What's causing Europe's housing crisis?

📺 Video Information

**Channel:** Roundtable • **Published:** Apr 6, 2024 • **Views:** 7,331 • **Duration:** 26:00

📝 Description

The high cost of living and increase in house prices across Europe has left many lower income households struggling to make ends meet.

This at the same time as rental prices are soaring. For the first time in decades, younger generations could have fewer opportunities than their parents.

Who can still afford to live in some of the world’s most expensive cities? And why is the housing situation so bad?

Our guests for this show:

Sorcha Edwards Secretary General of Housing Europe

Manjinder Kaur Atwal Director of Housing and Property Litigation at Duncan Lewis Solicitors

Rory Hearne Associate Professor in Social Policy in Maynooth University and author of “Gaffs: Why no-one can get a house''

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📹 Video Transcript

[0:00] The Soaring cost of housing has placed home ownership Out Of Reach for many cities across Europe this at the same time as rental prices are soaring who can still afford to live in some of the world's most expensive [Music] areas

[0:31] hello and welcome to Round Table I'm Ender Brady the High Cost of Living and increase in house prices across Europe has left many lower income households struggling to make ends meet for the first time in decades younger Generations could have fewer opportunities than their parents so why is the housing situation so bad tens of thousands have been taking to the streets of Lisbon for more than a year now Furious over soaring rents and hous prices in the Portuguese

[1:02] Capital we're here to say the government's measures don't convince us and there's a huge housing crisis today this is a social emergency and the government seems to remain unaware salary Which is higher than the average salary in Lisbon I cannot afford on renting a flat because it's too [Music] expensive those on lower income are being priced out altogether some on the

[1:32] lowest wages including many foreign workers have resorted to living in tents on the outskirts of the city over in Prague capital of the Czech Republic the disconnect between housing prices and local salaries coupled with a hike in energy costs has left many having to choose between paying the rent and staying warm that's if they can afford to stay in the city at all if you think of essential employees such as teachers policemen firefighters

[2:03] they're probably unable to afford any kind of apartment in prag nowaday a hike in interest rates has slowed down Rising house prices but has also meant steeper mortgages across the EU and with rents still going up and the shortage of housing stock still [Music] unresolved will many young Europeans and prospective firsttime buyers remain locked out of the housing market for years to

[2:34] come well let's meet our guests in London maender Atwal is director of Housing and property litigation at Duncan Lewis solicitors in Dublin Rory Hearn is associate professor in social policy that's at mayth University and he is the author of gaffs why no one can get a house and in Brussels sorca Edwards who is the Secretary General of housing Europe sorca I'll come to you first are we now at a stage in Europe where for many young people affordable housing getting on the property ladder

[3:06] it's basically a dream that's not going to happen it's indeed if we just look at one indicator and that is the house prices and see how much they've risen even just since 2010 so I'm just looking at my notes Here 50% higher in Q3 of 2023 than in 2010 and if you take into account that we are now facing what many describe as a perfect storm in a huge slowdown in delivery of new homes and

[3:38] that's across all sector so also in the social housing sector um we see that indeed particularly in places where young people want to live because they can access you know training um education and transport services um facilities um the prices are just really over and above what people can afford and way out of line with with income but of course what what we would like the dream that we would like to see is that um access to home ownership is

[4:11] just one choice of many so we would like to see um um sufficient supply of decent public social cooperative and limited profit housing so that um people are actually choosing to live and uh in the long term and rent in the long long term in in public accommodation and social housing and we see that the countries that are performing best I mean there's no perfect country at the moment but the the countries that are performing best

[4:41] are actually those that offer good quality uh limited profit public or social housing and people actually make that choice because they've got security of tenure they've got affordability and they've got quality so indeed perhaps this dream we are talking about um young people are not going to dream of this elusive home ownership but in fact a more flexible and modern approach and that is decent access to secure rental ownership so this is I think we should

[5:12] also at this moment of Crisis question what what are people dreaming of and is home ownership the ultimate dream is it the best option for a a well functioning H competitive inclusive Society those stats you mentioned sorcer from your organization housing your Europe so house prices up 50% in a decade rents up 19% mender what kind of a message does this send to young people I mean life is just getting so expensive for them isn't it so much money going on rent oh

