Policy Voices | Addressing the housing crisis: local solutions for a European problem?

Resource context

Friends of Europe, a policy think tank and debate platform, published the Policy Voices episode “Addressing the housing crisis: local solutions for a European problem?”. The conversation is hosted by Catarina Vila Nova and features Irene Tinagli, an economist and Member of the European Parliament who chairs the Special Committee on the Housing Crisis in the EU. The episode focuses on drivers of housing unaffordability across European cities and on policy instruments being discussed at city, national and EU level.

What the housing crisis looks like across Europe

Tinagli describes a widespread affordability problem for people trying to buy or rent homes across Europe, with impacts that are “not uniform” and strongly localised. Large cities are described as the areas “worse off”, with sharp increases in both sale prices and rents, while some smaller cities facing population outflow may see prices drop. The episode emphasises that the speed and concentration of recent price growth has been notable, particularly in the years following the COVID-19 period.

Demand, supply constraints, and post-COVID cost pressures

The discussion frames the crisis in basic economic terms as demand outstripping supply, especially for lower- and middle-income groups. Tinagli notes that post-COVID cost increases—construction inputs, logistics and supply-chain issues, raw materials, and energy—pushed up housing production costs and contributed to higher prices. At the same time, demand for housing in cities remained strong; rather than a lasting “flight from cities”, demand stayed high and shifted toward larger dwellings (for example, homes with terraces), further heating markets where new supply takes years to add.

Tourism, short-term rentals, and competing uses of homes

A major theme is the growing use of residential units for non-residential purposes, particularly tourism via short-term rental platforms. Tinagli argues that cities initially underestimated impacts because short-term rentals also brought benefits, including helping smaller cities attract tourists where hotel investment was limited. Over time, however, pressure on the residential market became more visible, and multiple European cities (cited examples include Paris, Vienna, Florence, Rome, Barcelona and Amsterdam) have explored or adopted restrictions. The episode highlights the challenge of leaving cities to act alone, given political resistance and “unlevel playing competition” if neighbouring jurisdictions do not apply similar rules.

Digital nomads, fiscal incentives, and “golden visa” type policies

The episode also discusses policies aimed at attracting higher-income newcomers (such as favourable tax regimes, golden-visa style incentives, and related mobility patterns). Tinagli says it is difficult to isolate the impact of any single policy, but describes mechanisms through which higher purchasing power can push prices upward over time. Milan is given as an example where favourable fiscal treatment for people moving from abroad contributed to very high bids in the limited housing stock of the city centre.

Policy responses, trade-offs, and an early data point from Spain

Tinagli explains that governments can regulate the commercial use of housing without removing private property rights, including through taxation and rules for short-term rental activity. The European Parliament committee’s work is presented as ongoing, with city visits planned, starting with Barcelona. Catalonia is highlighted as an early case combining strict short-term rental measures with a national framework: Spain’s housing law enabled local and regional tools, and Tinagli cites recent figures showing rents falling for the first time in a long period—about 3% in the region and up to 6% in Barcelona—while noting that longer-term effects (including impacts on rental supply) require careful evaluation.

What the EU can influence and why housing is framed as welfare

Although housing is described as largely outside EU legislative competence, the episode points to EU leverage through internal market rules affecting platforms and through transparency regulation for short-term rentals to improve data collection. It also notes EU roles in state-aid rules and financing instruments that can affect social and affordable housing investment. Tinagli argues for treating housing as an essential pillar of welfare alongside healthcare and education, and for targeted supply measures—such as building new homes or renovating empty buildings—focused on people most affected by unaffordability.