Brussels has rolled out an unprecedented plan aimed at tackling one of the European Union’s most pressing social challenges — an escalating housing crisis that has left millions struggling to find affordable homes and driven homelessness to record levels. The European Commission, under growing pressure from lawmakers, city officials and social advocates, presented its first-ever bloc-wide housing strategy this week in a bid to boost construction, address steep price rises and regulate disruptive market forces.
The plan unveiled by EU officials acknowledges the stark reality facing citizens across the 27-nation bloc. Over the past decade and a half, housing costs have soared far beyond wage growth, with property prices rising by more than 60 per cent and average rents climbing upwards of 20 per cent, according to Commission data. Meanwhile, nearly 1.3 million people are estimated to be without stable shelter — a figure larger than the entire population of some European capitals. This has transformed housing into not just an economic issue but a profound social crisis affecting labour mobility, family formation and overall quality of life.
At the heart of the EU’s approach is a multi-faceted strategy that seeks to increase the supply of affordable and decent homes, strengthen legal frameworks to empower local authorities, and curb market practices that drive up costs. A key proposal includes new legislation targeting short-term rental platforms such as Airbnb and Booking.com, which many cities blame for removing long-term housing stock from the market and inflating rents in popular tourist destinations. The measures under consideration could allow municipalities to cap the number of nights properties can be rented out, or enact other controls tailored to local markets.
Boosting construction is another central pillar of the plan. The Commission estimates that at least 1.6 million new dwellings need to be built annually to address shortages, far exceeding current construction rates. To support this, Brussels intends to tackle regulatory bottlenecks that slow planning processes, expand apprenticeship programmes to address labour shortages in the construction sector, and ease certain environmental rules that can delay building permits, all while encouraging public investment and mobilising private capital. EU officials believe a combined effort could channel up to €375 billion into housing projects by 2029.
The strategy also calls for revising state aid rules that currently limit government support for affordable housing. Under proposed changes, member states would be able to deploy funding more flexibly for social and affordable housing projects without lengthy approval procedures. This is intended to unlock public financing and stimulate broader investment in communities that have seen inadequate housing development.
The European Investment Bank (EIB) has already signalled its commitment to the initiative, announcing plans to double financing for affordable and sustainable housing to €6 billion by 2026. This funding boost will support not only new construction but also innovation in building technologies and the renovation of existing housing stock to improve energy efficiency and living standards.
While the plan has been welcomed by many city leaders and advocacy groups who see it as long overdue, some critics caution that the measures must be backed by concrete implementation at local and national levels to truly make an impact. Housing policy traditionally falls within the remit of individual member states, meaning that the EU’s role is largely about coordination, incentives and support rather than direct control. Nonetheless, officials maintain that the strategy represents a significant step toward addressing housing affordability, scarcity and quality concerns across Europe.
As the European Parliament and Council begin deliberations on specific legislative elements of the plan, the coming months will be closely watched by residents, policymakers and housing market stakeholders across the Union.
