Housing crisis: EP calls for robust investment through cohesion funds

EU is going through a sever housing crisis that amounts to housing market failure

National and regional authorities should make use of new flexibilities and increase housing investment

MEPs support renovations and conversions, public-private-partnerships, and investment in social housing

MEPs call for stronger measures to address the urgent need for affordable housing.

In a report adopted today, the European Parliament outlines solutions to the EU’s “severe” housing crisis, which risks deepening existing inequalities between regions and becoming a barrier to labour mobility. Parliament calls for increased and broader EU-level investment from cohesion funds into housing, including upgrades to existing housing stock and investment into new construction. The report was adopted with 462 votes in favor, 142 against, and 63 abstentions.

The report notes that rising housing prices in the EU are the result of several factors including limited supply, bureaucratic barriers, labour shortages, and market dynamics. In response, broader support for housing from EU cohesion funding (which was previously limited to support for energy efficiency and renewable energy in housing) is needed, says Parliament. In the current context of “market failure”, public investment in housing and particularly social housing is needed, and vulnerable people should have access to targeted schemes for affordable rentals, argue MEPs.

Balance between public investment and public-private-partnerships

To address the housing crisis, MEPs urge national and regional authorities to use the mid-term review of cohesion policy (agreed between co-legislators on 15 July), as an opportunity to “at least double” the funding for affordable housing. The stock of available housing should be expanded with a balanced approach between supporting public investment and social housing providers, stimulating public-private-partnerships, and incentivizing private-sector property investment.

Parliament further calls for creating long-term, stable investment conditions that protect tenants’ rights, ensure they are not pushed out of areas experiencing housing pressures (amounting to a right to stay in rent-controlled areas). MEPs also support safeguards against speculative investment, for example restrictions on rapid resales.

Focus on renovation

MEPs support the EU’s current Renovation Wave strategy and argue that it should be integrated more firmly into housing policies. In future, conversions and renovations should be prioritised for support over new builds, says the report. Current support schemes should be extended to transforming empty or underused buildings into housing. However, construction and renovation suffers from a shortage of skilled workers, meaning that more support for vocational training, upskilling and reskilling is needed.

The text also calls for targeted action to address the root causes of homelessness, for example by promoting a “housing first” model. In the next EU budget, ending homelessness, combating inadequate housing and addressing energy poverty for low-income populations should be explicit political objectives. At the same, young people urgently need targeted support as they encounter increasing barriers to finding affordable housing.

Strong role for local actors

Because different places in the EU have different needs, MEPs oppose centralizing investment programs at national level and call for the active involvement of local and regional authorities when planning and implementing investment projects. Solutions should simultaneously combat depopulation in certain regions and avoid overpopulation in others, while considering the special needs of islands and remote and outermost regions - areas where the housing crisis is “particularly severe”, often due to geographical constraints.

Quote

In the debate ahead of the vote, rapporteur Marcos Ros Sempere (S&D, Spain) said: “Housing is the basis upon which people build their lives, not a vehicle for speculation. In a situation where many are spending over 40 % of their income on housing, it is time for the public authorities to intervene so that everyone, including young people wishing to be independent from their parents, can live with dignity. Cohesion policy is a European vehicle for transforming ideas into real policies and to start building a European stock of public housing. We need to invest more through these funds to solve the current crisis. We need to fight speculation, provide long-term funding, and reduce bureaucracy. It is time to get to work on resolving the housing crisis."

Background

Between 2015 and 2023, average house prices in the EU surged by 48%. At the same time, 1.3 million Europeans (including 400,000 children) were experiencing homelessness in 2024.

The European Commission has announced its intention to double cohesion policy investment in affordable housing during its 2024-2029 mandate.