Policy Voices | Addressing the housing crisis: local solutions for a European problem?

📺 Video Information

**Published:** May 2, 2025

📝 Description

It is not a new problem but the housing crisis has gotten bad enough that the European Commission created a Housing Task Force and, in the European Parliament, the Special Committee on the Housing Crisis in the EU was born. In simple economic terms: there is too much demand and not enough supply. At least not enough supply to meet the demands of lower and middle income groups.

Hotels, Airbnb, digital nomads, and golden visas have made the situation worse. What seemed like a sound economic policy back then ended up working too well and backfired in the faces of locals searching for affordable housing.

In this episode of Policy Voices, host Catarina Vila Nova sits down with Irene Tinagli to address the housing crisis in the European Union. An economist by training, Tinagli is a Member of the European Parliament where she chairs the Special Committee on the Housing Crisis in the EU. Catarina asked her how bad the housing crisis is in Europe, how did we get here, and what is being done to fix this problem.

If you want to comment on this episode you can send us an e-mail: press@friendsofeurope.org

-------------------------------------------------------------- Subscribe! ► http://bit.ly/2n5HBDp

Connect. Debate. Change. Website: http://www.friendsofeurope.org/ Twitter:   / friendsofeurope   LinkedIn:   / friends-of-europe   Instagram:   / friendsofeurope   Facebook:   / friendsofeurope.foe

📹 Video Transcript

[0:00] [Music] we need to start thinking that housing is an important essential part of welfare we need to rethink a little bit our welfare policies and include housing for those who are really in need and cannot afford housing anymore because housing it is an essential part of welfare and personal development and you cannot have easy access to health care or education if you don't have a safe place to live in it is not a new problem

[0:34] but the housing crisis has gotten bad enough that the European Commission created the housing task force and in the European Parliament a special committee on the housing crisis in the EU was born in simple economic terms there is too much demand and not enough supply at least not enough supply to meet the demands of lower and middle inome groups hotels Airbnb digital nomads and golden visas have made the situation worse what seemed like a sound economic policy back then ended up working too well and backfired in the faces of locals searching for affordable

[1:09] housing it's difficult at the beginning to foresee how successful the measure will be and also to to to foreseen the fact that sometimes when the measure is too successful it ends up having very negative consequences on on local communities so I think it is probably what happened so policy makers at the time they couldn't foreseen uh the uh 100% type of impact not only positive but also negative one milan and Italy stands as a case in point i said is

[1:41] Milan we adopted a special fiscal treatment for people coming from abroad so if they move to Milan they they buy a property they can pay very low taxes and live in a very lively vibrant European city and then that's what happened the very center of the city which is not that huge and has a limited amount of uh properties uh was affected uh by the repatriation of hundreds and hundreds of extremely rich people that uh tended to uh offer even higher prices than were

[2:14] listed in the markets from friends of Europe this is Policy Voices i'm Katina Villanova if you haven't already please take a moment now to subscribe to Friends of Europe's podcast wherever you're listening to this now to never miss an episode of Policy Voices today on the show addressing the housing crisis local solutions for European problem my guest today is Tinali an economist by training ena is a member of the European Parliament where she chairs the special committee on the housing crisis in the EU i asked her how bad the housing crisis is in Europe how did we

[2:46] get here and what is being done to fix this problem here's my conversation within any person that has tried to either buy or rent a house anywhere in Europe has been faced with the issue that prices are just too high for their pockets it does not seem to be a brand new issue uh since housing has always uh represented a very high percentage uh of people's incomes but the situation it feels like it's getting worse and worse

[3:19] so much so that uh a commission has established the housing task force and there is also a special committee on the housing crisis in European parliament uh which you lead um but just to get the conversation started and one of your uh main tasks is to actually map the housing crisis in Europe how bad is the situation that we're all facing the situation is pretty bad but not in a uniform way so it has gotten worse in

[3:51] most of the European cities uh in general the largest cities are the ones that uh are worse off but also some uh middle cities are seeing this sharp increase both in the uh selling prices but also in rentals so this has become pretty widespread uh across the European Union but it is localized so at the same time there might be uh smaller cities for example where the uh population is

