Resource overview
This is a policy briefing from the European Parliamentary Research Service (EPRS), written by Marketa Pape, on “A coordinated EU approach to housing”. It is designed as background for Members of the European Parliament and focuses on the EU-wide housing affordability crisis, alongside the links to decarbonisation and energy poverty.
Scale and drivers of the housing crisis
The briefing describes a long-running deterioration in affordability across many Member States, intensified by recent cost-of-living pressures. It highlights rising construction costs, higher mortgage rates and a slowdown in housing construction as major constraints on supply. In parallel, housing increasingly being treated as an investment asset is presented as a factor pushing prices faster than incomes, widening the gap between market costs and households’ ability to pay. The document notes growing difficulties not only for low-income groups, but also for middle-income households and key workers.
Key affordability indicators
The paper provides EU-level figures to illustrate the scale of the problem: between 2010 and 2023, average house prices rose by 48% across the EU, while rents increased by 22%. It also reports an estimated 70% increase in homelessness over the past decade in Europe. Another indicator referenced is the housing cost overburden rate, where households spend more than 40% of their disposable income on housing, signalling heightened vulnerability and reduced financial resilience.
Buildings, climate targets and energy poverty
Environmental performance is presented as inseparable from affordability. The briefing states that buildings account for 40% of the EU’s energy consumption and 36% of CO2 emissions, making the housing stock central to climate objectives. Renovation and decarbonisation are framed as necessary both to meet EU climate goals and to reduce energy poverty, especially where inefficient buildings drive high energy bills. This creates a dual challenge: improving performance while keeping housing accessible and costs manageable for residents.
EU competence, legislation and market regulation
While housing policy remains primarily a Member State competence, the briefing outlines several EU levers that shape housing outcomes. It highlights the revised Energy Performance of Buildings Directive (EPBD), including the requirement that all new buildings be zero-emission by 2030, and targets for Member States to reduce average energy use in residential buildings by 16% by 2030 and by 20–22% by 2035, with attention to renovating the worst-performing stock. It also discusses how EU competition (state-aid) rules affect social housing subsidies, with stakeholder concerns that the current definition of eligible target groups can be too narrow. The document notes EU public procurement rules promoting the “most economically advantageous tender” approach, though lowest-price criteria remain common. It also mentions new short-term rental rules applying from May 2026 to improve transparency and data for local policy.
Funding tools and emerging EU-level initiatives
The briefing maps key EU financing instruments relevant to affordable and sustainable housing, including the Recovery and Resilience Facility (RRF), European Regional Development Fund (ERDF) and InvestEU, and it cites an estimated €100 billion available for energy-efficiency renovations up to 2030. It notes that the Social Climate Fund is expected to start in 2026 and that the European Investment Bank (EIB) is a major financier, preparing a new action plan and a one-stop-shop portal to support investment. On governance and agenda-setting, it references the European Parliament’s Special Committee on the Housing Crisis (HOUS) established in December 2024, and the European Commission’s preparation of a “European affordable housing plan”, including a call for evidence and proposals to increase flexibility in cohesion funds for affordable housing projects.