Austrian Federal Chamber of Labour
2025
Austrian Federal Chamber of Labour and others
The housing crisis in Europe has become a focal point for the EU, especially with the appointment of a dedicated Commissioner to address this pressing issue. Ursula von der Leyen's commitment aims to elevate housing concerns to a high political level, yet many proposed solutions remain vague and lack a comprehensive social dimension. As inflation continues to rise, the problem intensifies, with many citizens struggling to afford basic living costs as housing prices soar. To tackle these challenges, the EU's new housing policy emphasizes investment in affordable and sustainable housing. A pan-European investment platform is set to mobilize both private and public resources. However, concerns about the EU's limited regulatory power over housing policies complicate the implementation of these plans. Additionally, the construction industry faces labor shortages and a need for better working conditions, which hampers the ambitious housing agenda. Trade unions have taken a firm stance, advocating for a more regulated housing market to counteract financialization and speculation. They argue that the crisis stems not just from supply and demand but from insufficient state intervention. As homelessness continues to rise, especially among vulnerable populations, a holistic approach is necessary, prioritizing preventative measures such as the Housing First model that has shown success in countries like Finland. To effectively combat the housing crisis, the revival of public and social housing is essential. The EU must support national initiatives and share best practices among member states to create a sustainable solution that ensures decent housing for all.
Europe's housing crisis has arrived on the EU policy agenda. With the appointment of an EU Commissioner responsible for this issue, Ursula von der Leyen wants the problem to be dealt with at the highest political level. However, many of the measures announced still seem rather vague, and overall the social dimension does not yet appear to be fully developed. Civil society and trade unions have many ideas on how housing can be organised in a more socially just way. The European Trade Union Institute (ETUI) recently held a conference on this subject. What approaches are currently being discussed?
Not least due to the inflation crisis of recent years, housing has become one of the biggest problems for many of Europe’s citizens. Rents and property prices have been rising continuously for some time, with wages and salaries unable to keep up with this development. As a result, increasingly more people have to spend an ever-larger proportion of their monthly income on rent payments – money they can’t spent on other necessities. According to a recent Eurobarometer survey, rising living costs were also the key motive for voting in the 2024 European elections. Von der Leyen has now responded to this in her Political Guidelines and upgraded housing to a separate policy area for the EU Commission. As EU Commissioner for Energy and Housing, Dan Jørgensen’s task is to find a European response to the new housing question. But how can this be achieved if housing policy is not actually an EU competency?
The EU Commission's plans At the heart of the new European housing policy is the first European plan for affordable housing. A key element of this plan is investment in affordable and sustainable housing. In order to mobilise sufficient financial resources, the establishment of a pan-European investment platform is planned in cooperation with the EIB, which should attract private and public investment. One key area is de-risking, but the associated distribution effects have not yet been addressed. In addition, cohesion funding for affordable housing is to be doubled and the rules for state aid for housing projects are to be relaxed to enable higher public investment. However, it remains unclear how Member States are to provide the necessary (co-)financing when the scope for it is severely limited by restrictive EU fiscal rules.
The new EU housing policy is not only aimed at creating new living space, but also at making better use of existing living space. In addition to a strategy for housing construction, the issue of people being priced out of their homes by short-term rentals à la Airbnb must also be addressed. The recently adopted legislation in this area is primarily intended to collect data, and now further measures are to be considered on this basis.
A problem child: the building industry A major problem for the EU's ambitious plans is the shortage of labour in the European construction sector. A revival of the construction industry requires high-quality and attractive jobs. This is in stark contrast to the currently prevailing business model, which is based on cheap, flexible and precarious labour, i.e. on exploitation. What is needed is collective bargaining, strong social security and, above all, an end to the often opaque chain of subcontracting. The inclusion of social and environmental citeria in public procurement could achieve a great deal. In practice, public clients often opt for the tender with the lowest price, as they fear becoming adverse legal consequences if they give greater weight to social and environmental factors, for example. This creates enormous price pressure, which, combined with a lack of transparency, makes the construction sector particularly prone to fraud. Changing the procurement rules could be an important lever for transforming the sector.
Trade union positions The European Trade Union Confederation (ETUC) has also addressed the housing crisis and adopted a comprehensive resolution in October this year. It not only addresses the rising cost of housing, but also the lack of housing quality for many people. However, the trade union sees the main cause of the housing crisis not so much in the disproportion between supply and demand as in the financialisaton of the housing market. There is no lack of (private) investment, but it is insufficiently regulated. Therefore, renouncing the mantra ‘more private - less state activity’ is required, the symptoms of which also include privatisation, deregulation and real estate speculation. In addition, an end to austerity policy could create the necessary state investment capacities to provide sufficient affordable housing for all in good quality and with high-quality jobs in the construction sector.
The problem of homelessness The tense situation on the housing market is making itself felt in many areas of society, but most of all among particularly vulnerable groups. According to recent surveys, more than one million people in Europe are affected by homelessness, including around 400,000 children. The reasons for homelessness are multiple, often involving a combination of circumstances. A home alone cannot usually solve the complex problem, but it is usually a necessary prerequisite. Preventing eviction and securing housing are therefore the most important tools in the fight against homelessness. What is needed is a holistic approach that begins with the provision of housing: Housing First, as has been successfully implemented in Finland, among other, for many years. The issue of homelessness is also receiving increasing attention at EU level, with the EPOCH Programme specifically promoting the exchange of best practices between Member States. The topic is also becoming relevant due to the new EU Commission's focus on housing. The recognition of particularly vulnerable groups and the inclusion of the Housing First approach in the European plan for affordable housing could be important levers. The free market cannot provide housing for people on the brink of homelessness.
Further measures to combat the housing crisis A revival of public or social housing on a larger scale appears necessary, not only to combat homelessness. The European Economic and Social Committee (EESC) has also recently recommended supporting appropriate national initiatives and promoting the exchange of best practices between Member States. As recommended by the OECD, the Austrian model of non-profit housing could serve as a role model. This is because in many regions of Europe, the housing shortage is not caused by a lack of investment, but by speculative construction that does not meet demand. We therefore need rules that prevent speculation and tie funds to the provision of affordable housing – and measures to mobilise existing vacancies. Against this background, it is to be welcomed that the newly established Special Committee on Housing in the European Parliament is reportedly to present a report assessing Member States' housing policies and addressing issues related to the fight against property speculation and possible reforms.
Further information AK EUROPA: Political Guidelines for the next EU Commission 2024 - 2029. The right answers to current challenges? Euractiv: Centrists agree competency carve-out on new Parliament committees EU Commission: Mission Letter Dan Jørgensen EESC: EESC recommendations for sustainable, affordable and decent housing ETUC: The right to adequate, decent and affordable housing ETUI: Social policy in the European Union – state of play 2023 ETUI: A new momentum for affordable housing in the EU? EFBWW: Stop exploitation in subcontracting chains! Campaign FEANTSA: 9th Overview of Housing Exclusion in Europe 2024