[4:26] fleeing away and where the prices are actually dropping so it's very difficult to uh to have uh average numbers that give a clear picture because it's very localized in certain cities but it is true that the number of cities where the affordability is becoming a problem has increased dramatically and that the increase is exceptionally sharp and fast so it happened particularly after the covid so as you said it's true that the

[4:57] um houses um prices have been increasing also uh in general in the past 101 15 years but after the covid crisis this increase has been particularly sharp and fast and concentrated in very in just few years but so is there something specifically about housing housing prices both rental but also people want to buy properties um that increased sharply compared to other essential goods do we just feel it more because it already represents such a high portion

[5:30] of people's income uh than if you want to buy bread or eggs um or did housing prices specifically rose much more uh than other aspects of the economy okay there are several factors that affected this sharp increase in prices uh uh one of these is that all the prices went up after the COVID especially construction prices due to uh problems in uh uh

[6:01] logistics supply chain raw materials energy costs everything went up and so this pushed also up uh the prices uh there was also something related to the demand so the demand increased a lot uh which was something that not everybody foreseen because actually during the covid many people thought that people would uh fly away from the city to buy houses where they had bigger spaces but this actually didn't happen so the

[6:33] demand of cities maybe what happened is that people wanted to buy different houses bigger houses maybe with the terrace so this increased a little bit the the market they make it make it a little you know more heated uh but the demand was very high another thing is that what we saw in the past few years is also a sharp increase in the use of residential houses for different purposes for example use of houses for

[7:05] touristic uh activities so with the short-term rentals uh which are more focused on the tourism market rather than the residential market um and this put a lot of pressure because as said if it's true that there could be there are other goods uh we didn't see that kind of increase because if there is an increase in demand of a certain good which can be uh increased in the production very easily then that we have

[7:36] a new equilibrium but in houses it's much more difficult it takes many many years to increase the supply of houses to face an increase of demand so all of these put a lot of uh pressure on the market and uh had you know this consequence of prices going up very very quickly both in in prices and in rentals i was waiting for the moment that you were going to address the elephant in the room an elephant that it's not that small of tourism and uh I love the way

[8:09] you put it that of housing being used not for uh for the purpose of uh of of housing but also for for tourism i mean you are from Italy i'm a Portuguese living in Spain our countries have been faced with over tourism for years now and of course you mentioned that it is the major cities that are facing the facing the worst housing crisis um and we have seen some cities across Europe Paris Vienna Florence Rome Barcelona Amsterdam just to name a few that are either restricting or putting very

[8:43] strict barriers to shortterm accommodation rentals you know Airbnbs and so on did cities wake up too late uh for the to the extent that Airbnbs and other such platforms are contributing to the to the housing crisis well you know cities uh woke up late in the sense that the at the beginning many thought that this could be an opportunity and indeed it has been an opportunity for uh especially the smaller cities that had the opportunity

[9:19] uh to increase their attractiveness and their tourism those were cities where probably uh there wouldn't have been in big investments in hotels or resorts but with a little bit of Airbnbs and short-term rentals they could uh uh become uh a place where some tourists would go uh so probably at the beginning the impact on residential market had been underestimated for this reason because there were other positive uh uh

[9:49] aspects of this phenomena uh and then of course it has become a little bit up out of control it also has to be said that we always think in terms of cities that should do something and look at those cities that uh have done or not done uh something uh but the problem is that there probably should be a a how can I say a bigger framework uh so at the national level that would give these cities the instruments to act it's very difficult for a city to intervene alone uh with any sort of

[10:24] restriction if all the neighbors cities or the cities in in in other places in the country are not doing that so these are not popular things to do um because of course owners of the apartments that are renting are not happy if you put restrictions uh uh trade association might not be happy because if you they may may be afraid of impact on tourism and then if you have uh nearby cities that are not putting these restrictions of course you face an unlevel playing

[10:57] competition so uh it would be always good not to leave the cities entirely alone and try to have a framework of course with enough flexibility because as I said earlier you can't have the same rules for all the places because not all the places face the same challenges the same pressure the same problems so it is important to have some flexibility um and to make sure that only cities that are facing this pressure uh will uh may adopt some form of restrictions but

