Irene TINAGLI

Housing is no longer just a local or national policy issue. Across Europe, housing costs increasingly shape people’s opportunities and influence the development of local economies. When people cannot afford to live where jobs are available, or young families struggle to find a home, the consequences extend well beyond the housing market. 

The scale of the problem is clear. Between 2010 and 2025, house prices in the EU increased by more than 60 per cent, while rents rose by almost 30 per cent. But the problem is not simply that housing has become more expensive. Across much of Europe, there is a structural shortage of affordable housing, alongside limited availability of social housing. 

The effects are visible across the economy. Workers find it harder to move to areas where their skills are needed. Young people are postponing leaving home, and families face growing difficulties staying in the communities where they have established their lives. What was once regarded mainly as a problem for low-income households increasingly affects the middle class.

Responsibility for housing policy remains primarily with national, regional and local authorities. Yet European decisions already shape the conditions in which housing is built, financed and renovated. Short-term rentals, EU investment policies, state aid rules and energy policy are all areas where the EU play an important role. A European response can help make these areas and instruments work together and support action where national or local efforts face constraints.

The European Affordable Housing Plan marks an important step. For the first time, the EU has established a dedicated framework for addressing the housing crisis. Its priorities are to increase the availability of affordable homes, mobilise investment, help areas under pressure and improve protection for those most affected. It is important to expand the stock of affordable housing, including social and public housing, in the places where needs are greatest, taking, of course, into account the developments in environmental legislation in recent years. This calls for more effective planning and permitting, greater capacity in the construction sector and sustained investment in renovation. It also requires attention to the gap between construction costs and the rents or prices that households can afford, which the market alone does not always bridge.

Financing remains a central challenge. Public resources alone cannot meet the required investment, while private capital will not necessarily flow to the places or households with the greatest needs. The plan seeks to mobilise investment through European funds and a new Pan-European Investment Platform in cooperation with the European Investment Bank (EIB). The revised state aid framework also gives member states greater scope to support affordable housing. Their effectiveness will depend on whether these measures attract additional investment and result in homes that remain affordable over time, particularly for households that cannot access housing on market terms.

The pressure is especially acute in some cities and tourist destinations, where permanent residents face growing competition for available housing. Short-term rentals and speculative investment can contribute to these pressures, although their importance varies across local markets. Since the causes differ, the response needs to reflect local conditions.

We have experienced it in Spain, and indeed Spain was the first member state to develop a comprehensive response, introducing targeted measures for stressed housing areas. So far, Catalonia has been the first to implement this approach, with encouraging initial results. Its experience has also helped inform subsequent European initiatives.

The Affordable Housing Act would give this approach a more concrete framework. It would help identify areas experiencing housing stress and clarify the conditions under which public authorities can intervene. The aim is to support targeted and proportionate measures within the framework of EU law, without prescribing a uniform housing policy for cities and regions. Decisions on the appropriate instruments would remain with the authorities responsible for addressing local needs. The crisis also has a direct bearing on poverty. Losing access to a stable home can undermine a person’s ability to maintain employment, continue their education or manage health problems. The EU Commission’s EU Anti-Poverty Strategy recognises the importance of housing exclusion in the wider fight against poverty. This connection deserves particular attention because housing insecurity can deepen existing disadvantage and make it harder to recover from it.

The next step is to turn the European framework into concrete results. This will require sustained cooperation between the EU and the authorities responsible for housing on the ground. European financing must support long-term investment in affordable and social housing, while national and local policies need to address the specific reasons why homes remain unaffordable. Progress will also depend on how housing policy interacts with energy costs and the construction sector’s capacity.

The objective is to use European instruments where they can make a practical difference, while preserving the role of national, regional and local authorities. The single market can create opportunities across Europe, but people need to be able to afford to live where those opportunities exist. Housing has become a condition for a well-functioning economy and for the social model on which European integration rests.

This is not merely a social concern. It is essential for our cities to thrive and our economies to prosper. Above all, it is about upholding the very promise on which the European Union was founded: to build a Europe that leaves no one behind, where everyone can live in dignity and has a genuine opportunity to fulfil their full potential.

Photo credits: Shutterstock/Grand Warszawski