Housing crisis – Modern methods of construction can be the driver of affordable housing

In an opinion adopted at its September plenary, the European Economic and Social Committee (EESC) stresses that modern construction methods can help lower housing costs and boost supply, but only if there is a convergence of innovation, quality and respect for workers’ rights and the interests of the public.

The days of the EU’s housing crisis could be numbered, with a potential solution on the horizon. This solution is modern construction methods. By drawing on their potential, the EU could lower building costs, shorten construction times and reduce carbon footprints, championing the circular economy in the construction sector. This is the strong conviction that the EESC outlines in its opinion on Making Housing Affordable – Increasing Modern Methods of Construction and Lowering Costs, adopted at its September plenary session.

Drawn up by John Comer and Thomas Kattnig, the opinion had been requested by the Irish Presidency of the Council of the European Union and tackles the issue of housing shortages. More specifically, the opinion deals with the framework conditions needed to increase the supply of repurposed, renovated and new housing, and provides guidance to relevant actors on implementing modern construction methods.

‘Modern methods of construction can become a key pillar of affordable housing, but only if innovation, quality, workers’ rights and public interest objectives advance together,’ said Mr Comer. ‘Modern methods of construction must not be seen as merely a technological or market-driven issue, but must be part of a broader social, labour market, affordability and industrial policy strategy,’ echoed Mr Kattnig.

Boosting industrial capacity for modern methods of construction

The construction sector remains characterised by relatively low productivity growth and fragmented supply chains. Modern methods of construction can counter these issues because they are based on innovative off-site manufacturing and on-site techniques designed to build higher-quality structures faster and more efficiently than traditional building approaches. Examples include scaling up industrialised approaches such as modular, prefabricated and off-site building.

Modern methods of construction therefore have the potential to lower overall construction costs and times and to increase structural precision, quality control, industry capacity and productivity. In addition, by being more environmentally friendly, they also contribute to the achievement of the United Nations Sustainable Development Goals (SDG). This is of the utmost importance, as it is essential that buildings built with modern methods of construction maintain the same long-term quality and value as traditionally built houses.

To achieve these objectives, modern methods of construction need a developed industrial capacity. This is why the EESC argues that the EU needs to drive forward targeted investment to increase industrial capacity to manufacture systems for prefabrication and offsite construction.

All actors must team up to fight fragmentation

The Committee also underlines that the Member States, the Commission, the Housing Alliance and all stakeholders have a role to play in promoting standardisation, eliminating fragmented regulations and ensuring that the systems for modern methods of construction are certified and monitored.

While acknowledging that each Member State has primary competence in housing, the EESC believes that the Commission should contribute to national housing plans and promote cross-border cooperation.

To allow the construction industry to make progress in innovation, the EU must launch a central funding mechanism to encourage and enable SMEs to invest in digitalisation, which should not be limited to construction projects, but also be leveraged to ensure labour rights, quality jobs, working conditions and consumer interests.

Solving the housing crisis must be a top priority

The EU’s housing emergency is not new. House prices in the EU have risen by more than 60.5% since 2013, while rents increased by 28.8% between 2010 and 2025. In 2024, the housing cost overburden rate was 8.2% on average in the EU.

Across Europe, the dramatic mix of high inflation and insufficient wage and pension increases has lowered the disposable incomes of households. This disproportionately affects vulnerable groups, women and young people. On top of this, the decrease in new housing triggers pressure on both purchase and rental markets, leading to price and rent inflation.

A number of additional factors has further exacerbated the housing crisis. The COVID-19 pandemic, Russia’s war of aggression against Ukraine, surging energy prices and increased material costs have made the situation even worse. Against this backdrop, mortgage interest rates have doubled, and the number of building permits issued in the EU between 2021 and 2024 has fallen by 25%.

The Committee continues to push the EU institutions

The EESC has been constantly pressing the EU institutions to find a solution to the housing emergency, adopting a number of key opinions in recent months. In its September 2025 opinion For a European Affordable Housing Plan – the contribution of civil society, the EESC urged the Commission to develop an action plan to enforce the fundamental right to housing.

In March 2026, following on from a Commission presentation on the European Affordable Housing Plan in December 2025, the Committee adopted an opinion on Tackling housing scarcity through affordable, sustainable and family-oriented housing policies, calling for more ambitious measures to address the structural housing crisis.

In its July 2026 opinion on the EU Strategy for Housing Construction, the EESC urged the Commission to swiftly present the initiatives that had been announced in the framework of the strategy, including the necessary framework conditions for construction to serve as a catalyst for affordable, sustainable and high-quality housing.

Currently, the EESC is assessing the Affordable Housing Act, which the European Commission unveiled on 9 September 2026, and is expected to adopt an opinion on the EU Affordable Housing Act in December 2026.