Housing Policies in the EU

Overview of the Publication

The report “Housing Policies in the EU” was prepared by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) together with the Federal Ministry for Housing, Urban Development and Building (BMWSB). Lead authors include Rolf Müller, Jonathan Franke, and a team of researchers from the Institute for Housing and the Environment (IWU) and TU Darmstadt. It presents a comprehensive analysis of housing policy, market structures, and challenges across the 28 EU member states (including the UK) based on expert surveys, statistical data, and case‑study research conducted between 2018 and 2022.

Scope and Methodology

The study combines a cross‑country expert questionnaire, EU‑SILC and Eurostat statistics, and in‑depth case studies from 20‑plus national experts. It maps governance structures, housing stock age, tenure composition, and policy instruments. Data sources include national censuses, OECD affordable‑housing databases, and BBSR internal research. The analysis classifies tenure systems into four groups ranging from diversified (high rental share) to owner‑dominated (over 85 % owner‑occupation).

Key Findings on Housing Stock

‑ Approximately 60 % of EU dwellings were built between the 1960s and 1980 s, often as prefabricated blocks, creating major retro‑fit needs for energy efficiency and barrier‑free access. ‑ Younger building periods (post‑2000) dominate in Group 3 and 4 countries, while Group 1 and 2 retain larger stocks of older housing. ‑ Energy‑efficiency upgrades and accessibility improvements are identified as the most pressing age‑related deficiencies across the Union.

Tenure Composition and Diversity

‑ Owner‑occupation remains the largest tenure, ranging from 56 % (Group 1) to 86 % (Group 4). ‑ Market‑rate rental shares vary from 25 % in diversified systems to just 4 % in strongly owner‑dominated markets. ‑ Social‑rental and cooperative rentals together account for 3 %–18 % of the housing stock, with the highest shares in Austria, Denmark, and Finland. ‑ Mortgage‑financed homeownership is highest in diversified markets (≈64 %) and lowest in owner‑dominated markets (≈12 %). ‑ Income‑related sorting is strongest in diversified systems (owner‑occupation 21 times higher among households above the 60 % median income) and weakest in owner‑dominant systems (≈11 times).

Policy Instruments in Use

Four main instrument types are documented:

1. Housing allowances – subject‑oriented subsidies used in all member states; coverage varies from 2 % to over 20 % of households (e.g., Finland, France).
2. Subsidies for homeowners/home‑buyers – credits, grants, tax concessions prevalent in 70 % of countries, especially in southern and eastern Europe.
3. Subsidised housing – object‑oriented support for construction or refurbishment, dominant in Austria, Denmark, and Finland.
4. Rent‑price regulation – employed mainly in western EU states (Germany, Sweden, Netherlands) and limited in the east. The report notes a trend toward expanding allowance schemes in Bulgaria, Greece, Ireland, and Luxembourg to address rising affordability pressures.

Drivers of Recent Policy Change

‑ Energy efficiency requirements are the most widely cited driver, influencing renovations, building codes, and financial incentives. ‑ Urbanisation and immigration shape housing demand, especially in Denmark, Germany, Ireland, Latvia, Luxembourg, Malta, and Sweden. ‑ Ageing societies and decreasing household sizes create demand for barrier‑free and smaller units, notably in Latvia, Poland, Portugal, and Spain. ‑ The 2008 financial crisis prompted tighter lending rules, affecting home‑buyer access in several countries.

Main Challenges Identified

• Owner‑occupied sector: price spikes in urban areas, credit‑access difficulties, and energy poverty affect over half of the states. Rural vacancy and declining prices are also reported.
• Rental sector: rent hikes in cities, chronic undersupply of affordable/social housing, and inadequate regulation in many eastern and southern members. Energy poverty and lack of barrier‑free units affect renters in Latvia, Portugal, and Slovenia.
• Homelessness and temporary housing: a lack of shelters for homeless persons is widespread, especially in eastern Europe; refugee accommodation shortages are serious in Croatia, Greece, and Latvia.

Implications for Sustainable Housing

The analysis underscores the EU’s need to harmonise energy‑efficiency targets with the large stock of post‑war buildings, to scale up retro‑fit financing, and to expand inclusive rental markets. Integrated policy approaches that combine supply‑side subsidies, demand‑side allowances, and rent‑control mechanisms are recommended to achieve the dual goals of affordability and climate‑neutral housing across diverse national contexts.