On Tuesday (16 December), the European Commission launched the European Affordable Housing Plan, seeking to tackle a social crisis that has seen house prices soar by more than 60% in a decade in Europe. The plan outlines a comprehensive set of investments, legislative reforms, and simplified state aid rules designed to increase the availability of quality housing. It aims to bridge the gap between national responsibilities and EU-level support, thereby revitalising the construction sector and providing immediate assistance to those currently unable to access the property market.
What’s in the package
The Commission’s new plan acknowledges that while housing policy remains primarily the responsibility of national and local governments, the scale of the crisis requires a “European effort.” The strategy focuses on four main pillars:
- Increasing supply: Boosting the construction of new, sustainable homes.
- Triggering investment: Mobilising €43 billion in EU funds and creating a new pan-European investment platform.
- Cutting red tape: Simplifying the planning and permitting procedures that often stall new developments.
- Targeted support: Specifically helping the most affected groups, including those in “stressed” housing areas.
State Aid rules
A significant hurdle to affordable housing has been the complexity of State Aid rules. European Commission Executive Vice-President Ribera announced a major overhaul to these rules to make them “simpler, faster, and more effective.”
Under the revised framework, Member States will have greater flexibility to finance the purchase of land, renovate old buildings, and enhance climate resilience. To ensure that these investments provide long-term benefits to the public, supported projects must remain affordable for a minimum of 20 years.
The problem of short-term rentals
Finally, to combat the proliferation of short-term rentals in some cities, the Commission will introduce legislation next year allowing local mayors to designate “stressed housing areas,” according to Commissioner Jørgensen. In these areas, authorities will have the legal means to regulate short-term rentals, ensuring that houses serve as homes for residents rather than merely hotel rooms for tourists.
