Housing crisis: EU funds must support the construction of new affordable housing units in addition to renovations

In a debate with Commissioner Jørgensen local and regional leaders call for a European broader approach to affordable housing in order to boost public investment. 

As the European Commission prepares to unveil its European Affordable Housing Plan, members of the Committee of the Regions (CoR) called for a more robust and coordinated EU response to Europe’s escalating housing crisis in a debate with Dan Jørgensen, Commissioner for Energy and Housing, on 20 February. They called for a substantial increase in investment in social and affordable housing, stressing that funding through the Multi-Annual Financial Framework (MFF) and other EU funds is needed to address this crisis. 

Europe faces a severe housing crisis, with over 10.6% of urban residents and some 6.2% of rural residents struggling with excessive housing costs and more than 1.2 million people experiencing homelessness. Addressing this issue requires urgent action and a substantial increase in investment in social and affordable housing, estimated at €270 billion annually. 

During the debate, CoR members stressed that ensuring adequate funding through the MFF and other EU mechanisms will be essential to tackle this challenge effectively. Housing must become a strategic priority in the next MFF, with dedicated funding streams, loans and a mix of public and private investments. Members also asked the EU to propose a broad, EU-wide approach to affordable housing, based on the reform on the state-aid regulation relating to housing of 2012. This reform will, they argued, be instrumental to efforts to unleash public investments into housing. . They further highlighted the importance of enabling investments in the construction of new social and affordable housing units, in addition to energy efficiency renovations under cohesion policy and other relevant EU funding instruments.  Recalling that reprogramming existing cohesion funds before 2027 will inevitably mean transferring funds away from other regional development goals, members emphasised the importance of additional EU funding and financing streams to support expanded EU priorities on housing. 

The debate also emphasised the crucial role of local and regional authorities (LRAs) in ensuring access to affordable and sustainable housing. As LRAs are responsible for urban planning, land use, building regulations, and essential public services, they are at the forefront of addressing the housing crisis. Local leaders stressed that the involvement of local and regional authorities is essential in efforts to integrate housing projects into broader urban development strategies, including public infrastructure. CoR members reaffirmed the importance of an ‘active subsidiarity’ approach, ensuring that EU-level actions complement and support national, regional, and local efforts rather than imposing a one-size-fits-all solution. To that end, CoR members stressed that the European Affordable Housing Plan must be designed in close consultation with LRAs, ensuring that local and regional perspectives are fully integrated. 

Quotes  

Kata Tüttő (HU/PES), President of the European Committee of the Regions: “Housing is a fundamental human right, not a commodity for profit. With over 1.2 million people experiencing homelessness or relying on emergency shelters nightly across the EU, the urgency to act is undeniable. I commend Commissioner Jørgensen's pledge for a robust European Affordable Housing Plan. However, the EU cannot achieve this alone; cities and regions must be integral partners from the outset. To truly address this crisis, the EU should also broaden its definition of affordable housing and foster public investments, notably by reforming State Aid policies.” 

Dan Jørgensen, Commissioner for Energy and Housing: “Access to affordable housing is citizens’ number one priority in virtually all corners of Europe. However, the crisis manifests itself in various forms across Europe with no one-size-fits-all solutions. The Commission has started working full speed to find the best ways of supporting Member States, cities and rural areas, and add value at the European level, where needed. We are very keen to team-up with other institutions, including the CoR and EP.  I will engage with all key stakeholders as we develop the European Affordable Housing Plan over the coming year. Work is also being intensified with the European Investment Bank and others to launch a pan-European investment plan for Affordable and Sustainable Housing in the coming months to attract more private and public investment for affordable and sustainable housing.” 

Jaume Collboni Cuadrado (ES/PES), Mayor of Barcelona and CoR rapporteur on the opinion on “The role of cities and regions in the EU Affordable Housing Plan”:  “It's not about what cities and regions can do alone to solve the housing crisis; we're already leading the charge. The question is: how can the EU support us? We need more than just a toolbox and good practice exchanges. We need transformative changes to European law to increase decision-making from cities and regions, incentivize housing investments and increase EU funding to ensure public authorities can secure long-term affordable housing for all.” 

More information 

• Video and photos from the debate.
• The European Committee of the Regions is currently drawing up an own-initiative opinion to feed into the inter-institutional discussions on the shape and scope of the future EU Affordable Housing Plan, under the rapporteurship of Jaume Collboni Cuadrado (ES/PES), Mayor of Barcelona. The rapporteur’s draft opinion will be discussed with COTER members at the COTER commission meeting on 13 March and is scheduled for adoption at the CoR plenary session of 14-15 May.
• The European Commission’s Political Guidelines for the current mandate announced that, in response to the housing crisis currently affecting all Member States, the European Commission will present the first ever ‘EU Affordable Housing Plan’ in the early part of the new term of office. The future European Affordable Housing Plan is expected to comprise several key pillars, including a revision of the current state-aid framework for social housing, a significant increase of the potential to invest in housing under cohesion policy, and a pan-European housing investment platform in cooperation with the EIB.
• In the margins of the CoR plenary session on 20 February, CoR rapporteur Collboni organised an initiative “European Mayors for Housing” to urge the EU to further address the housing crisis. Amongst the participants were the mayors of Amsterdam, Athens, Bologna, Budapest, Ghent, Leipzig, Paris, Rome and Warsaw.   

Contact
Theresa Sostmann
Tel: +32 475999415
Theresa.Sostmann@cor.europa.eu