Housing hardships hit home

Rising rents and the high cost of borrowing have significantly reduced access to affordable housing across Europe, particularly affecting young people and key workers. A staggering 4 million affordable homes are currently missing in the EU, with house prices increasing by an average of 53% over the last decade. Some countries have even seen prices triple, exacerbating the housing crisis.

At a recent summit, EU leaders acknowledged the housing crisis for the first time, recognizing that while housing competences remain primarily at national and local levels, the EU can play a supportive role. Luxembourg’s Prime Minister, Luc Frieden, noted that housing concerns are widespread across EU nations, contradicting his initial belief that they were confined to his country.

The European Commission has appointed a commissioner for housing and established a special committee to develop policy recommendations for decent, sustainable, and affordable housing. The Commission is expected to present its plan for affordable housing in mid-December, aiming to use EU initiatives and funding to bolster member states' efforts in providing safe and sustainable housing.

In Greece, over 35% of household income was spent on housing costs in 2024, the highest in the EU. Despite a high homeownership rate, Greece faces a severe housing crisis due to issues like empty homes and low purchasing power. Similarly, cities like Lisbon and Barcelona have residents spending an unsustainable proportion of their income on rent, with Lisbon tenants paying more than their monthly salary to remain housed.

The rising costs of housing have created a widening wealth gap. Homeowners typically spend a smaller share of their income on housing compared to renters, perpetuating inequality. For instance, in the Netherlands, the top 10% of the population owns around 40% of housing wealth, leaving the bottom half with none.

In Lithuania, discussions are underway to create accessible rental housing rather than solely focusing on homeownership. Municipalities are encouraged to manage and provide rental housing to improve mobility and align supply with demand. Experts like Cody Hochstenbach advocate for investing in affordable rental options and reconsidering tax advantages for homeowners.

The crisis requires innovative solutions that balance social support with housing needs. Finland has successfully implemented a Housing First model, investing significantly in affordable homes to reduce homelessness. Vienna is also highlighted as a model for social housing, where a significant portion of the market is dedicated to accessible living for a broad spectrum of citizens.

The European Commission, under Ursula von der Leyen, plans to host the EU's first housing summit in 2026, signifying a commitment to keeping the housing crisis on the political agenda. As the EU continues to explore effective policies and practices, the emphasis on sustainable housing solutions is more crucial than ever to ensure all citizens have access to decent living conditions.