In December, the European Commission presented its affordable housing plan, which includes measures to regulate short-term rentals, increase support for social and affordable housing, and prevent speculation in the housing market.

At the recent ministerial meeting, where member states discussed the priorities of the EU housing plan currently being drafted, it was stated that it is unrealistic to expect the EU to "solve everything" from Brussels, given that housing is essentially a decentralised area. Nevertheless, there are several elements that could accelerate progress through collaborative efforts, such as

mobilising investment, streamlining the regulatory environment, and equipping member states and cities with a practical toolkit.

The parties recognised the role of the Cypriot Presidency in promoting dialogue and "advancing the agenda". Issues and proposals raised by Member States can be incorporated into the measures being prepared for the next stages.

Several elements to strengthen the supply side also appeared among the planned initiatives:

• More investment, including the construction of new homes and the renovation of existing properties.
• Utilisation of vacant buildings, with the aim of returning a larger proportion of unused real estate to the market.
• A pan-European investment platform involving the European Investment Bank (EIB).
• Reduction of administrative burdens, including a review of relevant rules and procedures to enable investments to start more quickly.

One of the key messages from the press conference after the debate was that the plan must deliver 'tangible' results for EU cities in the short term, rather than just providing strategic guidance, because the crisis is happening right now.

The issue of short-term rentals (STRs) was given particular attention at the meeting. According to decision-makers, Airbnb-type rentals in several European cities are contributing to rising housing costs and, in some places, are 'crowding out' local residents from the rental market.

However, the proposed approach does not involve a general ban; instead, it outlines the development of a set of criteria to identify the most affected locations. Within these districts, cities could select the solution that best suits their local conditions from a list of tools. The importance of this issue is highlighted by the fact that, according to participants,

short-term rentals were one of the issues raised most frequently by ministers, mayors, tenant interest groups and citizens in the past year.

Although the working group on housing had only recently been set up, the Commission stated that it wanted to speed up the process as much as possible. The Commissioner indicated that

a legislative proposal could be forthcoming soon, and that examples of good practice from Member States and cities were already being gathered.

One focus of this could be assessing where cities encounter obstacles, whether arising from EU rules or not, and how these obstacles can be removed.

On 16 December last year, the European Commission presented its first European Affordable Housing Plan. The plan aims to support Member States, regions and cities where joint EU action can add value. According to the Commission, the housing crisis can be attributed to significant price increases over the past decade: on average, house prices in the EU have risen by over 60%, while rents have increased by over 20%.

According to the Commission, this Plan focuses on

• increasing housing supply and renovations,
• triggering investment and reforms,
• addressing short-term rentals in areas under housing stress, and
• supporting the people most affected, e.g. young people, students, essential workers, low-income and other disadvantaged groups. (The Commission will mobilise new investment in student and social housing and help Member States put in place better solutions for homeless people based on Housing First principles.)

The Commission will now focus on implementation. A new European Housing Alliance between Member States, cities, regions, EU institutions, housing providers and associations, social partners, industry and civil society will drive the implementation of the Plan.

The Commission has so far mobilised significant investments - €43 billion - in housing and will continue to do so under the next long-term EU budget. The EIB would increase its housing-related financing to €6 billion by 2026. It is also developing a new Pan-European Investment Platform in cooperation with the European Investment Bank, national and regional promotional banks, and other international financial institutions.

The Plan proposes measures for a more productive and innovative construction and renovation sector that will address the mismatch between housing supply and demand through the European Strategy for Housing Construction. Among other things, the document sets out plans to simplify and digitise authorisation processes (e.g. Building Information Modelling (BIM)-based digital authorisation) and map Member State procedures between December 2025 and October 2026. The intention is to incorporate these into EU-level proposals at a later stage. Another element of the package is a potential amendment to the state aid framework, which would make it easier for Member States to support investments in social and affordable housing.

Cover image (for illustration purposes only): Getty Images