Tackling Europe’s housing crisis

Affordbale, eco-friendly houses in Nijkerk, the Netherlands. Banner image: Shutterstock/INTREEGUE Photography

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Europe is in the midst of a housing crisis. From Paris to Warsaw, Dublin to Athens, an increasing number of people in the EU are struggling to afford the rising cost of housing. Even before the start of the pandemic, one in ten Europeans were spending more than 40% of their income on housing. In urban areas in particular, many people find themselves in a dire situation and are driven out of the city. Also, the quality of housing is often deplorable. Far too many people in Europe are living in overcrowded dwellings and damp or poorly insulated homes, with unaffordable utility bills.

That is why in January the European Parliament adopted its report Access to decent and affordable housing for all. Access to housing is a fundamental right, and one that is guaranteed at EU level. But it has become painfully clear to me that today, European rules are often better at protecting those making profit on the housing market than people who need a roof over their head. This has to change. 

There’s an economic and social crisis unfolding, and we find ourselves at a crucial moment when housing insecurity and household debt are rising. Many Europeans were evicted from their houses during the financial crisis that started in 2008. Investors were quick to sweep up this housing as an “investment opportunity”. We must by all means avoid a repetition of this horrific scenario with the economic downturn that is taking place as a result of the pandemic. This is why action is needed now, at not only national but also EU level.

Investment in affordable and social housing

There is an investment gap in affordable and social housing of EUR 57 billion per year in the EU. Over the last decade, the share of social housing has decreased in most member states. Investment in affordable, social and energy-efficient housing should be a priority for the EUR 750 Billion “Next Generation EU” initiative. The EU’s new fiscal rulebook should also create space for more public investments, and the European Semester should set affordable housing as an important policy goal, instead of only seeing the development of housing prices as a macroeconomic risk factor.

Read: Three Ways to Make Housing More Affordable by Mark Pearson, Deputy Director of Employment, Labour and Social Affairs, OECD

Read: Three Ways to Make Housing More Affordable by Mark Pearson, Deputy Director of Employment, Labour and Social Affairs, OECDRead: Three Ways to Make Housing More Affordable by Mark Pearson, Deputy Director of Employment, Labour and Social Affairs, OECD

Rebalancing housing policy

The housing policies of many countries have been unilaterally focused on supporting home ownership, without taking into account that some fiscal support measures for mortgage borrowers have contributed to driving up prices and a growing divide in the housing market. Low- and lower middle-income groups are confronted with home ownership as an unreachable dream, endless waiting lists for social housing and skyrocketing rents in the private rental market. To achieve neutrality of tenure housing policy needs rebalancing, with stricter rental regulations that better ensure the security of tenure of the tenants in the rental market and reverse the trend towards temporary rental contracts. In the overheated rental markets of most large cities, rent control and rent stabilisation measures are needed for this rebalancing exercise.

Tackling financialisation of the housing market

Rather than a fundamental right to be guaranteed for all, housing has increasingly been considered simply as a market to make profits. Through speculative acquisitions and the so-called financialisation of the housing market—especially in cities—some investors treat housing as a tradeable asset. This has a dramatic effect on prices. Governments need to fight speculation and vacancy through taxation measures and sustainable urban planning. Action can be also be taken at EU level by looking into the impact banking and finance rules have on the financialisation trend, putting transparency tools in place for real estate transactions and ownership, and putting forward proposals to better protect mortgage borrowers from eviction.

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An ambitious Renovation Wave

We know massively investing in housing renovation is good for climate and jobs, but it also can get people out of energy poverty and into decent homes by focusing efforts on social housing and the least energy-efficient houses. A deep renovation of 3% of the European building stock per year, which would improve the energy performance of these buildings by at least 60%, can create 2 million jobs. This should be prioritised in the economic recovery from the COVID-19 pandemic, and is a good example of what a just transition to a climate-neutral society—that leaves no one behind—should look like.

An EU goal to eradicate homelessness

Everyone has the right to a home. Homelessness is an extreme form of poverty and a violation of human rights. Homelessness has almost doubled in the EU over the last 10 years. The moratoria on eviction and temporary shelters for the homeless that have been put in place as emergency measures should be maintained as long as needed. They should be followed suit by a structural approach based on the “housing first” principle. Homelessness is not a fact of life. We can solve it if we want to. That’s why at EU level we should agree on a target to end homelessness by 2030.

People were already struggling to afford a proper roof over their heads before the pandemic—and it has made the importance of a decent place to call home even clearer. We need action at all levels to realise the right to housing for all.

Check out the new OECD Housing Gateway for a wealth of data and work on housing

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Tackling COVID-19 Housing Climate Sustainable Development Goals

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Kim van Sparrentak

Member, European Parliament

Kim studied Political Science and Urban Environmental Management and during her studies was active as a co-chair at DWARS Amsterdam. With the Young European Greens (FYEG), Kim was a member of the climate and energy working group. Later on, she started working as mobility communication officer at Milieudefensie and was elected as co-president of FYEG. Here she represented more than 10,000 European young people in their fight against climate change. In 2019 Kim was elected MEP for GroenLinks.