Housing in the EU: The EU as a commodifying force

The working paper titled "Housing in the EU: The EU as a Commodifying Force" is authored by Jonathan Sidenros and published in collaboration with the Berlin Institute for International Political Economy and the Berlin School of Economics and Law. It explores the European Union's significant yet often overlooked role in the ongoing housing crisis across its member states, particularly in the context of financialization and commodification of housing.

The paper highlights a pressing housing crisis in the EU, reporting an average rent increase of 19% and a staggering 47% rise in house prices from 2010 to 2022, both of which have outpaced wage growth. The European Parliament notes a 70% surge in homelessness over the past decade, with estimates suggesting at least 895,000 homeless individuals across the EU. The report also points to a troubling trend of rising gentrification, segregation, and suburbanization in major urban centers.

In response to this crisis, the EU launched the Urban Agenda in 2017, reaffirming its commitment to combat housing exclusion. Despite recognizing housing as a universal right in various treaties and declarations, the EU paradoxically lacks direct legislative power over housing matters. The paper argues that while the EU has no legal competence in housing, it effectively influences housing policies through its regulations on mortgage markets, state aid, and fiscal policies.

Sidenros employs Aalbers’ theory of housing financialization to analyze four modes: mortgage debt, mortgage securitization, financialization of rental housing, and financialization of social housing companies. The findings suggest that EU policies have led to increased commodification of housing, driven by market liberalization and fiscal regulations that prioritize economic growth over social housing commitments.

The paper delineates a hierarchical struggle between the EU’s single market objectives and local housing administration, where EU laws often dominate. This negative integration favors market forces, exacerbating the commodification of housing and contradicting the EU’s stated objectives of social inclusion and housing as a human right. The paper emphasizes that housing serves as a primary surplus absorber of capitalism, reinforcing the need for sustainable housing solutions.

The research outlines a shift towards targeted housing regimes across Europe, increasingly prioritizing market-oriented approaches at the expense of universal housing access. It discusses the decline of social housing through privatization and the introduction of competition laws that challenge government support for social housing initiatives.

Sidenros proposes that while the EU’s current policies contribute to commodification, there exists potential for positive integration that could foster social housing commitments. The paper calls for a critical review of EU housing policies to address the urgent need for decommodification and sustainable housing solutions, emphasizing the importance of aligning economic policies with social needs.

For additional details, the full paper can be accessed through the provided PDF link. This document serves as a vital resource for those interested in understanding the complexities of housing policy within the EU and its impact on sustainable housing practices.