[11:30] still the fact that um uh there haven't been any attention to this issue also at the national or European level has left many cities alone and they tended to delay the moment of intervention so it clearly seems that this is the space uh for the youth to act and we'll get into that but while we are on this topic of um houses being used for short-term accommodation rentals or even hostels and hosts another phenomenon that came uh specifically during COVID is that everyone went to work at home and a new

[12:06] uh a new phenomenon of digital nomads showed up um and it feels at least again I'm I'm from Portugal and it feels that Lisbon has just been inundated with digital nomads many of them even outside outside of the EU and it does feel that they are increasing the housing housing prices not so much for buying property but for for rentals one year two year rent renting rental contracts how much did this phenomenon uh contribute to the housing crisis uh

[12:41] does it truly have an impact on on the big cities or is is it just easy to put the the blame on someone well we don't have an analysis that is capable of isolating the impact of one specific policy or one specific phenomena so it's not easy to uh identify the amount of impact that is uh associated to a phenomena like digital nomads or for example

[13:12] um even golden visas which is a different thing uh for according to some experts they might have played a role so I think in terms you mentioned the Portugal Portugal is also a country that not really golden visas but for example the fiscal uh treatment favorable treatment to attract retired people from all over Europe of course if you attract a German retired person or an English one they might have a purchasing power which is very much higher compared to a

[13:48] Portuguese uh native and this in the long run tends to push the prices uh h up uh but other countries uh have heard these policies of golden visas and um so my city is Milan and we don't have a real golden visas but we adopted a special fiscal treatment for people coming from abroad uh which was very favorable so if they move to Milan they they they buy a property they can pay very low taxes and live in a very lively vibrant European city and and and and

[14:22] that's what happened so uh the the the very center of the of the city which is not that huge and has a limited amount of uh uh of uh properties uh was affected uh by the repatriation of hundreds and hundreds of extremely rich people that uh uh tended to uh offer even higher prices than what what were listed in the market so um but of course it's difficult to isolate this impact so it it is one of the many factors that have affected uh the uh the market so

[15:00] what what we are trying to do is also to have a global picture of all the possible policies all the possible factors that may have had uh a a negative impact on the prices and see if there can be something that can be done uh to you know mitigate this negative impact you are an economist by training so can you explain what was the economic rationale behind policies such as golden

[15:32] visas fiscal incentives or even uh vis digital nomads visas that in a nutshell what they are doing is uh allowing very wealthy people that otherwise would not have either the incentive or even the legal rights to reside in this countries what good would something like this bring to local communities well uh there is a these are fiscal measures so taxation measures that uh what they bring is that they bring money

[16:05] because even if they don't pay that many taxes as the locals but these are people that previously were not living there so they were not bringing any taxation money so the moment that they come in they bring this uh uh additional revenues for the normally for the country not so much for the local communities but they also bring uh consumption for example so the idea the economic rational for these measures is that if we bring in these richer people

[16:37] uh they will support the local market because these people will go out eat at the restaurants uh uh go to the stores uh uh buy clothes buy you know uh go to the theaters to the movies and also bring some revenues to the uh public uh you know uh sector so there was there is a an economic rational behind this and probably uh there are regions and cities that before these uh policies were

[17:12] poorer and they had trouble in attracting investments and after these policies they started to become more attractive also for foreign investments in general so uh they started out with a few people then they started out attracting some investments in restaurants some investments in hotels so I I don't think we can you know say that everything was negative or that there was no economic rational because there was uh the problem is that it's

[17:45] it's difficult at the beginning to foreen how successful the measure will be and also to to foresee the fact that sometimes when the measure is too successful it ends up having very negative consequences on on local communities so I think it is probably what happened so policy makers at the time they couldn't foreseen uh the uh 100% type of impact not only positive but also negative one so but um it's

[18:16] never too late to try to intervene and rectify what uh has proven in the long run to have also negative effects so I don't know i know it's not that easy but we can start trying to to intervene a little bit to uh make the market function a little bit better because that's what happened that in the end the market started to derail a little bit it's I don't think I've ever heard of a policy that backfired because of how

