Housing Crisis in Europe. What can the EU do to solve it?

The article "Housing Crisis in Europe. What can the EU do to solve it?" is published by the Austrian Federal Chamber of Labour and uploaded to their database on February 12, 2025. It addresses the pressing issue of the housing crisis that has emerged as a significant topic on the EU policy agenda. With the appointment of EU Commissioner Dan Jørgensen, the EU aims to tackle the housing problem at the highest political level, reflecting the urgency of the situation.

The housing crisis in Europe has intensified, primarily due to recent inflation trends. Rents and property prices have surged, while wages have failed to keep pace, forcing many citizens to allocate a larger portion of their income to housing costs. The Eurobarometer survey indicates that rising living costs significantly influenced voting behavior in the 2024 European elections. In response, Ursula von der Leyen has classified housing as a distinct policy area, signaling its importance within the EU's agenda.

The EU Commission has introduced the first European plan for affordable housing, focusing on investments in affordable and sustainable housing. A key component of this plan is the establishment of a pan-European investment platform aimed at attracting both private and public investments. This initiative includes doubling cohesion funding for affordable housing and relaxing state aid regulations to enhance public investment. However, challenges remain regarding how member states can secure necessary co-financing given existing restrictive EU fiscal rules.

A significant hurdle for the EU’s housing plans is the labor shortage in the construction industry. Revitalizing this sector requires the creation of high-quality, attractive jobs, which contrasts with the current model that relies on cheap, precarious labor. The article emphasizes the need for collective bargaining and stronger social security systems, as well as the introduction of social and environmental criteria in public procurement to ensure transparency and fair competition.

The European Trade Union Confederation (ETUC) has addressed the housing crisis by adopting a comprehensive resolution that highlights the need for adequate, decent, and affordable housing. The ETUC attributes the crisis not merely to supply-demand imbalances but also to the financialization of the housing market, advocating for increased state intervention and investment to combat homelessness and improve housing quality.

Homelessness remains a critical issue, affecting over one million people in Europe, including approximately 400,000 children. The article stresses the importance of a holistic approach to combat homelessness, advocating for the "Housing First" strategy, which prioritizes stable housing as a prerequisite for addressing other social issues. The EU is increasingly recognizing the importance of this approach and promoting the sharing of best practices among member states.

To effectively address the housing crisis, a revival of public or social housing is deemed necessary. The European Economic and Social Committee (EESC) has recommended supporting national initiatives and sharing successful models, such as Austria's non-profit housing system. The need for regulations that prevent speculation in the housing market and mobilize existing vacant housing is emphasized, alongside the establishment of a Special Committee on Housing within the European Parliament to evaluate member states’ housing policies.

This summary highlights the complexities of the housing crisis in Europe and the ongoing efforts by the EU to develop sustainable solutions that ensure affordable housing for all citizens.