, this has resulted in a steadily increasing proportion of households paying more than 40% of their disposable income for housing.
In Germany, where just over half the population lives in rented accommodation – one of the highest rates in the EU – the federal statistics office estimated last year that one in five households spent at least two-fifths of their net income on rent. As for Greece, it holds the sad first place in Europe, where housing costs for households exceed 40% of disposable income.
Soaring prices are exacerbating the housing crisis
In Greece, the real estate rally also continues, covering the losses of the ten-year financial crisis. Apartment prices, according to data from the Bank of Greece (BoG), further increased in the first quarter of 2024 by 10.4% year-on-year, after seven consecutive years of continuous growth, marking a cumulative increase of 66.4% from the third quarter 2017 (lower level).
The areas where last year had the biggest increases in the number of sales, in 2023 they showed a decrease, such as the Argosaronic Islands and the Cyclades. The exception is the Municipality of Athens, where the increase in sales continues with the same intensity.
The research also calculates the changes in the value of the most expensive and cheapest average houses in relation to the basic salary (830 euros) and the average salary according to the data of the annual report of ERGANI for 2023 (1,250 euros).
The areas with the most expensive median home are found to have increased in value in 2023, on average of the 20 most expensive, by 2.8 years of work for a basic wage earner and by 1.9 years for a median wage earner according to ERGANI.
Correspondingly for the cheapest areas, 8 months of work for someone working on the basic wage and 5.5 months on the average wage. 
Source OT
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