EU must work with cities to solve the housing crisis

To build a strong house, you need solid foundations, and the same goes for addressing Europe’s housing crisis. If the new European Commission truly wants to deliver affordable, sustainable homes for everyone, it needs to start by working closely with its housing partners on the ground, including its cities.

With her new mandate, European Commission President Ursula von der Leyen has finally acknowledged the scale of the housing problem. She has made housing a top priority, appointing Denmark’s Dan Jørgensen as the first-ever European Commissioner for Housing and launching the European Affordable Housing Plan to boost investment across the continent.

For the mayors of Europe’s cities, this lays a solid cornerstone. We have long sounded the alarm as rising prices push people and communities into vulnerable situations, and essential workers, single mothers and young people further from affordable homes.

But if this new EU initiative is to pave the way for real change, the president and her team must partner with cities, their closest allies.

Cities have developed a rich diversity of social, public and affordable housing solutions embedded in our urban development plans. By working together, we can build a solid foundation for a Europe where everyone has access to decent housing.

Cities are ready to act

Let’s face it, the housing crisis is most acute in urban areas, where demand for affordable homes far outpaces supply. It is no longer just a crisis for the most vulnerable. Low and middle-income families are also being priced out of the cities they serve.

The numbers speak for themselves. By the end of last year, average EU rents were nearly 25% higher than in 2010, while house prices surged by almost 50%. According to Eurostat, tens of millions of Europeans are overburdened by housing costs.

That’s why, in the 2024 Eurocities Pulse Mayors Survey, more than half of the 92 surveyed city mayors ranked affordable housing as a priority for the next EU budget.

Cities aren’t waiting around for solutions. In the Lyon metropolitan area, local authorities are ensuring the enforcement of national regulations regarding the percentage of social and affordable housing in new housing projects, as well as rent control.

Lyon Metropole is also committed to the fight against homelessness, developing an ambitious housing first programme with a cooperative to buy and renovate vacant homes, and deploying housing solutions for migrants and asylum seekers.

Meanwhile, Vienna’s model of social and affordable housing, known as “housing for the common good,” is world-renowned. The OECD has recommended the Austrian model of social and cooperative housing as inspiration to other countries, as it supports people, the planet and the economy.

Most recently, Vienna expanded its efforts to tackle unaffordable energy prices by significantly investing in energy-efficient housing and providing support for vulnerable groups, including single mothers.

But here’s the catch: While cities are leading the charge, the support we need from the EU and national governments is falling far short of what is needed.

Cities are being forced to make difficult trade-offs between building more homes and maintaining their energy efficiency. Over half of mayors say they lack the resources to house their most vulnerable residents.

The EU must step up to match the ambition cities have shown. This requires more than symbolic gestures; it demands concrete actions.

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Key areas for change

First, the EU must revise its state aid rules, which restrict social housing investment by limiting it by definition to a narrow target group. Reforms should ensure investments meet social needs, providing affordable housing for all, while giving cities flexibility to address their specific challenges.

Second, the next EU budget must prioritise housing investment. Cities need easier access to EU funds to build new housing and to renovate public housing. The scale of social and affordable housing shortage is too great to ignore.

Third, cities need the EU’s help to navigate the complex web of funding mechanisms. Technical assistance is crucial for unlocking EU funds and turning ambitious plans into concrete outcomes.

Social, environmental and economic sustainability must also be central to all housing investments, as demonstrated by the European Responsible Housing Initiative. We need high-quality, energy-efficient homes that benefit everyone.

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Commissioner Jørgensen should work closely with his fellow EU Commissioners in areas such as jobs and skills, social rights, climate action, and a sustainable economy. Housing is more than just brick and mortar; it is about creating resilient communities that leave no one behind.

Time to deliver

If the EU is serious about solving Europe’s housing crisis, it must make cities full partners in this effort. Cities are already driving innovation and delivering results, but we cannot do it alone.

The Housing Commissioner must bring together all housing stakeholders, including cities, regions, housing organisations and tenant unions, to develop a comprehensive EU housing strategy. The European Investment Bank’s proposed financial platform must also reflect the challenges cities face.

We’ve heard the promises. Now it’s time to deliver. Housing is a fundamental right, and cities are ready to work with the EU to ensure every citizen has access to an affordable home.

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President von der Leyen and Commissioner Jørgensen: It’s time to get to work. Europe cannot wait any longer.

Kathrin Gaál is Deputy Mayor of Vienna, and Renaud Payre is Vice-President of Lyon Metropole. They serve as Eurocities Shadow Commissioners for Housing.