The State of the Housing in Europe 2023

This edition of Housing Europe’s report on the State of Housing in Europe focuses on how public, cooperative and social housing is contributing to the fair energy transition and helping residents and communities cope with the current cost of living crisis. We can see that there is a strong commitment from the sector, which shows a significant improvement in the past decade. Social, public and cooperative housing stock often shows a better performance than the purely privately owned one. Taking the example of France, 46% of the social housing stock qualifies as A, B or C energy class, comparing to only 25% of the total housing stock.

However, a significant effort is still required. Public funding has been made available in some countries through the use of EU resources from Resilience and Recovery Funds (for instance in Belgium, Spain and Italy), representing for some housing providers an unprecedented funding opportunity in a context of high uncertainty. However, the current context is marked by increasingly unsustainable costs for construction and renovation, to which lately the increasing cost of financing has been added.

These elements combined are causing many projects to be postponed or delayed if not altogether dropped. In Germany for instance this will likely result in renovation projects being cut by one fourth and new construction by one third compared to planned activities over the coming year.

‘If we are to offset potentially massive social consequences, the data drawn from public, co-operative  and social housing providers across the region reveals that our joint response needs to be fast and far-reaching. The gap between income and housing and more generally living costs which has been growing for decades is now being exacerbated by inflation, rising interest rates and growth in demand’ Housing Europe’s President, Bend Madsen says.

Shortages in available social and affordable housing will come at a time when European citizens are already struggling to cope with increasing inflation which is resulting in a real ‘cost-of-living crisis’. The current price increases have been found to hit hardest households on low incomes, like those typically living in social housing, who tend to spend the highest share of their budget on essential goods such as energy and food.

In the current context additional measures have been taken by public, cooperative and social housing providers to support their residents: for instance in Denmark, Finland, Sweden public and not for profit housing providers have not indexed rents at their usual rate, and the same goes for housing cooperatives in Italy that have also set up solidarity funds to support those who could not keep up with increasing energy bills. Housing provider have worked together with their residents to help them reduce energy consumption and access available subsidies.

Christian Krainer, Vice-Chair of Housing Europe Observatory and Representative of GbV, Austria, explained that the limited profit sector in his country has already managed to renovate 96% of all homes built before 1980, but it is now time to speed up the decarbonization of heating systems – while at the same time building new affordable housing. In terms of which solutions to adopt, he believes that the district approach should be prioritised over the single-building one and highlights technical innovations such as modular construction as a way forward.

Laurent Ghékière, Chair of Housing Europe Observatory and Head of EU Affairs, l’Union Social pour l’Habitat, stresses that ‘the EU can and should strengthen its financial contribution to solve the housing crisis, building up on the effective work of the European Investment Bank (EIB), the good level of use of the European structural and investment funds (Cohesion Policy) and eventually in the near future the use of the revenues generated by the EU emissions trading scheme (ETS2)’.

 

For a more detailed analysis, we invite you to read the full report.