Social Policy

A roof over Europe

A roof over Europe - Shaping Europe

Europe’s housing crisis and the new Commissioner’s role.

When I started my bachelor’s degree at the University of Groningen in 2020, I was lucky enough to secure my own studio. Many of my fellow students, however, found themselves unable to secure accommodation for months, some sleeping in big tents with rows of beds for far longer than acceptable which stirred the news. Hardly the ideal way to start the exciting chapter of student life which resulted in many giving up their studies and going home. This is just one example of what the ‘housing crisis’ plaguing Europe has meant for people. But it is a good one as it demonstrates how the freedom of movement that we so enjoy in the European Union (EU) can hit a roadblock due to country-specific characteristics.

The EU has historically taken a backseat on housing policy, which remains a national prerogative. Nevertheless, amidst the crisis-driven discourse, there has been a growing focus on housing at the EU level, culminating in Commission President Von der Leyen appointing a Housing Commissioner this year who will be in charge of developing a European Affordable Housing Plan. This article explores the potential of the new Commissioner for Housing to reconcile EU ambitions with national housing regulations, focusing on key challenges and divergences in policy approaches.

Housing policy framework in the EU

Traditionally, housing regulation in the EU has worked under the principle of subsidiarity. This means that decisions should be made at the national or even local level unless they are not sufficiently effective, and EU intervention is needed. This principle has kept housing largely within the domain of national governments, reflecting the fact that housing markets and policies are deeply intertwined with local economic, social, and cultural factors. These conditions vary significantly across the EU, depending on factors such as economic structure, demographic trends, land-use policies, and historical housing development patterns. These differences, for which examples will be provided a bit further down, underscore why national governments have long resisted ceding control of housing policy to the EU. Housing is seen as integral not only to social welfare policy but also to local economic management and regional development. The political and cultural sensitivities around homeownership, tenant rights, and housing markets vary greatly, making it difficult to imagine a one-size-fits-all solution at the EU level.

Despite the formal limitation of EU powers in housing, the Union exerts a de facto influence on national housing policies through various channels, especially in the context of multi-level governance. This refers to the collaboration and interaction between different levels of government – supranational, national, regional, and local – on policy matters. Although housing policy is primarily a national competence, the interconnected nature of EU policies in areas such as competition, state aid, social inclusion, energy efficiency, and economic governance creates a system where national housing policies are often aligned, at least partially, with EU objectives. For example, the European Semester, a socio-economic coordination mechanism, provides non-binding recommendations that encourage member states to align their housing policies with EU goals, particularly regarding affordability, market stability, and financial growth. EU Competition Law affects housing markets by regulating state aid, influencing how governments subsidise housing projects. The European Green Deal’s Renovation Wave pushes for energy-efficient housing, requiring significant investment in modernising older buildings, which impacts national policies. Finally, social policy coordination connects housing with broader EU objectives like poverty reduction, driven by commitments to affordable housing under the European Pillar of Social Rights.

The EU’s growing involvement in housing, particularly through its financial and environmental initiatives, has led to inevitable clashes with national regulations and prerogatives. Some member states, like Germany, have strong tenant protection laws and strict rent control mechanisms, while others, such as the Netherlands, face public pressure to adopt more robust controls amidst housing shortages. Now more than ever, as the EU seeks to address broader issues like sustainability, sufficient supply, affordability, and social inclusion, its role in shaping housing policy is seen to be growing. While this can lead to tensions with national approaches, it brings us to the discussion of the latest push of the new European Commission on the topic.

The new EU Commissioner for Housing: role and responsibilities

In 2022, EU residents spent about 19.6% of their disposable income on housing. However, for those at risk of poverty, this figure soared to nearly 38%, highlighting the heavy financial burden housing places on lower-income individuals. Amidst growing concerns over skyrocketing property prices and housing shortages across member states, Commission President Von der Leyen stressed that housing is a “European social issue,” promising to address it through coordinated EU efforts. This comes with the appointment of the first Housing Commissioner. The designated man for the job is Dan Jørgensen, a Danish Social Democrat, who served as his country’s climate and energy minister, adopting ambitious climate targets.

The Commissioner’s role is to spearhead initiatives aimed at improving access to affordable housing, tackling homelessness, and addressing housing market imbalances exacerbated by rising costs and shortages in many EU member states. Key responsibilities include the development of the first-ever European Affordable Housing Plan, in coordination with local, national, and EU-level stakeholders, to promote social housing, support sustainable housing solutions, and ensure that housing policy aligns with the broader objectives of the European Green Deal. This involves fostering energy efficiency through renovation projects, reducing carbon emissions, and advancing digitalisation in housing infrastructure. To make that last bit less abstract, digitalising of housing infrastructure refers to, for example, the use of geospatial data to design proper housing layouts and predict how they will affect and react to phenomena such as traffic and environmental conditions.

The Commissioner is also tasked with advancing social inclusion, ensuring that marginalised communities have better access to safe, affordable, and sustainable housing. One of the main goals is to strengthen the resilience of the housing sector, improving urban development while also making rural and underdeveloped areas more attractive for residential projects.

