Draft Report on the housing crisis in the European Union with the aim of proposing solutions for decent, sustainable and affordable housing

This draft report, published by the European Parliament and authored by Borja Giménez Larraz, addresses the pressing housing crisis in the European Union. It aims to propose solutions for decent, sustainable, and affordable housing, focusing on the urgent need for effective policy responses to a situation that has become a major concern for citizens across Europe.

The report highlights the severe impact of the housing crisis, particularly on young people and low- to middle-income households. Over the past eight years, house prices in the EU have risen by an average of 48%, while rents have increased by 18%, often consuming up to 40% of a household's monthly income. This unaffordability prevents many young individuals from leaving their parental homes, with the average age of departure now at 26.3 years.

A key factor contributing to this crisis is the limited supply of housing stock, which has resulted from decades of underinvestment and insufficient construction. In 2024, the floor area index decreased by 1.6%, and building permits fell by 14.6% for floor area and 19.6% for the number of dwellings. This downward trend underscores the urgent need for legal certainty and efficiency in housing permitting processes.

The report identifies complex urban planning procedures as a significant barrier to increasing housing supply, often taking over a decade to complete. Additionally, construction costs have surged since 2021 due to the COVID-19 pandemic and geopolitical tensions, leading to further supply chain disruptions and rising energy prices. The excessive tax burden on housing is also noted, with effective tax rates on owner-occupied housing reaching as high as 30% in some Member States.

To tackle the housing crisis, the report recommends a tailored, multi-level governance approach that respects the principle of subsidiarity. This includes empowering local authorities to better identify housing needs and design targeted measures while ensuring they have direct access to EU housing funds. Furthermore, it calls for simplifying regulatory burdens and expediting building permit processes to encourage faster construction.

The report emphasizes the necessity of mobilizing private investment to address the liquidity shortage in the housing market. It advocates for stronger mechanisms to attract private capital for affordable housing projects, highlighting the role of the European Investment Bank in facilitating these investments.

Special attention is given to vulnerable groups, including young people, families, and essential workers. Tailored housing-related policy measures should be developed to improve access to affordable housing, including incentives for first-time buyers and reduced transaction taxes for young individuals.

Improved data collection and analysis are crucial for understanding housing needs and market dynamics. The report calls for a dedicated EU digital platform for real-time housing data and emphasizes the importance of evaluating the impact of short-term rentals on housing prices and availability.

The report concludes by stressing that access to decent housing is foundational for stability and future prosperity in Europe. It urges a coordinated effort among EU institutions, Member States, and local authorities to effectively address the housing crisis and create a sustainable housing market that benefits all citizens.