Cities across Europe are grappling with a worsening housing crisis driven by a shortage of affordable homes, the rising cost of living, and the proliferation of short-term rentals. This situation is particularly dire for low- and middle-income families.
A recent Eurofound report, ‘Living conditions and quality of life. Unaffordable and inadequate housing in Europe,’ reveals that families are spending more than 40% of their income on housing. According to Hans Dubois, Senior Research Manager at Eurofound, rent for those aged 30-39 has risen sharply, from 38% in 2010 to 45% in 2019.
“Our cities are at the forefront of this challenge,” says André Sobczak, Eurocities Secretary General. “Housing affordability has become a critical issue as costs surge, outpacing income growth and pushing millions of Europeans to the brink.”
Beyond Housing: A Need for Comprehensive Renovation
The issue extends beyond mere housing availability. Vulnerable groups face heightened risks of energy poverty due to inadequate housing conditions, including lack of space, poor insulation, and limited access to green areas and public transport. Dubois notes that 26% of the EU population is living in homes with poor energy efficiency, leading to higher energy costs and difficulty in maintaining adequate indoor temperatures.
For Grzegorz Gajewski, Policy Officer in Directorate-General Employment at the European Commission, the solution to these challenges is “a holistic approach to tackle interconnected issues such as energy efficiency, renovation, and the broader sustainability agenda”. The Affordable Housing Initiative, he adds, aims to strengthen local capacities to provide sufficient, energy-efficient, and aesthetically designed housing under the New European Bauhaus framework.
“Public investment plays a crucial role, but scalable solutions that attract private investment are necessary to meet the huge demand for affordable housing,” adds Jean Charles Flaus, Public Sector and Project Finance Specialist at the European Investment Bank.
“The public and private sectors agreeing on this is essential,” says Marco Marcatili, Chief Development Officer at Nomisma. “Collaborative efforts between public, private and nonprofit sectors are also gaining traction, leveraging innovative financing models and sustainable building practices to increase housing supply,” he explains. These initiatives not only aim to provide affordable housing but also prioritise energy efficiency and social equity, thereby contributing to more resilient economies.
For Dubois, “to address the growing challenges of housing unaffordability, key policy recommendations [should] include increasing the housing supply, expanding access to social housing, and implementing preventive measures to avoid the accumulation of rent and mortgage debts.” These steps will ensure that more people have access to affordable and secure housing options, particularly for vulnerable groups facing financial strain.
Finding solutions was the aim of the Social Innovation Lab, hosted by the city of Turin last week. Participants gathered to discuss challenges and share good practices to make housing affordability and renovation of houses a closer reality.
Tackling the Housing Crisis: Local Innovation, Global Impact
Despite obstacles and limited capabilities and funding, cities across Europe have not hesitated to implement innovative approaches to address the housing challenge. Many are focusing on developing affordable housing for those most in need, while others are working on regenerating neighbourhoods, blending residential spaces with essential amenities to foster vibrant, inclusive communities. Adaptive reuse of underutilised buildings is another popular strategy, converting vacant spaces into affordable housing options.
The city of Turin, for instance, has engaged in long-term dialogue with local stakeholders, including the Compagnia di San Paolo, a philanthropic organisation that funds affordable housing solutions for vulnerable groups. Budapest has created a Housing Agency to provide affordable housing and renovate privately-owned apartments, while also repurposing public buildings for social housing. “Addressing housing challenges requires a strong focus on the local level,” explains Almos Papp, an architect at Budapest Municipality, “especially by involving marginalised groups in decision-making.”
In Madrid, rising home prices and rental costs have left many, particularly low-income families and single-parent households, on the edge of poverty. With rental costs 82% higher than the national average, social housing makes up just 2.5% of the market, compared to the European average of 9%. The city’s Social Emergencies Department has taken steps to mitigate housing instability by offering mortgage assistance, negotiating with property owners, and providing temporary housing for those at risk of homelessness.
Renovation should be affordable, but also accessible
As discussed at the recent Social Innovation Lab in Turin, affordable renovation must also be accessible to all, including vulnerable groups. However, many residents struggle to navigate the complex language of housing renovation and energy transition programs. Madrid’s Orcasitas Renovation Programme has tackled this by improving communication with local communities, while the Polish city of Łódź has introduced “lighthouse keepers,” community ambassadors who provide clear information about upcoming renovations.
Similarly, the King Baudouin Foundation in Brussels has launched the Fair Energy Transition for All project, gathering input from over 1,000 disadvantaged people across nine EU countries to ensure their voices are heard in policy debates around the energy transition.
Moving forward, it is clear that making housing accessible involves not only structural solutions but also improving how policies are communicated and implemented at the local level.
Mayor and deputy mayors find solutions
During the Social Innovation Lab, the Mayor of Turin, Stefano Lo Russo, and Housing Councillor, Jacopo Rosatelli, met with representatives from major Italian cities to share solutions to the housing crisis. A pivotal moment in European housing policy was also marked by the recent appointment of Dan Jørgensen as the first-ever European Commissioner for Housing. His role includes overseeing the European Affordable Housing Plan, which focuses on tackling the structural drivers of the housing crisis and promoting energy-efficient housing renovations.
Dan Jørgensen is the first-ever commissioner on housing.
The housing crisis has hit cities hard. We've got Shadow Commissioners to advocate for stronger investments in affordable housing:
🇦🇹Kathrin Gaal, Deputy Mayor of @Stadt_Wien
🇫🇷@RenaudPayre, Vice-president of @grandlyon pic.twitter.com/r2mgc5VYiN— Eurocities (@EUROCITIES) September 19, 2024
This shift recognises housing as a public good at the European level, despite the EU lacking formal housing competence. Initiatives like the European Green Deal and the Renovation Wave Strategy offer cities new opportunities to address housing affordability, with support from recently approved short-term rental regulations.
Eurocities will now be led by two Shadow Commissioners: Kathrin Gaál, Deputy Mayor of Vienna, and Renaud Payre, Vice-President of Lyon Metropole, who will advocate for stronger investments in affordable housing. “Their involvement underscores our commitment to ensuring that housing challenges are effectively addressed at the EU level,” concludes Sobczak.
