Affordable Sustainable Housing in the EU

This publication, Affordable Sustainable Housing in the EU (Final Report), was commissioned by the European Economic and Social Committee (EESC) and produced by the Center for Social and Economic Research (CASE). The authors are Agnieszka Kulesa, Agnieszka Maj, Aleksandra Owczarek, Anna Wiktorow-Bojska, and Karolina Zubel. The report examines policy solutions for affordable and sustainable housing across the EU, with a specific focus on (1) digitalisation in the housing and construction sector and (2) housing provision models involving social economy entities.

The study frames housing as a social need and social right, while documenting worsening affordability across Europe. It cites Eurostat that, in 2023, more than 10% of households in cities and 7% of households in rural areas spent over 40% of their disposable income on housing. It also notes that between 2010 and 2022, house prices increased by 47% and rents by 18% in the EU, and that the median age at which at least half of EU citizens leave their parental home rose from 26 (2007) to 28 (2019). The report links affordability pressures with recent crises (COVID-19 and the energy price shock following Russia’s war on Ukraine) and highlights the need for energy-efficiency upgrades to reduce energy poverty, particularly for groups living in poorly insulated dwellings.

The report stresses that affordability and sustainability are multidimensional and need to be addressed together across the full building lifecycle (design, construction, operation, renovation/repurposing, and end-of-life). It groups guiding principles into five themes: habitability and comfort; community and connectivity; economic accessibility (including purchase/rent and operating costs, and utilities); resource efficiency and circularity (including whole-life carbon reduction); and resilience and adaptation to climate change. It also situates housing in the climate context, noting that buildings and construction account for almost 40% of greenhouse gas emissions and that residential construction alone accounts for 17%, while construction can account for up to 50% of extracted materials.

While housing policy remains primarily a national competence, the report describes how EU initiatives influence housing conditions through frameworks and funding. Examples discussed include the European Pillar of Social Rights, cohesion policy priorities (innovation/digitalisation, green transition, and social inclusion), the European Green Deal and Renovation Wave (with a target of 35 million buildings renovated by 2030), the Fit for 55 package and the Social Climate Fund, the revised Energy Performance of Buildings Directive (in force from May 2024), and the New European Bauhaus linking sustainability, inclusion, and design. The report also maps differences across Member States’ housing governance structures and notes an overall trend since 2009 toward reduced public expenditure on supply-side measures and increased spending on demand-side support such as housing allowances.

Digitalisation is presented as a lever to improve planning, construction, and building management, but adoption is uneven. The report notes that 18 of 27 Member States have policies covering or targeting construction digitalisation, while nine do not have dedicated strategies for digital building permits. It describes three stages of building-permit digitalisation (paper-based, partially digital, fully digital with machine-readable data compatible with BIM) and finds that many systems remain PDF- and paper-centric. BIM adoption is described as “moderate” and concentrated among larger firms. AI use in construction is characterised as early-stage and often limited to pilots; the report cites Eurostat figures showing higher shares of construction firms using at least one AI technology in Luxembourg (11.3%), Portugal (10%), Finland (9.4%), Denmark (8.9%), Belgium (8.3%), Germany (8.3%), and the Netherlands (7.4%). It also cautions that cost savings from digitalisation can accrue to investor margins rather than directly translating into affordability for end-users.

The report highlights increasing decentralisation of housing policy implementation and greater involvement of non-profit, cooperative, and other social economy actors alongside public and private sectors. Case studies referenced include limited-profit housing associations in Austria, a Social Rental Agency model in Poland, and cooperative housing in Spain (Catalonia). The study emphasises that these models can support affordability, long-term stability, and community cohesion, and it argues for broader approaches that serve households beyond the most vulnerable.

Among its headline recommendations, the study calls for a comprehensive “New European Deal for Affordable Sustainable Social Housing,” stronger multi-level coordination with local and regional authorities, interoperable digital platforms for building permits, and long-term frameworks including an EU Housing Directive to support coherent approaches to affordability, sustainability, and financing across Member States.