[18:47] successful it was implemented or it worked out um so great that you said that it's uh it's time to turn all this around and the committee that you chair is responsible among other things of course for analyzing existing policies across the European Union uh to solve housing crisis or to address the housing crisis so far have you seen any policies that are that shown promise in addressing the housing crisis everyone was is waiting to hear what you uncovered we are still working on that so this is

[19:22] the purpose of the committee so we started uh our work in in uh in February so it's just a couple of months so we've had several hearings uh we will start also um to have missions and visits we will start on at the end of May our first city that we will visit is Barcelona and Barcelona for example Barcelona and Catalunia are very interesting case because h they are among the first to implement quite restrictive measures especially for

[19:54] example on short-term rentals because of of course that's an area Barcelona that was very much affected uh by short-term rentals uh and so they adopted uh pretty strict measures and this is also the probably the the only case where this was accompanied by a national law because Spain uh two years ago passed the leopenda lea see the lay of houses

[20:25] um which provided for a framework as I said uh so it gave the instrument and the opportunities uh to local communities regional governments and cities to uh put some sort of restrictions to the amount of uh rental prices and um and Catalonia uh was the one of the few if not the only uh regions that uh applied fully applied this law and the recent data that uh uh I have seen shows that this has had an

[21:03] impact on the prices of rentals which have gone down for the first time in a long time uh by about 3% in in the region and up to 6% in Barcelona in the city now so it seems to be promising but of course we need to be very careful and evaluate all the possible impacts on all the aspects because as I said earlier sometimes there are policies that may have a positive impact on what at the

[21:35] beginning we want to achieve so the golden visas wanted to achieve to attract rich people and increase consumption and the economy in this case the impact the desired impact was to lower the average uh rentals uh but then of course there are some of the more critics that says this is um uh decreasing the supply so it's having a a positive impact on reducing the price of rentals but it could have a negative

[22:05] impact on the supply what does it mean it means that um people that wanted to rent uh their apartments are discouraged by the uh the rent control uh the the limits and may decide not to rent apartments anymore so this reduces the amount of uh apartments that are available for rental so uh we we it's still very early on i have to be honest i think it it takes more years to fully

[22:38] understand uh the complete uh uh impact of an application of a policy like that so uh but this is the purpose of our analysis to to see uh what are the uh the effects what are the policies that we could uh adopt however just to be complete it's not just about policies in limiting uh uh you know putting regulations no we can also have policies that trying to increase supply by uh to

[23:11] how can I say providing uh uh new possibilities to build or to use uh existing uh buildings that are empty and to dedicate this uh new buildings or old businesses that are renovated to what to those people who really need it so to increase the supply targeted to people that are in real needs so to alleviate the problems on those who are suffering the most from the problem because of course we also have to be very honest

[23:42] not all the people are suffering in the same way from this increase in prices so public policy should start by focusing on those that are suffering the most uh for this problem that would take the shape or form of the so-called social housing correct yes and a very tricky line to to walk on when we talk about uh the housing crisis is the rights to private property versus the rights to adequate housing so for

[24:14] example let's say I'm uh um I I own a house in Barcelona what kind of incentive would I have to just rent a house to a local that perhaps can only pay me let's say €1,000 per month when I can just rent that on Airbnb and make three or four or five times that amount of money uh so how how far can governments go in addressing the housing crisis when at the end we're talking about private property how how do you thread this line of course nobody wants

[24:49] to limit the right to private property uh but like in every market in every human activity there are some rules that uh prevent this private activity to have negative spillovers on society so here we are not talking about uh taking away the private property of a person but only trying to see to uh the use of this property it's like an activity that you do with that it's like an activity if you have an enterprise a company a

[25:25] factory for example uh of course you have the full freedom to have your own factory but you have certain rules you have certain rules on how you manage your waste on how you uh you know to make sure that you don't pollute the environment that your activity do not create problems to the community where your activity is taking place so the moment that you decide that your property you are not going to use this property for residential purposes but you are using it for commercial purposes

