What's causing Europe's housing crisis?

The housing crisis in Europe has escalated in recent years, leading to significant challenges for lower-income households. This video from the Roundtable channel examines the high cost of living and surging house prices that have left many struggling to afford basic housing. The video features experts discussing the causes and implications of the housing crisis, emphasizing its impact on younger generations, who may find themselves with fewer opportunities than their parents.

The soaring costs of housing have made home ownership unattainable for many across Europe, while rental prices continue to rise steeply. This situation has resulted in many lower-income families facing financial strain, with some being forced to live in tents on the outskirts of cities like Lisbon. In Prague, the disconnect between housing prices and local salaries has left essential workers unable to afford apartments, forcing them to choose between paying rent and heating their homes.

The rise in interest rates has slowed down housing prices but has made mortgages steeper, compounding the issue for first-time buyers who already face a shortage of affordable housing options. As a result, young Europeans may remain locked out of the housing market for an extended period.

The video features several guests, including Sorcha Edwards, Secretary General of Housing Europe, who highlights that house prices have increased by 50% since 2010. She points out a significant drop in the delivery of new homes across all sectors, including social housing. This shortage directly affects young people seeking affordable living options close to educational and employment facilities.

Manjinder Kaur Atwal, Director of Housing and Property Litigation, stresses the need for a fundamental rebalancing of the housing system, advocating for the construction of new social homes to address homelessness and overcrowding. He notes that rising rents have made it increasingly difficult for young buyers to enter the property market.

Rory Hearne, an Associate Professor in Social Policy, emphasizes that the right to housing should be enshrined in law as a human right. He discusses the alarming trend of young adults remaining in their parents’ homes due to unaffordable housing options, a phenomenon he labels as the "infantilization of a generation."

In Ireland, for example, over 60% of 25 to 29-year-olds live with their parents, a significant increase from just 35% a decade ago. The expert points out that this housing crisis has severe social and economic implications, including labor shortages in essential services due to unaffordable housing.

The video also discusses the political ramifications of the housing crisis. In many European countries, including the UK and Ireland, housing has become a central issue in upcoming elections, with parties pledging to address the growing demand for affordable housing.

Both Sorcha Edwards and Manjinder Kaur Atwal note that governments have increasingly neglected investment in social housing, preferring to subsidize private rental accommodations instead. Edwards states that government spending on private rentals far exceeds that for social housing, exacerbating the challenges faced by vulnerable populations.

The experts agree that to resolve the housing crisis, a dramatic shift in policy is required. They advocate for increased government investment in social and affordable housing, as well as a reconsideration of housing as a public good rather than a market commodity. The urgency of this issue is underscored by the growing number of people living in fear of losing their homes, highlighting the need for immediate and effective policy interventions across Europe.