EU puts right-to-home plan in the pipeline, more funds from Cohesion policies and flexibility on state aid

The European Union has placed sustainable, decent, and affordable housing at the forefront of its agenda, particularly in light of the escalating housing crisis affecting the continent. Margaritis Schinas, the outgoing Vice President of the European Commission, emphasized the urgency of developing a comprehensive European plan aimed at providing affordable housing. This initiative emerges against a backdrop where housing prices in the EU have surged by an average of 52% since 2010, while rents have increased by 25%.

The dire situation is underscored by alarming statistics from organizations such as the European Federation of National Organizations Working with the Homeless (FEANTSA), which reported around 700,000 homeless individuals in the EU in 2020, marking a 70% increase from a decade prior. The OECD estimated approximately 900,000 homeless people across 21 member states. These figures indicate a growing crisis that demands immediate intervention.

In an effort to tackle these structural issues, the EU has appointed Danish Social Democrat Dan Jørgensen to oversee the newly created portfolio on Energy and Housing. This move aims to consolidate efforts focused on affordable housing, with the Socialist Group in the European Parliament advocating for significant investments to protect the lower-income brackets from soaring housing costs. Their proposal includes revisions to EU state aid rules to facilitate investment in housing, emphasizing that public authorities should manage social rental housing rather than private investment funds.

Over 10% of European households are currently spending more than 40% of their income on housing expenses, a statistic that is expected to worsen due to a dysfunctional housing market. The EU plans to utilize the European Investment Bank (EIB) to create a pan-European investment platform dedicated to affordable housing. Moreover, member states will be encouraged to double their investments under Cohesion Policies specifically for housing initiatives.

The proposed housing plan is also aligned with the EU's Green Deal, aiming to address energy poverty while ensuring that housing remains affordable. Vice President Schinas mentioned the need for a targeted housing strategy, which includes additional resources and better utilization of existing funds. This comprehensive approach is intended to address not only the immediate housing crisis but also the long-term sustainability of housing solutions across Europe.

Despite these proactive measures, some concerns remain regarding the financial implications of implementing sustainable housing policies. Critics, such as Paolo Borchia from the Lega party, questioned the financial feasibility of these ambitious plans, raising concerns about who would bear the costs associated with making housing more energy-efficient and affordable.

In summary, the EU is actively pursuing a multi-faceted strategy to tackle the housing crisis, emphasizing investment, regulatory reforms, and a commitment to sustainability. The challenges are significant, but the commitment to addressing these issues reflects a growing recognition of the urgent need for affordable housing solutions across Europe.