Accelerating decarbonisation of current and future affordable housing in Europe

The resource titled "Accelerating Decarbonisation of Current and Future Affordable Housing in Europe" is published by the Urban Land Institute (ULI) and authored by a team including Sara Candiracci, Sara Dethier, Gabriella Bachiller, and others. This document outlines a comprehensive program aimed at addressing the dual crises of housing affordability and the urgent need for decarbonisation in Europe.

Europe faces a significant challenge, with around 15 million people unable to afford suitable housing and approximately 1 million experiencing homelessness. Housing prices have surged by approximately 50% between 2015 and 2024, while energy-related greenhouse gas emissions from buildings account for about 36% of the EU's total emissions. More than 75% of existing buildings are considered energy-inefficient, and up to 85% of today’s homes are expected to still be in use by 2050, locking in carbon emissions without large-scale retrofitting.

The report identifies systemic barriers such as inadequate land access, vacant homes, and disjointed housing and infrastructure planning. Approximately 30 million homes in Europe are estimated to be vacant or under-occupied, further exacerbating the housing crisis. Fragmented governance and limited collaboration amongst public and private sectors hinder efforts to address these issues effectively.

Key intervention areas are proposed to overcome these barriers. These include optimising strategic land assembly, mainstreaming integrated planning, enhancing public-private collaboration, and fostering community engagement. By aligning housing, retrofit, and infrastructure planning, these interventions aim to create compact, low-carbon neighbourhoods that are also affordable.

The report emphasizes the importance of collaboration among various stakeholders, including housing providers, public authorities, and civic organizations. A shared accountability framework is suggested to ensure that both affordability and decarbonisation goals are met, promoting long-term investment in sustainable housing.

Innovative financial models are critical for funding the transition to low-carbon housing. The report highlights the necessity for blended finance solutions that combine public and private capital to support affordable housing projects. Financial mechanisms such as sustainability bonds and property-linked finance are proposed to incentivize investment in low-carbon homes.

Establishing universal definitions and metrics for housing performance is essential for effective decision-making. The report calls for consistent data on building stock and performance to facilitate accurate benchmarking and improve investment strategies.

Fostering community and resident collaboration is vital for ensuring that housing meets the needs of its occupants. Participatory design processes and ongoing resident involvement in housing management can strengthen community ties and support the successful implementation of retrofitting projects.

The C Change for Housing initiative aims to mobilise the real estate industry to tackle the intertwined challenges of affordability and decarbonisation in Europe. By addressing systemic barriers through collaborative and innovative approaches, the initiative seeks to create a sustainable and inclusive housing system.