Tackling the Housing Crisis in Europe - Policy Brief

Tackling the Housing Crisis in Europe is a policy brief published by the Foundation for European Progressive Studies, authored by Dimitra Siatitsa, Meriç Özgüneş, and Stefania Gyftopoulou. This document addresses the systemic and structural challenges of housing unaffordability in Europe, emphasizing that housing is a fundamental right under threat.

The brief highlights that 8.8% of EU households spend over 40% of their income on housing, while nearly 900,000 people are homeless. Between 2010 and 2025, house prices across the EU rose by an average of 57.9%, with rents increasing by 27.8%. The crisis is driven by factors such as financialization, market speculation, and weakened public powers to regulate corporate interests. This situation has resulted in the urgent need for coordinated European action to address these challenges.

For the first time, housing has been assigned to the EU Commissioner for Energy and Housing, tasked with delivering the European Plan for Affordable Housing by the end of 2025. The document states that the current housing challenges exceed the capacities of individual member states, necessitating a multi-level approach. The internationalization of housing markets has intensified issues like financialization and speculation, leading to a commodification of housing rather than viewing it as a social good.

The policy brief identifies three critical areas needing attention: the chronic lack of public and affordable housing, energy poverty in the context of the green transition, and the regulation of short-term rentals (STRs). These issues drive displacement and rent inflation, further exacerbating the housing crisis across Europe.

The brief emphasizes the need for more social and affordable housing. Public investment in housing has decreased significantly, from 0.17% of GDP in 2001 to 0.06% in 2018, even as demand for social housing continues to rise. Countries like the Netherlands and Austria adopt broad definitions of social housing, while others restrict access, leading to inconsistencies across the EU.

To address these issues, the document suggests several policy recommendations, including increasing the supply of social and affordable housing, regulating housing markets to curb speculation, and establishing a common framework for affordable housing. Specifically, it calls for socializing existing housing stock and empowering local authorities to manage housing provisions more effectively.

The brief stresses the importance of strengthening funding mechanisms and local capacities. It advocates for direct EU-local government engagement in housing finance and the establishment of significant housing funds to ensure resources reach public, cooperative, and non-profit housing providers. This approach aims to bypass complex national intermediaries and enhance the collective capacity to address the housing crisis. In summary, the policy brief offers a comprehensive overview of the pressing housing crisis in Europe, outlining the structural issues, the need for coordinated action, and actionable recommendations for sustainable solutions to ensure housing remains a fundamental right for all.