Europe is facing a severe and growing housing crisis that is making it harder and harder for people to find a decent, affordable place to live. From Amsterdam to Athens and Lisbon to Berlin, housing costs are rising faster than incomes, and many residents, especially young adults, low-income households and essential workers, can no longer stay close to where they work or study.
To address this, Eurocities has published a new thematic report on housing, Cities addressing the housing crisis: Innovative and integrated approaches. The report, which was presented at a breakfast debate in the European Parliament, showcases what cities are already doing and sets out what they need from the forthcoming European Affordable Housing Plan.
“When we talk about housing, we have to address the drivers of the crisis, not just its symptoms,” underlined Gabriele Bischoff, Member of the European Parliament and host of the breakfast debate. “People must be able to live where they work and rely on a strong social fabric.”
A crisis hitting cities hardest
According to Eurostat, in many metropolitan areas, one in ten residents spends more than 40% of their income on housing. Findings from the 2025 Eurocities Pulse Mayors survey and city cases confirm that housing pressures are greater in urban areas than national averages suggest.
In Berlin, nearly a third of households already spend over 30% of their income on housing. In Florence, average prices have climbed to around €4,200 per square metre, while the population has declined as residents are pushed out by tourism and speculative investment. Between 2019 and 2023, apartment prices in Zagreb rose by 55%, while wages and benefits did not keep pace.
People must be able to live where they work and rely on a strong social fabric
The impact, however, is not evenly spread. Low-income households and people in precarious jobs face the most acute insecurity and overcrowding, while young people and students often end up competing for scarce, expensive rentals, frequently in poor-quality or informal accommodation.
Key workers, including teachers, nurses and care workers, are increasingly unable to live near their workplaces, undermining the resilience of essential services. Families with children struggle to find larger, affordable homes, and many older people lack access to age-appropriate, accessible housing, forcing them either to stay in unsuitable dwellings or to move away from their communities.
According to André Sobczak, Secretary General of Eurocities, this is not only a social emergency but also a threat to Europe’s economic and democratic future. If people cannot afford to live in cities, it will be harder to deliver the green and digital transitions and to maintain trust in public institutions.
Expanding social and affordable housing
In Utrecht, demand has far outstripped supply. The city has a shortage of almost 30,000 homes, and prices have more than doubled in the past decade.
“When I was a teacher, I had to live outside the city,” explained Dennis de Vries, Vice- Mayor of Housing in the City of Utrecht. “We do not want Utrecht to be a city only for the privileged, we want it to be a city for all.”
Rennes Metropole shows what a comprehensive strategy can look like. The metropolis aligns housing growth with sustainable urban planning, with 65% of new housing in dense, well-connected areas and strong guarantees for social mix.
Non-profit and limited-profit models
Vienna remains one of Europe’s most established examples of a good governance model by relying on limited for profit housing companies. A large share of the housing stock is provided by municipal and limited-profit associations, which can access city loans and develop on publicly owned land in exchange for long-term affordability guarantees.
We do not want Utrecht to be a city only for the privileged, we want it to be a city for all
“Affordable housing needs to be open to everyone, not just the poorest, if we want to prevent segregation based on postal address,” stressed Veronika Iwanowski, Head of International Relations in Vienna City Council, and Chair of the Eurocities Working Group on Housing. “Housing is not only about affordability, but also about quality of life.”
Using land and planning to keep housing affordable
Planning and land policy are central to how cities manage housing costs. Cities like Rennes and Florence use planning obligations, density bonuses and strict anti-displacement measures to ensure that new development contributes to affordable housing and social mix.
At the same time, tourist pressure and the spread of short-term rentals have become a major challenge in many historic cities. Local authorities are increasingly using registration systems, night caps on short-term rentals, and zoning restrictions to protect residential stock and prevent entire neighbourhoods from being hollowed out.