[5:45] definitely I mean in the UK I believe our housing system needs to be fundamentally rebalanced um private sector private vent sector needs to play a smaller role um what we need to do is build new homes um particularly social homes um to address the the issue of homelessness and overcrowding and deliver affordable home ownership properties um the rent is extortionate um young buyers are finding it difficult to to go on the property

[6:17] ladder as a result so people are being forced to to rent um rent properties that are probably not in good condition and and needs to be and this does need to be addressed Rory I understand you believe that home ownership should be enshrined in the constitution is that correct well not that home ownership as such no what what I believe is that the right to housing the human right to housing should be enshrined in the Constitution and essentially that is set out by the United Nations which is an

[6:50] understanding and approach to housing which is that housing should be affordable it should give security of tenure and people should be able to access and what we've seen in Ireland and I suppose in many ways Ireland is experiencing one of the worst housing crises um in you know Western Europe and if we look at rents you mentioned there 19% increasing rents have increased in the private Market by 100% in the last 10 years and we've seen for what I

[7:24] describe as generation a generation locked out of not just um being able to buy a home but even being able to rent a home and we've had this emergence of what I call generation stuck at home and these are adults who are in their 20s in their 30s who cannot move out of the parents' home and to give you an a figure on the scale of that um in 2012 there was 35% of 25 to 29 year olds living at home

[7:55] in the parental home now we're over 60% of that age group are stuck living in their parents um home they cannot have in Independence I describe it as the infantilization of a Generation Um and we're really seeing you know shocking about economic and social impacts in Ireland of this housing crisis you know schools not being able to get teachers um hospitals not being able to get nurses average income workers who in the

[8:28] past even 20 years years ago were able to buy a home now can no longer buy a home in any of the big cities or even the smaller cities so we have what I describe as a Breaking of the social contract in Ireland which used to you could mean you could either access home ownership or get social housing but now for younger Generations they can't access either Rory I saw a story in one of the Irish papers recently where Ryan a the airline bought up several houses on a new build development of of

[8:59] property in swords quite a nice suburb of Dublin I mean how much anger is there amongst young people when they see a massive Corporation company like Ryan a swooping in and buying property that really should be housing young families there is there is huge huge anger um and people really feel younger people and again you know younger I'm using that in a broad sense people in their 30s mid-30s um are really feel really really angry and just give you one example I was contacted by a woman

[9:30] who's 35 yesterday um who is living in social housing but she is living with her partner in a bedroom with the partner's brother who is in his 20s so there's three of them in that bedroom she's in her mid-30s with her partner both of them working they don't qualify for social housing they don't have enough to get a mortgage to buy a home so they're basically stuck and she is just feels absolutely hopeless and she is emblematic of a generation that I

[10:01] would argue have been abandoned in terms of the Irish government's decades failure as as sorca outlined there in terms of across Europe but particularly in Ireland that shift away from the building of social housing and from governments and States seeing social housing as being a core part of their responsibility what used to be a core part of the welfare state then was handed over to the market but in Ireland we had a particular EX extreme um marketization in the last 10 years where

[10:33] governments invited in these vulture funds real estate funds to you know recover the economy after the crash but they brought them into property and property investment and so we've seen this huge expansion of Bill to rent accommodation at rents that nobody can afford Sor give us an impression of life in Belgium what's it like for young people or anyone indeed trying to get on the property ladder are you seeing similar challenges is I I appreciate Ireland's probably at the extreme end of the scale but what's it like in

[11:06] Belgium well actually we're we're really focused on the pan European um Point here and I'd like to just actually really bring home that that point that Rory just made and the fact that governments have been abandoning investment in social housing and I think what illustrates it quite well is that if we look at the 19 billion has been invested in so-called capital investment um just be between 2021 and 2022 and if we compare the same figure so so pay

[11:37] governments paying for people to pay play Stay in private rental accommodation that figures 44 billion so we see that the the mistakes that have been made so the Slowdown and delivery of social housing that we also see um a severe lack here in Belgium with um half of the city of Brussels actually eligible for social housing and only 6% of people actually being in social housing um so you have um more people on the waiting list than you actually have in social housing in Belgium and and