[25:58] i think it's uh you know something in line with the market economy if the government decides that there are some rules on how this commercial use can take place so this entails policies like taxation or other sorts of uh uh regulation so uh and this is of course is at the discretion of a national government to decide if and how they want to regulate a commercial activity so um uh but and it has nothing to do with limiting the private property

[26:34] because nobody takes away that house from you i mean there's this uh no no way uh that that you can do that but simply to to to to regulate and to decide uh how you want to incentivize or or regulate that type of commercial activity so I think this is uh perfectly you know legitimate uh and this is something that actually some countries are starting to do or to think about doing so for example by putting different taxation whether you decide to rent this apartment uh uh with a

[27:11] controlled price uh to a couple or not to a couple but to a regular you know citizens or if you want to use this for a commercial property and then you have a different or if you if you want to put it on Airbnb you have a different type of taxation so many countries are already using these different tools and this is how you can balance the right of private property but also a correct use in a commercial way so that's that's very clear on how that those kinds of policies would address um the short-term accommodation rentals but what about the fact that

[27:47] locals are being priced out by let's say the digital nomads um could policy go as far as to say that uh landlords need to give preference to locals or nationals than than foreigners or would we enter the realm of discrimination if such a policy would be put in place yeah I'm afraid this would be uh discriminating especially when it comes to uh citizens of the European Union uh so I don't think those could be uh you

[28:22] know viable options uh for uh for policy making uh but as I said there could be uh different leverage that we could use uh to incentivize uh the you know renting to to specific categories for example so uh or if not to categories which is always a little bit difficult but for example uh to people above and below certain threshold of income to make sure that also the less the less affluent have access to affordable

[28:59] housing so uh these are all things that can be used and are used in some communities and finally uh the tricky question of given that the European Union has no competence to legislate on housing matters how far can the EU go in addressing the housing crisis well the the EU for example has competencies in internal markets and everything that entails for example to Airbnb platforms and how they are used uh these are European competencies and indeed we

[29:35] passed uh a a regulation not too long ago on transparencies and information uh regarding the short-term rentals platform which is actually now proving quite useful in collecting data information so uh transparency is a is an important tool and I think we could probably also work on that uh to uh to do something uh even more effective uh so that is one another area where European Union has exclusive competence

[30:08] is state aid rules so we mentioned earlier how important it is also to have projects for social housing for you know provide increasing the supply of affordable housing for those in need and sometimes these kinds of projects uh uh clashes with uh state rules that are set at the European level so we are already discussing whether we could u uh give more flexibility in state rules to allow uh to allow regions and countries to be more effective in providing social housing uh another um avenue another

[30:46] field of work for the European Union is giving providing funds or financial instruments to support projects like these so we need to start thinking that housing is an important essential part of welfare we pride ourselves as Europeans to be a continent that takes care of the need of people and does not leave anyone behind and we've done it very effectively when it comes to health care and education because we always thought that healthcare education are two important pillars for the welfare

[31:21] and the safety of people and their de personal development we also took care of housing not in this European Union but as a national governments early after uh soon after the second world war many countries had in place very effective uh housing policies providing houses for the most vulnerable ones but then over the years especially after the 80s and 90s uh when the communities were more affluent we thought that you know each person could provide for housing by himself and be and we just had to focus

[31:58] on health care and education i think that now we need to rethink a little bit our welfare policies and include housing for those who are really in need and cannot afford housing anymore because housing it is an essential part of welfare and personal development and you cannot have easy access to health care or education if you don't have a safe place to live in i think this is pretty obvious but sometimes it's important to restate the obvious absolutely uh I think that's a

[32:33] great way to end the conversation and you clearly have your hands full for the next years in solving the housing crisis you have only an entire continent uh hoping that things will get better so absolutely no pressure thank you so much for your time today thank you Katarina thank you very much and that's it for today's show i'm Katina Villanov and Policy Voices will be back again next week until then goodbye

AboutPressCopyrightContact usCreatorsAdvertiseDevelopersTermsPrivacyPolicy & SafetyHow YouTube worksTest new featuresNFL Sunday Ticket© 2025 Google LLC