Access to good quality and affordable housing is a basic need of the European population, it is key to achieving a number of economic, environmental and social policy objectives and to promoting equal opportunities, social inclusion and mobility.
The current energy supply crisis triggered by the war in Ukraine and the unprecedented increase in energy prices, piling up on top of the economic and social consequences of the COVID crisis, have intensified the severity of the affordable housing crisis that EU Member States have been facing for years.
Although housing policy remains the competence of the EU Member States, the shortage of decent and affordable housing in the EU requires a European action plan on housing. A comprehensive and easily understandable set of measures should help Member States, regions and cities in Europe to sustainably boost social cohesion. Stepping up the energy performance of buildings is key.
At the Ministerial Conference on Housing and Construction held in Nice on 7 and 8 March 2022, EU Member States unanimously adopted a declaration which embodies the European consensus to recognise the strong political challenge of producing and investing in sustainable, affordable, decent, and resilient housing that respects quality of life. The Nice Declaration sets out the commitments made by the EU Member States as well as the levers of action available to them. The declaration therefore marks the beginning of a new cooperation between EU Member States, the European Commission and the other European institutions.
As part of the renovation wave strategy, the affordable housing initiative intends to at least double renovation rates in the EU by breaking down long-standing barriers to energy and resource-efficient renovation as well as improving reuse and recycling. By 2030, the construction sector could see 35 million renovated buildings and up to 160 000 additional green jobs. Social housing features among the main beneficiaries.
At EU level, the initiative is in line with the European Pillar of Social Rights, under principle 19 "housing and assistance for the homeless", the cohesion policy 2021-2027 objectives that support local strategies, The European Regional Development Fund and the New European Bauhaus project, which aims to combine design, sustainability, accessibility, affordability and investment to help deliver the European Green Deal.
OBJECTIVES OF THE CONFERENCE
This conference will be co-organised by the Ministry of Economics of Latvia and the European Economic and Social Committee and it will bring together local, national and European actors to discuss the challenges and solutions for building sustainable and affordable housing.
The conference will address three main questions:
1. Who should benefit from affordable housing? – Defining households in need
- The event will try to identify different approaches to defining households in need of support in terms of access to housing. It should be noted that the purchasing power represented by the level of household income varies significantly between Member States, so the need for support varies considerably; however, the current EU State aid framework in this area does not provide sufficient flexibility and significantly limits the Member States' ability to provide the necessary support.
- Youth/gender perspective.
- Civil society action on the ground.
2. Which financial instruments? – Identifying the best funding practices
- Historically, the challenges of access to housing have been widely addressed using grants, which in different Member States have gradually transformed over time into the more sustainable solution of long-term loans. EU Member States such as Austria, the Netherlands and Denmark have introduced and operate effective financial instruments to improve access to housing. In Latvia, the European Recovery Fund has assigned funding of EUR 42.9 million for the creation of a long-term affordable housing fund, which will finance the construction of low-cost rental housing around the country. The conference will also identify different practices for funding access to housing and discuss what Member States can do to move from grants and subsidies for housing access to a sustainable financing model.
- The EIB has significant experience and resources to finance affordable and social housing, nevertheless there are several constraints as to why the available tools are not widely used. What should the tools be for the future and should there be a change in approach to encourage investment in social and affordable housing?
- The current recast of the Energy Performance of Buildings Directive (EPBD) proposes comprehensive measures to accelerate energy efficient renovation of residential buildings. However, financing the Renovation Wave remains a complex challenge. The Commission expects a funding gap of around EUR 275 billion per year by 2030. Public funding for renovation purposes is often too slow to deploy, too bureaucratic and not scalable enough due to the magnitude of the challenge. ECB research estimates that around EUR 214 billion/year of the needed additional funding should be covered by bank loans. The text reviewed by the Commission rightly emphasised the role of energy efficiency loans and mortgages in the Renovation Wave by introducing the concept of "mortgage portfolio standards". However, banks lack incentives to offer cheap lending products.
- What role can the banking sector play in the Renovation Wave? How can the European Central Bank unlock affordable green loans and green mortgages?
- How could further synergies be created and developed to combine public and private investments and funding schemes in building renovations for the most vulnerable?
- How is organised civil society involved in defining or implementing funding projects?
3. How to boost investments in energy efficiency of buildings? – How to better integrate the EU, national and local levels?
- How will the revised Energy Performance of Buildings Directive (EPBD) accelerate building renovation?
- How will the revised Energy Efficiency Directive (EED) increase energy efficiency and in particular help the most vulnerable households?
- Do national long-term renovation strategies (LTRS) comply with the elements required by the EPBD and are they ambitious enough regarding the renovation targets?
- How to further maximise synergies between the National Recovery and Resilience Plans (NRRPs), LTRS and other recovery measures?
- The NEB, which connects the European Green Deal to our daily lives and living spaces, is a key opportunity to harness the creative potential of regions and municipalities, provide jobs locally and create accepted and sustainable solutions. How can it be assured that cities and regions are at the centre of the initiative and receive technical assistance and appropriate funding?
- How is organised civil society consulted/involved in defining action at EU level?