Control over land and clear rules for its use are crucial for long-term affordability. “Vienna is often seen as this ‘socialist city’, but the model that started 100 years ago was based on economic decisions,” explained Dr Bernd Riessland, Scientific Advisor on Limited-Profit Housing for Housing Europe and Board Member of the VÖWG. “If you give public money, you need to add conditionalities. For example, when agricultural land becomes buildable, at least two thirds of the surface should have a regulated price.”
Affordable housing needs to be open to everyone, not just the poorest, if we want to prevent segregation based on postal address
Putting people at the centre of urban regeneration
Once a heavily industrial city, Lodz launched a large-scale revitalisation programme in 2014, focused on reusing vacant and dilapidated stock and bringing life back to the historic centre.
“Lodz was in decline, and we needed to rebuild our city,” said Aleksandra Trzcińska, Acting Head of the Department of Housing Programmes, Revitalisation Bureau in City of Lodz. “We did it by putting people at the centre, renovating homes and public spaces so residents could feel proud to stay.”
Despite depopulation, housing affordability has not automatically improved. The city is therefore combining physical renovation with social support, tenant protections and affordable housing provision, and calling for dedicated EU instruments for revitalisation that empower municipalities rather than speculative investors. “Even in a shrinking city, the only source of affordable housing is the municipality, not private owners,” added Trzcińska.
What cities expect from the European Affordable Housing Plan
The debate in the European Parliament made clear that cities are already acting, but expect the European Affordable Housing Plan to remove obstacles and help scale up what works.
First, cities want more flexible and direct EU funding that reaches municipalities and non-profit providers without excessive administrative hurdles. “We are asking for a special financial instrument for revitalisation,” Trzcińska stressed, “one that is easy to access for all cities and not just the big metropolises that have the resources.”
Second, cities are calling for reforms to state aid rules and financial frameworks so that public investment in affordable housing is treated as a strategic long-term asset, not an exception. Current rules often limit the ability of certain cities to work with limited-profit and non-profit providers, or to keep land and housing in public hands.
We are asking for a special financial instrument for revitalisatiothat is easy to access for all cities
“Change of state aid rules is crucial,” argued de Vries. “Every country is different, and national competences are different across Member States. You have to look at the differences in Europe to make sure you make it work.”
Third, local leaders want better monitoring and clear triggers for action at EU level. Housing affordability indicators should be embedded in the European Semester and other EU monitoring tools, with thresholds that signal when housing has become systematically unaffordable in a territory and require national and European responses.
Fourth, cities are asking for integrated support for urban regeneration and fair transitions. Housing policy must be aligned with climate targets and energy renovation so that the green transition improves, rather than undermines, affordability. Cities are calling for EU instruments that support projects which renovate homes, upgrade neighbourhoods and protect residents from displacement.
Finally, there is a strong expectation that the EU will help cities tackle financialisation and short-term rentals. Local authorities need legal backing and a level playing field to regulate speculative investment and platform-based rentals that remove homes from the long-term market.
What the EU has to say
On the EU side, Agnese Papadia, Head of Unit for the European Affordable Housing Plan in the European Commission, recognised the scale of these expectations.
“We know there are many expectations around the European Affordable Housing Plan,” she said. “We want to use this opportunity to boost supply of social and affordable housing, mobilise public and private finance, and focus on the areas and groups under the greatest pressure. In the implementation, we need to work together, the EU and cities.”
In the implementation of the European Affordable Housing Plan, we need to work together, the EU and cities
MEP Bischoff linked these demands directly to Europe’s broader political agenda.
“The challenges and solutions in housing are deeply linked with cities,” she stressed. “If people feel they are pushed out of their neighbourhoods and can no longer afford a decent home, trust in our institutions will erode. We need to make sure EU funds and rules really support citizens, not speculation.”
Summing up the debate, André Sobczak explained that the Plan will be judged by whether it responds to these local realities. “This is the moment to commit to a genuinely European effort to ensure that everyone has access to a safe, affordable and quality home,” he stated.
Cities, he stressed, are ready to contribute. The question is whether EU policies and resources will match their ambition.
