Europe is grappling with a severe housing crisis. From 2010 to late 2023, EU average rents surged by about 23%, while housing prices soared by nearly 48%, sparking protests across numerous cities. The affordability of housing and escalating living expenses have become central issues in recent national and European election campaigns. Recognizing this, Ursula von der Leyen, the European Commission President, highlighted these concerns during her re-election bid, addressing the European Parliament in Strasbourg. Von der Leyen acknowledged the widespread struggle to secure affordable housing, emphasizing the Commission’s commitment to supporting Europeans on issues that deeply affect them. She stressed that matters important to European citizens are inherently important to Europe as a whole. In response to this pressing issue, Von der Leyen’s policy outline for the next Commission includes the introduction of Europe’s first affordable housing plan. She also proposed appointing a dedicated commissioner for this policy area, a move demanded by Socialist parties as a condition for backing her second term.

David Rinaldi, policy director at FEPS (Foundation for European Progressive Studies), emphasizes the need for a comprehensive EU housing plan. This plan should address not just the needs of the extremely poor, but also the broader housing crisis affecting various groups like students, single parents, and young professionals. Ursula von der Leyen has set an August 30 deadline for EU member states to nominate commissioners for the next five-year term. She will then allocate portfolios and determine their respective powers. A major challenge in addressing the housing crisis is the substantial investment gap in social and affordable housing. Currently, member states are limited to using public funds only for the most vulnerable populations. Christophe Rouillon, leading the PES group (Party of European Socialists) in the European Committee of the Regions, advocates for recognizing social and affordable housing as a service of general economic interest. This recognition would extend beyond just disadvantaged groups, potentially broadening access to housing support. Despite growing concerns, housing issues have not been at the forefront of EU-level discussions. However, Rouillon points out that the EU has various policy levers to influence housing. These include financial regulations, competition laws, energy efficiency standards, urban planning policies, and climate action initiatives, among others.

Ursula von der Leyen’s ambitious housing strategy, dubbed by some as a ‘Marshall Plan’ for housing, aims to tackle Europe’s growing housing investment gap. Her policy proposals include several key elements:

1. A revision of state aid rules: This would give EU member states more leeway in providing housing support.
2. Doubling of cohesion policy investments: Member states would be allowed to significantly increase their planned investments in affordable housing through cohesion policy funds.
3. Pan-European investment platform: In collaboration with the European Investment Bank, this platform would focus on affordable and sustainable housing, aiming to attract both private and public investments.
4. Utilization of the Social Climate Fund: This fund is set to mobilize a substantial 86.7 billion euros between 2026 and 2032. These resources will be directed towards actions and investments supporting the most vulnerable groups in society.

These measures represent a comprehensive approach to addressing the housing crisis, combining regulatory changes, increased investment, and targeted support for those most in need. By leveraging both public and private resources, Von der Leyen’s plan aims to make a significant impact on the availability of affordable housing across the European Union.

While Ursula von der Leyen’s housing policy proposals are extensive, they notably omit some key recommendations from Social Democrats. These include setting binding targets to eradicate homelessness by 2029 and introducing legislation to regulate short-term rentals. David Rinaldi highlights the complex role of platforms like Airbnb in the housing crisis. While these platforms provide income for some, they can also negatively impact urban life quality. This issue is particularly pressing as rising housing costs force many residents out of city centers. The scale of the housing affordability problem in the EU is significant. In 2022, the average EU citizen spent 19.6% of their disposable income on housing. However, for those at risk of poverty (earning less than 60% of the national median income), this figure jumped to nearly 38%, underscoring the disproportionate burden on lower-income groups. Rinaldi suggests that the EU could play a crucial role by providing guidelines and frameworks for urban areas. These could be based on successful local initiatives, such as Barcelona’s restrictive measures aimed at addressing their housing crisis. Such EU-level guidance could help cities across the bloc implement effective strategies to balance the benefits of short-term rentals with the need for affordable long-term housing.