The European Commission has initiated the process of revising state aid regulations in the housing sector to allow Member States to provide broader support beyond just social housing.
In response to the acute housing crisis in Europe, Vice-President of the Commission Teresa Ribera stressed that "too many families and young people cannot afford decent housing."
Currently, Member States can support social housing without compensation caps, meaning there is no limit on the amount they can provide to a company for services of general economic interest (SGEI) without distorting competition.
However, these rules are not suited to measures beyond social housing, hence the need for revision to encourage investment in so-called "affordable" housing.
The Commission plans to collaborate with the European Investment Bank (EIB) to establish a pan-European investment platform for affordable and sustainable housing, aiming to attract more private and public funding.
The skyline of the city of Brussels, seen from the top of the Sacre-Coeur Basilica in Koekelberg. Credit: Belga / Eric Lalmand
Between 2010 and 2023, housing prices in the EU rose by an average of 48%, and rents increased by 22%. The increase varied across Member States, with Estonia experiencing the sharpest rise at +209% for housing prices and +211% for rents.
Urban areas and tourist regions are particularly affected, with 10.6% of Europeans in cities facing excessive housing costs, defined as more than 40% of their disposable income.
The issue of housing affordability now extends beyond low-income groups, affecting a broader segment of society. Factors include rising demand in urban areas, increased housing costs, ageing property stocks, and the pressures from tourism and short-term rentals.
Commission President Ursula von der Leyen has prioritised this issue in her second term, appointing Danish Dan Jørgensen as the first housing commissioner. Jørgensen is expected to present a European plan for affordable housing early next year, with the revision of state aid rules as part of this strategy.
