The EU can tackle the housing crisis with more robust cohesion funding

In response to the EU’s housing crisis, MEPs voted on a report today calling for stronger, targeted measures to address the urgent need for affordable housing across the EU.

In a report on the role of cohesion investments in resolving the housing crisis, adopted with 32 votes in favor, 4 against, and 0 abstentions, MEPs say closer alignment between housing policies and the EU’s cohesion policy is crucial. Among the report’s key proposals is the call to double the funding for affordable housing through cohesion policy. MEPs propose the introduction of cohesion policy objectives for public, not-for-profit, social, affordable and co-operative housing, and also want to see “a more balanced approach” between support for new housing and for energy efficiency interventions.

According to MEPs, affordable and resilient housing should be a strategic priority for the post-2027 funding framework, with support for renovations and disaster-resistant housing. They propose broadening the scope of housing-related cohesion policy investment to include water efficiency and refurbishing. Affordable housing priorities should, the say, benefit from 100% co-financing and exceptional pre-financing.

Strong role for local actors

The report calls for partnerships with, and active involvement of, local and regional authorities when planning and implementing projects. Centralisation of programs at the national level should be avoided, MEPs say while noting the different needs of different places in the EU. Solutions should simultaneously combat depopulation in certain regions and avoid overpopulation in others, while taking into account the special needs of islands and remote and outermost regions.

MEPs also call on the Commission to propose “off-the-shelf state aid schemes“ to ensure housing support measures can be quickly agreed and for common EU criteria for people that qualify for affordable and social housing supported by cohesion and social funds. They want the European Investment Bank to create a dedicated investment line to fund housing construction and renovation and collaborate with local authorities to ensure its compatibility with cohesion fund investments.

Balance between public housing and public-private-partnerships

According to the report, the stock of available housing should be optimised with a balanced approach between supporting public investment and social housing providers, and stimulating public-private-partnerships. MEP also support reduced bureaucracy for local authorities.

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, and safeguards against speculative investment by for example restrictions on rapid resales.

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, “robust funding” should be dedicated to ending homelessness, combating inadequate housing and addressing energy poverty.

Quote

After the vote, rapporteur Marcos Ros Sempere (S&D, Spain) said: “We are in the middle of a severe housing crisis that impacts everyone, but most of all young people and socially vulnerable groups. We are setting out a way forward through cohesion policy to facilitate an EU housing public stock, which needs to be more broadly funded with an ambitious and robust cohesion policy. These investments in housing also need to follow standards on sustainability and energy efficiency. We need to combat homelessness and ensure that people have a right to stay in urban and rural areas under pressure.”

Background

Between 2015 and 2023, average house prices in the EU surged by 48%, driven by rising construction costs, mortgage rates, limited construction supply, and increased property investments. In 2023, housing expenses surpassed 40% of disposable income for over 10% of urban households and 7% of rural households, underscoring severe affordability challenges. At the same time, 1.3 million Europeans (including 400,000 children) were experiencing homelessness in 2024.

During the EU’s 2021–2027 budget cycle, €7.5 billion of cohesion funds were allocated to housing, mainly through investments into energy efficiency and renewable energy in housing.