By the EESC Civil Society Organisations’ Group

House prices rose by 47% in the EU between 2010 and 2022. During the same period, rents were up by 18%. According to Eurostat, in 2023, more than 10% of households in cities and 7% of households in rural areas spent more than 40% of their disposable income on accommodation. To shine more light on how we can make housing more affordable and sustainable for all Europeans, the EESC commissioned a study which explores policy solutions to achieve this. In this interview, the study's co-authors, Agnieszka Maj, Economist, and Karolina Zubel, Director of Environment, Energy and Climate Change from the Center for Social and Economic Research (CASE), discuss its key findings.

What is this EESC study about and why is it relevant?

This study on affordable sustainable housing in the EU examines the need for affordable, sustainable housing in the EU, emphasising the role of digitalisation (AI, digital building permits, relevant databases) and social economy structures. Through case studies, it highlights innovative endeavours that improve the affordability, accessibility and sustainability of housing. The study provides actionable recommendations for 2030 and 2050, aligning with the EU’s goals of climate resilience, social equity and economic growth. It offers strategic insights for adapting housing policies to evolving challenges while fostering community well-being.

What are the study’s main findings?

Digitalisation presents a significant opportunity to improve efficiency in housing planning, construction and management, potentially reducing costs and enhancing sustainability. However, its current impact on cost savings is limited. The main barriers to the adoption of digital advancement include traditional stakeholder views, perceived low return on investment, high implementation costs, and lack of incentives, training and regulations. To unlock the full potential of digitalisation, further investment in digital infrastructure, for instance by making digital platforms interoperable, is essential.

The involvement of social economy entities (limited-profit housing associations, public benefit organisations, cooperatives) represents a promising policy innovation to address current housing challenges. These entities offer cost-effective, well-designed housing solutions that foster community cohesion and promote long-term housing stability. For instance, non-profit and limited-profit housing in Vienna, which accounts for 30% of the city’s total housing production, plays a crucial role in stabilising the housing market by exerting a price-dampening effect. This helps to keep rents affordable and prevents market distortions.

On the basis of the findings, what are your main recommendations for action and further research?

In the medium term, EU housing policies should prioritise the introduction of a ‘New European Deal for Affordable Sustainable Social Housing’ and a ‘Housing Directive’ for a unified approach across Member States. Countries should promote innovative models like cooperatives and limited-profit housing, provide flexible financial support to housing projects, and embrace digital tools to enhance housing solutions.

In the long term, housing policies should adopt a strategic, sustainable approach, emphasising local solutions and continuous monitoring. Digitalisation must be standardised through legislation, with circular economy practices like bank loans tied to building circularity, rental incentives based on energy efficiency, and grassroots financing initiatives. Additionally, the ‘social housing’ concept should expand to include middle-income families, similar to Vienna’s ‘societal housing” model, promoting social mix and preventing gentrification. It is also crucial to both focus on new construction and renovations, and repurpose unused buildings to effectively meet housing needs.

Future research should focus on inclusive approaches in urban planning, construction and housing provision to improve accessibility for all citizens. It should also investigate the impact of emerging technologies, such as AI and automation, on cost savings and efficiency in housing development and management. Furthermore, research should explore innovative housing models across EU Member States, identifying strategies that can enhance both affordability and sustainability.

The study was commissioned by the EESC at the request of the Civil Society Organisations’ Group.