As pioneering as that all sounds on paper, experts from leading think tanks are not sure how these efforts can go beyond the creation of a mechanism of best practices. Such a level of policy coordination already seems to be present through the funding and cohesion schemes as we have explored above. In that sense, it is not exactly clear how the new Commissioner will provide a robust approach, overarching the intrinsic national and local character of housing policies.

Case studies: diverging housing policies

As promised, we will now take a look at the different housing systems across the EU, shaped by distinct economic, social, and historical factors. This diversity results in significant differences in how countries manage housing affordability, social housing, and market regulation. For the more curious among our readers (especially if you are interested in specific statistics for your country) I strongly suggest taking a look at the “The State of Housing in Europe 2023” report published by Housing Europe, a network of national and regional federations. Here are four contrasting examples that highlight the divergences:

Germany: tenant protections and rent control

Germany, with its long-standing rental market, prioritises tenant protection. Roughly half of the population rents, with strict regulations in place to control rent increases, especially in major cities like Berlin. The Mietpreisbremse (rent brake) limits rent hikes in high-demand areas, and tenants are provided with strong legal protections. However, the pressure on Germany’s social housing sector has grown, as rising construction costs and inflation have slowed down both renovation and new building projects​.

Spain: tackling housing shortages and speculation

In Spain, rapid urbanisation and real estate speculation (buying, selling, flipping properties for maximum profit) have fueled a housing affordability crisis in cities like Barcelona and Madrid. Unlike Germany, Spain’s housing market leans heavily toward homeownership, with less emphasis on long-term renting. Recent policies focus on curbing speculation, limiting short-term rentals, and boosting social housing availability, but progress has been slow due to high land and construction costs​. The Spanish government is using EU Recovery and Resilience Funds to stimulate affordable housing but demand continues to outstrip supply​.

Sweden: social housing and welfare model

Sweden’s housing policy is deeply rooted in its welfare state model. The country maintains a robust social housing sector with strong state support, ensuring affordable and energy-efficient homes. Yet, even here, affordability challenges exist, especially in Stockholm, where rents and home prices have surged. Social housing cooperatives and public housing associations manage a significant share of housing, ensuring long-term stability for tenants while maintaining an active role in the country’s energy transition goals​.

Eastern Europe (Poland): post-communist privatisation and growing urbanisation

In countries like Poland, the housing market has undergone significant transformations since the fall of communism. Before 1989, in Eastern Europe housing was largely owned by the state, with the government responsible for allocating apartments. Housing shortages were common, but rents were kept very low. After the communist systems were dismantled, large-scale privatisation of state-owned housing created a highly fragmented ownership structure. This led to some people buying lots of properties for very cheap through connections while others could not get the opportunity. Although homeownership is now the norm, urbanisation and economic growth have created major shortages of affordable housing, particularly in cities like Warsaw. There are increasing calls for a stronger social housing sector, but government action has been limited due to budgetary constraints and the reliance on private sector solutions​.

Key challenges

The new Commissioner for Housing faces several key challenges in bridging the gap between EU ambitions and national housing policies. A primary hurdle lies in balancing the principle of subsidiarity – where housing regulation remains under national jurisdiction – with growing EU initiatives aimed at addressing the housing crisis. As housing shortages and affordability issues grow across Europe, it is understandable that there is increasing pressure for a more unified EU approach. Nevertheless, the imposition of stricter criteria that can come with it could be seen as invasive on national sovereignty and interfering with localised policies.

Another major point of contention is the divergence in housing regulations across member states. Countries like Germany implement strict rent controls and strong tenant protections, whereas others, like Spain and the Netherlands, struggle with real estate speculation and insufficient social housing provisions. These conflicting priorities complicate efforts to develop EU-wide policies. Additionally, green energy targets under the European Green Deal introduce new requirements for energy-efficient housing, adding to the financial and regulatory burden on national governments.

The funding landscape also presents challenges. While the EU provides significant financial resources, such as through Recovery and Resilience Funds and cohesion policy, member states have varying capacities to absorb and use these funds effectively. For example, countries facing economic constraints may not have the infrastructure or political will to make the necessary investments in social housing or energy-efficient renovations.

Lastly, the social inclusion agenda, which aims to provide equitable housing access to vulnerable groups, adds further complexity. The Commissioner must work to ensure that housing policies not only align with sustainability goals but also address issues like homelessness, housing for migrants, and rural housing shortages, all of which require tailored solutions that respect the specific challenges of each member state.

What now?

Balancing ambitious EU-wide goals with the realities of diverse national housing policies is a tricky task. The success of Jørgensen’s role will depend on how well he can navigate challenges like rent control debates, social housing needs, and sustainability goals. While we can expect a push for greener, more inclusive housing, the real test will be whether the EU can truly unify such varied housing systems without stepping on too many national toes. Thus, considering all this, let us circle back to where we started. I think that as much as we all love the landmark TV show Friends, many of us would prefer not to be living with roommates in our thirties. So, fingers crossed for the new plan!

Iva Dzhunova holds a BA degree in International Relations from the University of Groningen and an MA in European Policy from the University of Amsterdam.

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