[12:07] growing prices and growing interest also coming from investors um but would also like to to bring up that the point that we REM made about the social cost of this so we see now in Europe 46% of people living in rental accommodation uh fear the are the risk of losing their home for economic reasons and so we see that we hear the social cost of that about an individual story of that 35y old woman however what is

[12:37] the hidden social cost of those 4 46% of people who are actually living in fear of losing their home with no potentially no other option but actually closer to the our daily activities here in Eisen Europe we're looking also at the political cost so what will be the political impact of this fear that that people are living in this um the fact that such a basic need has become out of

[13:09] um out become completely unaffordable for so many so such a big proportion of the population and what will the political Fallout of that be coming up in the the local and European elections that we are going to see this year mender in the UK am I right in thinking that the phrase social housing if you speak speak to people in Britain certainly at the political class level it's almost a dirty word it's almost a dirty phrase they don't want to engage with it they don't want to invest in it

[13:41] is that a fair assessment um I would I would agree um I with the whole um rent to buy um scheme that was was um came out was a conservative years ago these properties I think it's about 2 million properties haven't been replaced so the the lack of investment the lack of social housing or types of housing it's it's a big problem in the UK um there's so many people in

[14:11] on the homelessness register housing register with local authorities unfortunately there there are not enough um properties available um so what local authorities are doing is moving these people into private rental accommodation and landlords are are aware of the need and the demand of properties so the rent is increasing as a result um which is then becoming unaffordable to to people who are on on welfare benefits or because the welfare system hasn't hasn't

[14:43] really reflected the cost of living in in the UK and Menda you've an election coming possibly in October in the United Kingdom do you think social housing may get a look in as a a big talking point in that debate yes um the Reform Bill um well it's been spoken about for almost four years as far as I'm aware um we were promised it would come into play before the elections I don't think that's going to happen the renters Reform Bill if

[15:13] it's done correctly will give empowerment to to tenants in the UK um however it's not going to address I do not believe address the affordability issue that we have in the UK it would give tenants some power to negotiate um on on rent increases but that doesn't stop the landlords increasing the rent subject to the market the rental market um so there's always going to be a problem with affordability unless the government take control and perhaps

[15:44] reintroduce um rental controls within the UK to help adjust and balance the rental market in the UK Rory an election coming in Ireland in the next 12 months as well I see Mary L MacDonald from Shin Fain in opposition now every time she speaks she's mentioning housing and what she will do and her plans to build more and more affordable housing I mean is this likely to be the big issue in Ireland I think there's no doubt um it

[16:15] will be the big issue in the last general election in 2020 housing became the biggest issue during the election and in particular amongst younger people who voted in their 20 and 30s it was the number one issue on which they voted and people in their 50s and 60s Health was the major issue they voted on we can see now that in all the polls it shows housing is the number one concern of people unfortunately after that 20120 election um we didn't see a change in

[16:48] policy the government's housing for all policy that was launched subsequent to that um was in the middle of Co and the government at the time um in implemented a number of measures that were implemented across Europe actually at that time things like an eviction ban uh rent freeze and we actually saw homelessness fall um and rents um stabilized but of course what happened after Co was those measures were lifted and we have seen the eviction ban um the

[17:18] sorry evictions an unprecedented scale of evictions and I talk about this here and I'm still shocked at how um there's not more concern in government currently but across the system around this we are having now um last year there was 19,000 19,000 households evicted during the height of the famine in this country in the 1850s it was about 8,000 families at the height evicted and the scale of evictions that are going on and these are no fault evictions is just it's

[17:49] phenomenal and homelessness and I think what you're going to see in this election is this general election coming locals Europeans housing will be the key key issue on which people vote we're seeing as sorcus said some people similar to the Netherlands and other countries trying to turn that anger and frustration over housing onto migrants onto Asylum Seekers but most people are seeing through that and they're very much saying no we need a change in policy that will make a serious investment in Social and affordable

[18:19] housing that will tackle things like the massive issue of vacant properties Airbnb is a massive issue as well um and also particularly the whole issue of rents and tenants the lack of tenant security sorer would you like to see the European Union get more involved and maybe come out with a common policy on housing for governments to meet certain targets year on year so I think we are a long way from that now but we have taken a step in the right direction so actually the

