Resource overview
This draft report from the European Parliament, prepared for the Special Committee on the Housing Crisis in the European Union, is authored by rapporteur Borja Giménez Larraz and addresses the EU housing crisis with a focus on proposing solutions for decent, sustainable and affordable housing.
Scale of the affordability problem
The report describes a sustained deterioration in affordability: over the past eight years, average house prices in the EU increased by 48% and rents by 18%. It notes that rents can represent up to 40% of a household’s monthly income, and it cites Eurostat data showing that young people left the parental home at an average age of 26.3 in 2023, illustrating delayed household formation linked to affordability pressures.
Structural supply constraints
A central diagnosis is that the primary driver of the crisis is insufficient housing supply (private and public) following decades of underinvestment and insufficient construction. The report highlights continued weakness in construction indicators: in 2024 the floor area index declined by 1.6%, and in 2023 building permits fell by 14.6% (floor area) and 19.6% (number of dwellings), continuing a decrease since 2021. It also points to lengthy and complex urban planning procedures—often taking over a decade—as a barrier to new supply and to land transformation and management.
Cost, productivity, and labour constraints
The report links constrained supply to rising construction costs since 2021, attributing increases to the COVID-19 period and subsequent supply chain disruptions, higher energy prices, labour shortages, and rising interest rates amid geopolitical tensions. It notes that construction output in 2019 remained 8.3% below 2007 levels and argues that productivity and cost-effectiveness could be improved through digitalisation of permits and administrative procedures, robotisation, artificial intelligence, modular/offsite construction, and serial/industrial methods. It also highlights reported shortages of skilled workers and encourages investment in vocational education and training and tools to match skills across regions.
Governance and regulatory proposals
The report stresses that housing policy is primarily a Member State competence and calls for a tailored approach respecting subsidiarity, with a strong role for local and regional authorities in identifying needs and designing measures. It proposes simplifying and accelerating permitting (including considering “positive administrative silence” for permits except where environmental, heritage, or historical protection applies) and calls for a horizontal EU regulatory-burden check, including a joint audit of EU legislation that may hinder housing supply.
Funding, investment, and targeted support
On financing, the report emphasises mobilising private investment alongside public funds, referencing the European Investment Bank (EIB) Group’s Action Plan for Affordable and Sustainable Housing and noting an estimated investment gap in affordable housing of EUR 270 billion per year. It supports mechanisms to crowd in private capital, stronger public–private cooperation, and more efficient deployment of EU funds (e.g., cohesion policy instruments). It also highlights targeted measures for younger people (e.g., reduced transaction taxes, low-interest loans, and guarantees up to 100% for first-time buyers) and calls for programmes addressing low- and middle-income households and essential workers.
Evidence, data, and short-term rentals
The report calls for better, comparable evidence on housing needs and market dynamics, including a dedicated EU digital platform for real-time housing data, an annual European housing report, and impact assessment of short-term rentals on housing prices and availability following implementation of EU rules on short-term rental data collection and sharing.