As the European Commission embarked on its 2024-2029 term under Ursula von der Leyen’s renewed leadership, a significant development has emerged: the transformation of the Energy portfolio into the ‘Energy and Housing’ Commissioner, now overseen by Denmark’s Dan Jørgensen. This move marks the first time housing has been explicitly recognized at the EU level, raising the question—does the Commission have the tools to make a real impact, or will this remain a symbolic change?

Why Housing Has Become a European Issue

Housing has historically been a national and local competence rather than an EU responsibility. However, worsening conditions have made inaction untenable. According to Eurobarometer data, 10.6% of urban and 7% of rural households spend over 40% of their disposable income on housing. In countries like Greece and Denmark, the figures rise to 31% and 23.3%, respectively.

The crisis extends beyond personal affordability—it threatens economic stability, delays key life milestones like starting a family, and fuels the rise of far-right populism across Europe. Given these stakes, the European Commission has acknowledged the issue at the highest level, with von der Leyen promising a “European Affordable Housing Plan” in her October speech to the European Parliament.

Can the EU Deliver on Housing?

The European Commission’s core role is to propose legislation, manage the EU budget, and oversee policy implementation. While it lacks direct control over national housing policies, it does have mechanisms that could influence the market.

Financial Tools for Housing

Several EU funding instruments could be leveraged to support affordable housing initiatives:

• Cohesion Fund (€42.6 billion, 2021-2027): Possible amendments may allow funds to be injected into housing markets, doubling member state investment.
• European Social Fund Plus (ESF+) (€142.7 billion, 2021-2027): Supports vulnerable groups by funding social housing projects, as seen in Italy, France, and Ireland.
• European Regional Development Fund (ERDF): Allocates 8% of its budget to sustainable urban development, including housing renovation in Central and Eastern Europe.
• European Investment Bank (EIB): Finances affordable rental housing, social housing, and urban regeneration, with past investments in Spain, Belgium, and Ireland.

Legislative and Regulatory Influence

Beyond financing, EU regulations have a significant impact on housing:

• State Aid Rules: Current restrictions limit government support for social housing, prompting calls for reform to allow broader eligibility and flexibility.
• Energy Efficiency Directive: Building standards influence renovation costs and housing supply; revisiting the directive could ensure cost-effective energy efficiency.

New Initiatives and Strategies

The Commission can also pioneer fresh approaches to tackling housing affordability. The Pan-European Investment Platform for Accessible and Sustainable Housing, developed in collaboration with the EIB, aims to streamline financing for housing projects. Meanwhile, the European Semester, the EU’s annual economic coordination cycle, could prioritize housing investments and best-practice sharing among member states.

Further steps could include enhancing local-level partnerships, monitoring housing market trends, and supporting innovative policy solutions tailored to different regional challenges.

Challenges and Political Realities

Despite these potential avenues, bureaucratic complexity and political fragmentation pose major obstacles. Multiple EU institutions and funding mechanisms risk overlapping or working at cross-purposes. Additionally, with a more divided European Parliament, reaching consensus on housing policies may prove difficult.

MEP Irene Tinagli, chair of the newly established parliamentary housing committee, has emphasized the need for political will and cooperation. She warns that without broad agreement, proposed solutions may create false hope rather than tangible results.

A Turning Point for EU Housing Policy?

As Europe grapples with an aging population, rising housing costs, and increasing social discontent, the urgency of addressing the crisis has never been greater. The European Commission has financial, regulatory, and strategic tools at its disposal. However, whether it can translate these into meaningful action depends on its ability to navigate political hurdles and coordinate effectively across institutions.

If successful, the EU could establish housing as a fundamental right rather than a privilege. But if political infighting prevails, the crisis will persist, exacerbating inequality and fuelling further instability. The coming years will determine whether the EU’s new focus on housing is a transformative step—or just another unfulfilled promise.

References

Pereira, N. D. (2025, January 11). Can the EU’s New Housing Commissioner Truly Address Europe’s Housing Crisis? Retrieved from Euro Prospects – European Politics and Policy: https://europrospects.eu/can-the-eus-new-housing-commissioner-truly-address-europes-housing-crisis/

Soler, P. (2025, February 21). Housing crisis: EU can do ‚much more‘ than build new homes, says top MEP. Retrieved from EuroNews: https://www.euronews.com/my-europe/2025/02/21/housing-crisis-eu-can-do-much-more-than-build-new-homes-says-top-mep

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