RICS Position on the Future of Affordable Housing in Europe

The resource titled "RICS Position on the Future of Affordable Housing in Europe" is published by the Royal Institution of Chartered Surveyors (RICS), a leading global organization for professionals in property, land, construction, and sustainability issues. The position paper outlines recommendations for delivering affordable and sustainable homes across Europe, acknowledging the complex challenges that the housing sector faces.

Housing is essential not just as an asset class but also as a vital component of economies and societies. The paper highlights that many regions are grappling with a housing supply that fails to meet growing demand, leading to inefficiencies and inadequate living conditions for many individuals. In 2023, 69% of the EU population owned their homes, while 31% lived in rented housing. However, significant disparities exist, particularly in Germany, where 52% of the population rents.

Several factors contribute to the current housing crisis, including high construction and land costs, cyclical lending markets, and a lack of diverse housing types. In 2023, 8.8% of the EU population spent over 40% of their disposable income on housing, with Greece facing the highest rates at 28.5%. The paper emphasizes the need for a unified approach that integrates social and climate objectives to avoid further exacerbating inequalities.

The paper calls for the establishment of consistent definitions for terms like "affordable housing" and "housing need" to improve data comparability across countries. It proposes the creation of a European housing data observatory to gather relevant information and recommends the adoption of the International Cost Management Standard (ICMS) and Whole Life Carbon Assessment (WLCA) frameworks to enhance transparency in construction costs and sustainability.

Financing is identified as a major barrier to delivering affordable housing. Developers often struggle with limited access to capital, and public authorities face fiscal pressures. The paper recommends establishing a stable subsidy scheme and expanding green financing instruments to align social and environmental goals. Additionally, it emphasizes the importance of legal obligations for developers to allocate a portion of units as affordable housing.

The paper emphasizes the need for sustainable housing solutions, advocating for the retrofitting and repurposing of existing buildings as a means to address affordability and climate goals. While challenges exist in converting office spaces to residential units, the potential for innovative housing typologies, such as micro-living and modular construction, is highlighted as a way to meet both affordability and sustainability objectives.

Inefficient planning and permitting processes are significant obstacles to affordable housing delivery. The paper recommends streamlining these processes while maintaining environmental safeguards. Additionally, it highlights the critical challenge of labor shortages in the construction sector and advocates for EU-level retraining programs to address this issue.

Market distortions, such as speculative buying and short-term rentals, contribute to reduced affordability. The paper proposes targeted mortgage schemes and regulations for short-term rental platforms to protect long-term rental supply, while also advocating for policies that address specific market distortions.

The RICS position paper concludes that affordable housing in Europe faces interrelated challenges that require a comprehensive and coordinated approach. It emphasizes the importance of balancing short-term affordability with long-term sustainability and highlights the commitment of RICS professionals to support this initiative through expertise in economic assessments and sustainable housing practices.