The European Commission has presented its first plan on affordable housing, placing the housing crisis at the centre of the EU agenda. With prices rising sharply over the past decade and supply lagging behind demand, Brussels frames access to housing not only as a social issue, but as an economic and climate priority.
The EU plan for affordable housing responds to a structural shortage
Housing has returned to the heart of the European debate, not merely as a physical need but as a genuine social emergency. With the launch of the first European plan for affordable housing, the Commission aims to guarantee access to homes that are affordable, sustainable and of good quality.
Over the past ten years, house prices have increased by more than 60% and rents by more than 20%, a dynamic that has not been matched by income growth.
This trend affects young people, families, workers and students, and has a direct impact on EU competitiveness, limiting labour mobility, the attractiveness of cities and access to education. For Brussels, the housing crisis is no longer a sectoral issue, but a combined economic, climate and social challenge.
More homes, but also more sustainable
The European plan for affordable housing is structured around four pillars:
- increasing supply
- mobilising investment
- regulatory reforms
- protecting vulnerable groups
The key novelty lies in an integrated approach linking affordability, quality of living and energy efficiency.
According to the Commission, more than 2 million new homes are needed each year to close the gap between supply and demand, including around 650,000 additional units compared with current levels. This implies an estimated annual investment requirement of €150 billion. Such a challenge cannot be addressed without a profound transformation of the construction sector, still marked by low productivity, shortages of skilled labour and rising costs.
The European Housing Strategy therefore focuses on industrialisation, digitalisation of processes, low-emission materials and faster, more circular construction models. It also emphasises the renovation and conversion of existing buildings to bring vacant properties back onto the market rather than relying solely on new construction.
Housing and energy transition as a structural link
Within the plan, reducing energy bills is an integral part of housing policy. The EU notes that every euro invested in energy efficiency can generate up to €12 in savings over a building’s lifecycle, lowering the burden of energy costs on household income.
The long-term vision is further reinforced through the link with the New European Bauhaus, which aims to expand urban regeneration projects, improve architectural quality and strengthen social inclusion.
“This Plan sets out concrete actions to make housing more affordable, by stimulating investment, regulating short-term rentals, cutting red tape and supporting the most affected groups in our society. Because housing is not just a commodity. It is a fundamental right. We must mobilise every euro and do everything possible to ensure that everyone in Europe can afford decent housing,” said Dan Jørgensen, Commissioner for Energy and Housing.
A specific chapter addresses short-term rentals, increasingly concentrated in urban and tourist areas. The plan foresees a new European legislative initiative to help cities and regions manage the phenomenon in areas under housing pressure, balancing tourism, the real estate market and the right to housing.
Less bureaucracy, more investment
Alongside policy objectives, the plan tackles one of the sector’s most serious constraints: slow administrative procedures. The Commission announced a simplification package to accelerate permits and authorisations, with a strong emphasis on digitalisation. A revision of State aid rules will allow Member States to support affordable housing without complex approval procedures.
The financial dimension of the plan is significant. The Commission confirmed that €43 billion has already been mobilised through existing instruments such as Cohesion Policy, InvestEU and NextGenerationEU.
Additional resources will include:
- an estimated €10 billion in 2026–2027 through InvestEU
- at least €1.5 billion from reprogrammed Cohesion Funds
- future allocations under the next long-term EU budget (2028–2034) and the Social Climate Fund
The initiative aims to generate a strong leverage effect. By 2029, national and regional promotional banks are expected to invest €375 billion. To coordinate these flows, a pan-European investment platform will be created in cooperation with the European Investment Bank, with the objective of attracting substantial private capital and overcoming project fragmentation.
Next steps
The coming months will focus on implementation. A new European Housing Alliance bringing together Member States, cities, regions, institutions, housing providers, social partners, industry and civil society will guide the rollout of the plan. Before the end of the current mandate, a progress report is expected.
“We are satisfied with the direction Europe is taking to respond to the housing emergency that we have been highlighting for some time,” said Federica Brancaccio, President of Ance, commenting on the Commission’s approval of the housing plan. “The four pillars identified by the EU respond to the proposals we have put forward: a multi-level approach combining reforms, financial instruments, fiscal leverage and simplification of processes. We now hope this will soon translate into concrete solutions for citizens.”
