Executive Summary
- European Union national leaders are set to abandon decades of a hands-off approach to housing policy, convening for the first time at the highest level to debate a united response to the escalating housing crisis.
- This policy shift aligns the European Council with the European Commission and Parliament, which have already prioritized housing affordability, leading to the appointment of a dedicated housing commissioner and plans for an Affordable Housing Plan.
- Despite this institutional shift, significant challenges remain, including reaching consensus among national leaders on the extent of EU intervention, balancing subsidiarity, and agreeing on specific measures to address the crisis.
The Story So Far
- The European Union is abandoning its decades-long hands-off approach to housing policy, which was traditionally considered a national competence, due to an escalating continent-wide housing crisis. This crisis is now seen as fueling the far-right, impacting citizens’ fundamental rights, undermining competitiveness, and eroding trust in democratic institutions, prompting EU leaders to debate a united response at the highest level for the first time.
Why This Matters
- The European Union’s decision to address the housing crisis at the highest level marks a significant institutional shift, abandoning decades of a hands-off approach and acknowledging the issue as a critical bloc-wide concern impacting fundamental rights, economic competitiveness, and trust in democratic institutions, while also aiming to counter the rise of the far-right. However, this new focus faces immediate challenges, as national leaders remain divided on the extent of EU intervention, particularly concerning issues like curbing speculation or regulating short-term rentals, which could lead to difficult negotiations and determine the ultimate scope and effectiveness of the EU’s forthcoming Affordable Housing Plan.
Who Thinks What?
- European Council national leaders acknowledge the housing crisis as “pressing” and are moving to debate a united EU response to complement national efforts, though they emphasize the principle of subsidiarity and may be divided on the extent of direct EU intervention.
- The European Commission and European Parliament, supported by center-left groups, advocate for a more proactive and comprehensive EU approach, having already prioritized housing affordability, appointed a dedicated commissioner, and initiated plans for an “Affordable Housing Plan” and regulatory measures.
- Housing Europe, representing social housing providers, and local leaders, such as Barcelona Mayor Jaume Collboni, are monitoring the summit for a clear mandate for the Commission to develop an Affordable Housing Plan that includes agile funding, regulatory tools, and decision-making capacity for urban centers, while expressing caution that subsidiarity should not limit effective intervention.
European Union national leaders are set to abandon decades of a hands-off approach to housing policy, convening in Brussels this Thursday for a European Council summit to debate a united response to the continent’s escalating housing crisis. This marks a significant institutional shift, acknowledging that the crisis has become impossible to ignore and is fueling the far-right across the bloc.
A Shift in EU Policy
For decades, housing policy was considered a national competence, with the EU limiting its involvement to tangential legislation on topics like the energy performance of buildings or the quality of construction materials. However, European Council President António Costa highlighted the urgency, stating this is the first time EU leaders will debate the issue at the highest level, aiming for the EU to complement national efforts.
This move aligns the Council with the European Commission and the European Parliament, both of which have recently prioritized housing affordability. The shift began ahead of the 2024 European Parliament election, with center-left groups pushing the issue to the forefront of the bloc’s agenda.
Commission’s Initiatives and Parliament’s Role
The Commission has already appointed Denmark’s Dan Jørgensen as the bloc’s first dedicated housing commissioner. Jørgensen is slated to unveil the EU’s landmark Affordable Housing Plan in December and has announced plans for an initiative on short-term rentals in 2026.
Following the Commission’s lead, the Parliament launched a dedicated special committee in January to analyze the scale of the problem. This committee is due to present its proposed measures in the coming months.
Council’s Engagement and Challenges Ahead
President Costa, who included housing on the EU Leaders Agenda for 2025, views the crisis as a triple threat: impacting the fundamental rights of citizens, negatively affecting competitiveness, and undermining trust in democratic institutions. Despite this, reaching a consensus within the Council is anticipated to be challenging, with national leaders divided on issues like curbing speculation or regulating short-term rentals.
Draft conclusions for this week’s summit described the crisis as “pressing” but primarily proposed that the Commission present its already-scheduled Affordable Housing Plan. The text also emphasized “due regard” for subsidiarity, the legal principle that holds the EU should only intervene in an area if it’s certain to achieve better results than actors at the national, regional, or local level.
Stakeholder Perspectives
Sorcha Edwards of Housing Europe, which represents public, cooperative, and social housing providers, suggested that the Council’s emphasis on subsidiarity might be a preemptive move to limit intervention, potentially setting the stage for a clash with the Commission’s Affordable Housing Plan. However, Edwards also noted that a focus on subsidiarity could be beneficial if it leads to serious action on debt rules and directs EU funding towards social and public housing projects, while empowering local authorities.
Local leaders, including Barcelona Mayor Jaume Collboni, are closely monitoring the summit. Collboni, one of 19 politicians from major EU cities who signed an open letter urging more EU action, stated that cities expect a clear mandate for the Commission to develop an Affordable Housing Plan that includes agile funding, regulatory tools, and decision-making capacity for urban centers.
Outlook for EU Housing Policy
The European Council’s decision to address the housing crisis marks a pivotal moment for EU policy, shifting from a long-held stance of non-intervention. While the move signals a united front among EU institutions, the path forward is complex, with potential disagreements among national leaders on the extent and nature of EU involvement. The outcome of these high-level discussions will determine the EU’s capacity to deliver a cohesive response to a crisis increasingly seen as vital for social stability and democratic trust.
