Inadequate housing in Europe

Costs and Consequences

Luxembourg, 1 September 2016 | Published in Research

Inadequate and poor housing is costing EU economies nearly €194 billion per year in terms of both direct costs associated with healthcare and related medical or social services, as well as indirect costs such as lost productivity and reduced opportunities. This is according to Eurofound’s latest report Inadequate housing in Europe: Costs and consequences that also comes up with suggestions regarding the benefits of improvements.

The publication was initiated by the European Parliament Own Initiative Report on "Social Housing in the European Union" in 2013 that was calling Eurofound to carry out a study examining the cost of non-action on inadequate housing. Namely the Delli (Green MEP Karima Delli was the rapporteur) report was calling "the European Commission and the Eurofound Agency to carry out a study in 2014, as part of the agency’s 2014 programme of work, into the cost of failing to do anything about inadequate housing". At the same time the data from the third European Quality of Life Survey (EQLS) suggest that, although the quality of housing has been gradually improving in recent years, issues such as heating, insulation, structural problems and cramped conditions continue to affect a substantial proportion of the population in most Member States.

Within this context the Eurofound findings show considerable divergence in the standards of Housing in Europe, echoing the key conclusions of the "State of Housing in the EU" report that was issued by Housing Europe in 2015. It's worth mentioning that the "State of Housing" is quoted by Eurofound while former Research Coordinator of Housing Europe, Alice Pittini has been co-author if the first chapter of the Eurofound report.

According to the data "although only 3% of EU residents reported lacking basic facilities such as an indoor flushing toilet, or a bath or shower, this statistic masks large national differences. In Romania, for example, 22% of the population have neither a toilet, nor a bath/shower. Issues associated with structural problems are more widespread; 12% of EU residents reported damp or leaks, and 9% lived in accommodation with rot in windows, doors and floors. While housing policies are the prerogative of national governments, many Member States face similar challenges. Of course, again, there are pronounced national differences; in Cyprus more than half of residents reported a structural issue in their dwelling, whereas in Austria and Sweden it was less than one in ten."

This report by Eurofound aims on the one hand to improve understanding of the true cost of inadequate housing to EU Member States, highlighting the concept of non-action costs:

one of the fundamental notions behind the agenda of social investment, advanced by the European Commission and most notably represented by its Social Investment Package (2013).
a long-term planning of policy based on thinking in terms of investment, return, and preventing costs requires good understanding of stocks involved.

Furthermore, the authors estimate that "if all the work to correct these issues was done at once, the €295 billion cost involved in removing housing inadequacies in the EU would be paid back via direct medical savings, and indirect savings and efficiency gains, in 18 months". This figure does not include non-health related outcomes such as the impact on market values, home insurance, enforcement action, or the potential economic and social capital associated with community development via the improvement of housing.

On the other hand the report recommends immediate actions that can be taken, such as improving data collected at national level, so that interventions can be well planned and capitalise on a strong return on investment. The positive outcomes are not limited to health, after all; "Improvements of inadequate housing will have multiple benefits:
– Highest health cost-benefits available if warm and dry homes are delivered and energy poverty tackled
– Benefits go beyond well-being of the dwellers and can improve public engagement and social climate".

Eurofound concludes that "addressing inadequate housing is not only a technical problem: it must involve residents and consider behaviours", which is a case that Housing Europe has also made within the framework of its advocacy work.

The report is also accompanied by a set of case studies from across Europe that will be of particular interest to housing policy experts and legislators.