Thomas Kattnig is rapporteur for the EESC opinion on Social housing in the EU – decent, sustainable and affordable and Vice-President, Section for Transport, Energy, Infrastructure and the Information Society. Here, he looks at Europe’s housing crisis, including how a fundamental social right is under pressure
Europe’s housing shortage worsens, revealing profound structural deficits throughout the Member States. While rents and house prices are rising inexorably, income growth is stagnating. More and more people are struggling to keep a roof above their heads, particularly affecting those already disadvantaged. The European housing crisis has long since grown beyond a purely national issue – a pan-European problem requiring decisive political action.
Housing unaffordability spirals
Between 2015 and 2023, housing costs in the European Union (EU) increased by 48.1%, while real wages increased by only 1.6%. One in ten EU citizens now spends more than 40% of their income on housing – almost 50 million people. Reasons include the financialisation of housing, privatisation and rising land prices; austerity policies in the aftermath of the 2008 financial crisis also severely curtailed public services and reduced the stock of affordable housing.
The situation is further exacerbated by gentrification, illegal rentals, short-term rentals, ‘golden visas’ and investment funds buying up property on a massive scale. In particular, cheap housing is scarce in cities, which has serious consequences for social security, economic participation, and democratic stability.
Complex responsibilities, limited resources
Housing is regulated at the national level in the EU, so housing policy approaches vary widely and are tailored to local needs and demographic developments. At the same time, the European Commission influences competition law and exemptions such as State aid rules, thus setting a regulatory framework.
A wake-up call from Brussels
The European Economic and Social Committee (EESC) cautions against ‘business as usual’ and calls for a comprehensive European strategy beyond short-term responses. Establishing an environment where both Member States and local and regional authorities can take effective corrective action is essential.
The central foundation for this is robust data: an EU-wide housing register should be set up to provide information on vacant properties, price trends and ownership status. This will improve the implementation of targeted measures, such as restrictions on short-term rentals.
But analysis is not enough. The EESC is calling for massive public investment in building social and nonprofit housing, as well as an exemption for such investment from European debt rules. What is possible for defence must also be possible for housing: it should be possible to channel public funding into affordable projects in the long term. At the same time, more private investment should be brought in through targeted incentives.
Boosting social housing construction
In addition to more investment, we also need new financing models. The European Investment Bank (EIB) should provide interest-free loans to non-profit developers, cooperatives and municipalities. Access to existing EU funding programmes also needs to be simplified.
Housing is not a luxury, but a fundamental social right. The EESC calls for this right to be enshrined in EU primary law and for models such as ‘housing first’ to be implemented across Europe. This concept starts by providing homeless people with housing – a foundation needed before social assistance can even gain traction.
A social Europe with room for everyone
Particular attention should be paid to families, young people, single parents and people with disabilities. Access to affordable housing for these groups specifically needs to be improved, for example, through better cooperation between municipalities, social institutions and civil society organisations. Only locally rooted actions supported across Europe can have a real impact.
Europe’s housing crisis: Conclusion
The European housing crisis is a litmus test for social Europe. It requires bold decisions and a people-centred policy – with sustainable financing, fair regulation and a clear commitment to the fundamental right to housing. Affordable housing is not a side issue, but a prerequisite for living in dignity and social cohesion.
Achieving this goal will require social land policy, affordable land for non-profit housing construction, climate-friendly construction and renovation investment, and ‘housing first’ programmes to support homeless people.
The EESC urges the Commission to support the Member States by providing recommendations on rent regulation, the introduction of taxes on empty property, spatial planning measures, tax incentives for renovation and the expansion of social housing. In addition, an EU-wide investment platform and adjustments to State aid rules are needed in the short term to improve access to social housing.
These measures should be embedded in a comprehensive European investment plan, including exemptions from the Stability and Growth Pact for public investment in building social housing, targeted support programmes, and an action plan to improve access to affordable housing, especially for young people. The appointment of a European Commissioner with responsibility for housing (as well as energy) is an important signal, provided that the announced action plan is swiftly backed up by actual action.