Housing crises threaten the EU; solutions involve public/private partnerships and social housing models across Europe.
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The housing crisis is threatening the European Union’s push for common action as it increasingly affects the middle class and hinders the single market. Housing and rental prices have risen much faster than wages across Europe, with rents exceeding 50% of the minimum wage in 16 member states, including Greece. The European Commission needs to propose a plan for affordable and social housing, focusing on increasing supply, regulating short-term rentals, and enhancing cooperation. However, trade unions are demanding greater involvement in policy development and stricter measures against speculation.
While legislative revisions aim to support affordable housing more easily, the European Investment Bank’s action plan lacks clear distinctions between needs for affordable versus social housing. Concerns exist that increased private capital investment may not lead to genuinely affordable homes, as institutional investors often buy up properties, driving prices up or offering temporary low rents before market resale. This financialization of housing has made central city apartments unaffordable for middle-income earners in several major European cities.
In Greece, the Athens mayor criticized the Ministry of Social Cohesion for prioritizing private property financing over utilizing public and non-profit assets for social housing. Furthermore, a recent “social opposition law” was criticized for favoring builders by allowing them to take public land for development, with only 30% designated as social housing. In contrast, successful models exist elsewhere, such as in Belgium (where mandatory construction targets are being enforced) and Spain (which allows local councils to create protected housing). Other examples include cooperative housing movements in Germany and low-profit housing models in the Netherlands.
Some countries face challenges; Hungary’s government acknowledges the crisis but relies on general supply increases without guaranteeing affordability, while Bulgaria’s Sofia struggles with limited resources for its social housing applicants and lacks transparency in allocation processes.
