Europe’s worsening housing cost crisis has reached a level that city leaders across the continent are describing as akin to a “new pandemic,” with the mayor of Barcelona warning that sustained price surges in property and rents are undermining social cohesion, democratic values and economic stability. Jaume Collboni, who leads Barcelona and spearheads a coalition of mayors from some of Europe’s largest cities, made his comments as he and fellow city officials urged the European Union to deploy unprecedented financial resources to address what they call a deepening crisis that now affects millions across the bloc.
In a concerted appeal to Brussels, Collboni and leaders representing more than 20 million residents from cities including Paris, Rome, Amsterdam, Budapest and Dublin called for the establishment of a comprehensive European Affordable Housing Fund modelled on the scale and ambition of the Covid-19 NextGenerationEU recovery programme. Their proposal envisages mobilising at least €300 billion a year in combined public and private investment to build new affordable housing, renovate existing units and ensure adequate support services are in place to protect households struggling with spiralling costs.
The call for massive funding comes as housing costs have soared across the EU over the past decade. Official data show average house prices climbed by nearly 50 per cent between 2010 and 2023, while rents rose by more than 20 per cent over the same period, leaving many families and young people spending an ever-larger share of their income on shelter. In some member states, households now spend a crippling proportion of their disposable income on housing, with some urban residents devoting more than 40 per cent to rent or mortgage payments.
Collboni framed the crisis as an exceptional challenge that goes beyond market fluctuations, likening it to a public health emergency that demands a coordinated, Europe-wide policy response. He warned that if the EU fails to act decisively, disillusionment with democratic institutions could grow, feeding political extremism and social fragmentation as working families find themselves priced out of their cities. “The new pandemic affecting European cities is called the cost of housing,” he said, underlining the urgency of substantial financial intervention and policy innovation at the EU level.
While the European Commission is preparing to unveil its first comprehensive housing strategy after months of consultation with experts, stakeholders and the public, the proposed approach suggests a cautious balance between supporting national housing policies and avoiding overarching EU control of housing markets. Brussels has signalled its intent to back member states’ efforts to tackle affordability challenges, but has stopped short of endorsing a centralised fund or EU-wide rent caps, which some national governments fear could overstep legal and political boundaries. Critics argue this risks diluting the scale of support needed to meaningfully address inequalities in the most affected urban areas.
Municipal leaders argue that cities, which are closest to residents and most directly impacted by housing shortages and displacement pressures, should play a central role in crafting and managing funding mechanisms. They also point to recent financial initiatives such as a €113 million agreement between the European Investment Bank and the Barcelona City Council to develop hundreds of social and energy-efficient rental homes as examples of how coordinated investment can produce tangible results. These efforts are part of a broader push to integrate sustainable housing solutions into EU climate and social inclusion goals.
As discussions continue in Brussels and across EU institutions, the growing consensus among city leaders, researchers and policy makers is that Europe’s housing emergency will require far more than incremental measures if it is to avert deepening inequality and long-term social strain across the Union.
