Social Economy in Europe: Contributing to Competitiveness and Prosperity, Local Economic and Employment Development (LEED)

Overview of the Report and Its Origin

The OECD, in partnership with the European Union, published “Social Economy in Europe: Contributing to Competitiveness and Prosperity, Local Economic and Employment Development (LEED)” in 2025. The work was coordinated by Mathias Cormann, OECD Secretary‑General, and Roxana Mînzatu, Executive Vice‑President for Social Rights and Skills, Quality Jobs and Preparedness at the European Commission. It reflects joint responsibility of the OECD Secretary‑General and the President of the European Commission and was financially supported by the EU.

Scope and Purpose of the Study

The report analyses how the social economy—co‑operatives, mutual societies, foundations and social enterprises—drives economic growth, social cohesion and community resilience across Europe. It presents evidence on the sector’s contribution to job creation (approximately 6.3 % of EU employment, about 11.5 million workers) and its role in addressing demographic change, digital transition and environmental sustainability. The document also offers policy options to strengthen institutional frameworks, business support and taxation for the sector.

Social Economy’s Impact on Housing

Social economy entities provide a significant share of affordable housing. In the Netherlands, they supply almost one‑third of the housing stock; in Austria, a quarter; and in Sweden, 24 % of homes are co‑operatively owned. Across the EU, non‑profit or limited‑profit housing associations account for roughly 32 % of the housing stock in the Netherlands, 25 % in Austria and 20 % in Denmark. Co‑operatives contribute 24 % of housing in Sweden, 16 % in Poland, 14 % in Norway and 12 % in the Czech Republic. These entities prioritize long‑term affordability, resident participation and community benefits, often reinvesting surpluses into service improvement.

Key Housing Statistics

• 4.3 million social‑economy entities operate in the EU, employing 11.5 million people.
• Housing costs have risen sharply: between 2010 and Q1 2025, EU rents increased 27.8 % and house prices 57.9 %.
• 8.2 % of EU households now spend more than 40 % of disposable income on housing, with higher burdens in cities and among low‑income groups.
• Social rental agencies (SRAs) in Belgium, France and Germany negotiate lower rents and guarantee long‑term tenancy, helping vulnerable households access affordable homes.

Sustainability and Innovation in Housing Projects

The social economy promotes environmentally sustainable building practices. Examples include:

• The Circle House project in Denmark, the world’s first social housing complex built on circular‑economy principles, aims for 90 % reusable materials and a 45 % reduction in CO₂ emissions for precast concrete.
• BauKarussell in Austria combines demolition with material recovery, reusing 786 tonnes of building components since 2017 and creating 37 000 hours of employment.
• Co‑operatives in the Netherlands, Austria and Finland use cost‑based rent models that keep rents 20‑30 % below private‑sector levels, enhancing affordability while ensuring financial viability.

Institutional Arrangements and Policy Frameworks

Eleven EU Member States have dedicated legal frameworks and institutions overseeing the social economy; seven more focus specifically on social enterprises. Clear mandates and institutional support increase sector visibility and enable co‑ordination across national, regional and municipal levels. The report highlights the need for:

• Reserved contracts and procurement clauses that favour non‑profit providers.
• Business support schemes offering patient capital, mentorship and impact‑measurement tools.
• Tax incentives such as reduced business income tax, VAT exemptions and social‑security contribution relief for entities employing disadvantaged workers.

Recommendations for Enhancing Sustainable Housing

The authors propose several actions for policymakers:

1. Strengthen legal definitions for social‑economy housing to reduce regulatory barriers.
2. Provide affordable land through public‑land leases, zoning incentives or low‑interest loans.
3. Expand revolving‑fund financing and guarantee schemes to enable long‑term investment in sustainable construction.
4. Promote public‑private partnerships that combine social‑economy innovation with municipal planning.
5. Adopt quality‑first public procurement criteria that balance price with social and environmental outcomes.

Outlook for the Social Economy in Housing

The sector is positioned to contribute to the EU’s climate goals, given its emphasis on energy‑efficient retrofits, renewable energy integration and circular construction. By 2030, social‑economy housing entities are expected to add billions of euros to the European economy, create millions of jobs and deliver a substantial share of affordable, resilient homes, particularly in urban and rural areas where market‑driven providers are less active.