Overview of the Article
The piece “Home sweet hurdle” is authored by Gerald Koessl and published in the IPS Journal, a platform that analyses economic and ecological issues across Europe. It examines the escalating housing‑affordability crisis, its economic roots, and the resulting social and political consequences throughout the continent.
Rising Housing Costs vs. Income
Between 2005 and 2023, disposable incomes of Europeans grew by only 17 %, while rents rose by 34 % and house prices surged 76 %. The average share of housing costs in disposable income sits at 20 %, but climbs to 38 % for low‑income households (those earning below 60 % of the national median). This widening gap underpins increasing inequality and fuels political tension.
Financialisation and Speculative Investment
Housing has increasingly been treated as an asset. Low interest‑rate environments encouraged speculative investment, offering high yields on property. Consequently, wealth gains from house‑price inflation have outpaced wage growth, especially for owners, while renters face dwindling access to affordable homes.
Shortage of Affordable Stock
A decline in public and non‑profit housing construction, together with privatisation of existing stock, has reduced the supply of affordable dwellings. This shortage amplifies the price‑rent gap and limits options for lower‑income families, reinforcing socio‑economic segregation in many European cities.
Economic Burden on Public Finances
Higher housing costs have driven a rise in housing‑allowance spending by governments, indicating that taxpayers subsidise expensive private rents without improving overall affordability. Studies from Austria show that improved affordability can lower public expenditure on housing benefits and dampen market prices.
Social Consequences of the Crisis
The unequal housing landscape contributes to social exclusion, loneliness, and resentment. Children in low‑income households often lack access to quality amenities, education, and green spaces, deepening long‑term disparities. The perceived economic insecurity also correlates with increased support for far‑right parties in several countries.
Political Dynamics and Policy Gaps
Short‑term political cycles clash with the long‑term nature of housing policy, leading many governments to adopt temporary fixes rather than evidence‑based solutions. This mismatch hampers effective action and provides fertile ground for far‑right movements to exploit housing‑related anxieties.
Paths Toward Sustainable Solutions
The article stresses the need for structural reforms: boosting investment in affordable and social housing, curbing speculative practices, and aligning housing policy with broader sustainability goals. Evidence‑based approaches that improve affordability can strengthen social cohesion and mitigate the political risks associated with the crisis.