Addressing the Housing Crisis - The contribution of National Promotional Banks and Institutions in Europe

The publication titled "Addressing the Housing Crisis - The contribution of National Promotional Banks and Institutions in Europe" is produced by the European Association of Long-Term Investors (ELTI) and the European Association of Public Banks (EAPB). It highlights the vital role of National Promotional Banks and Institutions (NPBIs) in mobilizing capital for sustainable housing solutions across Europe. These institutions leverage public funds to stimulate long-term investments in areas often neglected by traditional financing, such as social and environmental challenges.

The report identifies several socio-economic challenges exacerbating the housing crisis in Europe. Rising property prices, particularly in urban areas, have created significant hurdles for young families and individuals seeking affordable housing. Additionally, an aging population increases demand for accessible housing solutions. The report also notes that soaring energy costs and outdated housing stock require substantial renovations to enhance energy efficiency, necessitating long-term financing.

National Promotional Banks have been instrumental in bridging the financing gap for housing projects. In 2023 alone, these banks promoted over 380,000 dwellings, committing nearly €50 billion in financing. They offer specialized advice on social and affordable housing and are well-positioned due to their local market expertise and connections with public authorities and private investors. This enables them to maximize the impact of public resources effectively.

Various countries have adopted tailored measures to address housing challenges. For instance, Bulgaria’s Development Bank (BDB) focuses on improving housing quality and accessibility through financial support for energy-efficient projects. The bank collaborates with EU initiatives to enhance housing conditions, particularly for vulnerable populations.

In Czechia, the National Development Bank (NRB) has launched a program to stimulate affordable housing construction, targeting young families and professionals. This initiative seeks to ensure that housing remains accessible to those with limited market options.

Finland has established a robust model for affordable social housing, primarily through municipality-owned companies and non-profit organizations. The Finnish government aims to eradicate homelessness and increase the share of affordable housing in new constructions.

The publication also highlights innovative projects in various countries. In France, the Caisse des Dépôts et Consignations (CDC) plays a significant role in financing social and affordable housing, contributing to the addition of 115,000 new dwellings in 2024. The CDC integrates European resources with national funding to support diverse housing needs.

In Italy, the CDP Group has been pivotal in developing social housing infrastructure, fostering sustainability and urban regeneration. Their investment strategy includes not just social housing but also student and senior housing solutions, addressing a wide range of demographic needs.

The report concludes that it is imperative to preserve successful financing approaches while increasing financial capacity across Europe. By working collaboratively, European countries can enhance their impact and ensure that every citizen has access to safe, sustainable, and affordable housing. This cooperative effort aims to create resilient communities that can withstand social, economic, and geographic challenges.