European cities are at the heart of their citizens’ daily lives, as they are responsible for providing key services such as housing, transport, and social services. As a result, city governments are focused on improving social wellbeing, in collaboration with national and European partners. Cities are now at the forefront of the housing crisis, with housing costs rising faster than wages, leading to growing affordability pressures. In many cities, over 30% of residents are spending more than a third of their income on housing, highlighting the urgent need for adequate funding and support to meet the housing demands of their populations.
Housing is a fundamental human right and central to addressing social challenges. It plays a critical role in upholding the principles of the European Pillar of Social Rights (EPSR), such as equality, access to education, employment, essential services, and healthcare. Adequate funding for housing is essential not only to combat homelessness but also to achieve the objectives set out in the Lisbon Declaration.
European cities are working to create sustainable and inclusive communities where housing affordability is a key challenge. Municipalities, along with housing providers, NGOs, and social landlords, need better and faster access to funding to effectively address the housing crisis. To make progress, funding must be better aligned with local needs, and administrative processes need to be simplified, allowing cities to respond quickly and effectively.
The investment gap in social and affordable housing is estimated at €270 billion per year, according to the upcoming EIB Investment Report 2025. Cities urgently require significant investment to bridge this gap, both for the construction and renovation of housing and for the provision of essential support services. To ensure the effectiveness of these investments, integrated approaches are crucial, as well as transparency in loan conditions, rates, and timelines.
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