[18:52] ministers responsible for housing took a 10-year break if you like so they didn't meet each other for 10 years um as this problem was getting worse and worse um now though so the last three years they are again sitting around the table which I think is definitely a positive sign for us and they're sending a clear signal also so under the Belgian presidency running at the moment they met in liage just a few weeks ago and they did send a common message to the EU

[19:24] recognizing that yes throughout the EU we are facing similar if not exactly the same but similar Trends around the the lack of affordable housing that is putting the social fabric but also the competitiveness of our of our industry and the commercial sector at risk so there was a there was a clear message sent there with the the backing of the of the the Belgian presidency and okay whether we want the EU stepping in here so what was

[19:55] definitely C for was a was more coherence from EU level because what what you see actually from here is that although the EU has no no competence so no clear legal compet so it's not their job uh to look at housing there quite a few of their policies do have an impact if we look at the regulation of of short-term letting for instance they do have an impact there and they've recently um brought in a directive to increase at least increase the transparency so that um the public sector does have access to information

[20:26] about how much how many short-term lets are are are active at any given time um we also have rules around coming from EU level around around state aid um but um the the key concern is is indeed this lack of coherence so different types of policy coming from EU level that have an indirect impact but we can't move away from the fact that the power here is largely local and I think Rory just outlined a couple of the policies that were brought in during

[20:57] covid what is St stopping local authorities and governments really stepping in here and realizing look this is a public good having affordable housing should be the equivalent of having Affordable Health Care affordable education and actually there are clear measures that can be taken around um new construction but also transformation of existing buildings a better use of existing um empty homes or even offices the UK is likely to see a new government at some point in the next five or six

[21:27] months labor under Kier starmer heading towards Downing Street if you believe the polls do you think labor will be better um well I'm not going to go into my political views um but I think a change in government policy I think a change in the focus on housing is essential to any government that you know does does start in the UK I think it's important that housing homelessness is addressed um um there's also been

[21:59] issues with um you know our welfare system which also needs to reflect on the cost of housing so any government that does does come to the UK is that I think that a focus on housing is is imperative um homelessness is is at at its High um you know we I mean the amount of homelesses clients that we deal with on a daily basis it's it's um it's concerning I've you know my whole career 15 years I've never seen so many

[22:30] homelesses clients that approach us for help and they range from from Young clients um to elderly to pensioners so it's definitely any government that comes in focus on housing is is imperative Rory and Ireland are shin faine onto a winner with their housing policy do you think well I think um it's a big question as to you know what is the change that you know they are offering um and you know I should declare I am

[23:03] you know a candidate as well for the social Democrats um in the upcoming European elections so um I suppose in terms of what I feel that is needed and you know it would be at some um extent similar to what Shin Fain are advocating which is um that strong shift to the state and I think it's a fundamental recognition um both ourselves and the social Democrats Antion Fain um are you know putting a cross which is completely in line with um social policy and um the

[23:36] research that myself and others have do and people like you know um sorc in housing Europe which is this fundamental idea that we need to treat housing as both a human right and a public good and that those two key aspects have been completely lost in a lot of European countries and indeed not just in Europe across the world over the last 40 years under what what we would broadly call the neoliberal or financial financialized era where we've seen this shift away from the state being responsible for key public goods um in

[24:08] contrast to the Keynesian period post World War II and it has been of disastrous consequences and one of the most disastrous areas has been in housing and this idea that somehow the market the private Market will provide housing and sufficient housing um has just been an utter utter disaster it's it's bad Theory it's bad policy um and I think that in terms of a new government in Ireland um and the opposition parties I think what the what the potential is

[24:40] that within an election by offering a real I suppose alternative as Sor used the phrase Paradigm in terms of how we understand housing and how we treat housing we can over the short medium and ultimately long term because it is going to take a long ter long time to change um our housing systems um but we need to start going in the right direction currently we're still very much going in the market dominated approach and if we continue on that road and particularly

[25:11] the financialized investor funds the crisis will continue to get worse and so we need a dramatic shift back to the State playing a central role and that means you know funding local authorities funding not for-profit housing bodies cooperatives um and providing as much housing as possible outside the market both rental and home ownership in my view as well Rory Sor and mender thank you all so much remember you can see more discussion and debate on our

[25:41] Youtube channel search for Roundtable trt world but for now from me Ander Brady and all of the team here goodbye and thank you for watching

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