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The housing crisis: hitting close to home
Ensuring its citizens’ access to affordable, decent housing is becoming a serious challenge – and priority – for Europe.
Between 2010 and 2025, property prices in the EU rose by more than 60 per cent and rents by almost 30 per cent. In a Eurobarometer survey on housing conducted in 2025, 51 per cent of respondents considered the affordability and quality of urban housing to be an immediate and urgent problem.
Affordable Housing Act
Last December, the Commission published its ‘Affordable Housing Plan’, a strategy aimed at determining how it can help public authorities tackle this issue by increasing the housing supply, mobilising investment, bringing about structural reforms, and protecting the groups most affected by the housing crisis.
One thorny issue – as many of us return from our holidays – is the proliferation of AirBnB-style short-term lets, particularly in cities, which are pricing not only the poorest but also the middle classes out of urban living. The Affordable Housing Act, expected on 9 September, is a specific legislative initiative intended to equip local and national authorities to identify and tackle such challenges, including by granting them greater legal flexibility to regulate short-term lets once housing difficulties have been identified in a specific area.
Pushing people into poverty
According to Eurostat, around 10 per cent of the bloc’s urban dwellers spend 40 per cent or more of their income on housing. This is known as the housing cost overburden rate.
Meanwhile, the European Anti-Poverty Network (EAPN) reports that escalating housing costs are swallowing up gains from poverty-reduction policies such as wage increases or welfare benefits.
The Portuguese arm of the organisation cites Eurostat data showing that, in 2024, 16.6 per cent of Portugal’s population was at risk of poverty – but that if housing costs were included in calculating the at-risk-of-poverty rate – which they are not officially – this figure would rise to 27.6 per cent.
Renascença has spoken with Paula Cruz, a sociologist at EAPN Portugal.
Paula Cruz, Sociologist at EAPN Portugal (in Portuguese):
“The most important thing is paying our rent; paying our mortgage. In short, covering housing-related costs. For everything else – food, medication and so on – people try to find a way. So, with housing costs rising as much as they are, people are becoming much more vulnerable to poverty.”
Portugal’s former finance minister João Leão is a professor of economics and public finance and member of the European Court of Auditors. He tells our Portuguese partner station how dire the situation is in Portugal.
João Leão, Member of the European Court of Auditors (in Portuguese):
“Since 2015, Portugal has seen the sharpest rise in house prices [in the Euro area]. [...] The latest figures show that house prices have risen by around 180 per cent and have increased three times faster during this period than in the rest of the EU.”
And what does the European Anti-Poverty Network see as the solution?
Paula Cruz, Sociologist at EAPN Portugal (in Portuguese):
“We have been advocating for investment in social housing for some time now. Portugal’s investment in social housing remains woefully inadequate.”
In neighbouring Spain, architect and urban planner José María Ezquiaga looks at the causes of the crisis, the challenges that lie ahead and the role of social housing in a wide-ranging interview with esRadio Castilla y León.
He begins by explaining that over the last few decades, Spain has seen significant population growth, driven to some extent by external migration.
José María Ezquiaga, Architect and Urban Planner (in Spanish):
“The result of this situation is that there has been a shortage; a demand for housing at a time following the economic crisis when housing production in Spain has plummeted. [...] The Bank of Spain has estimated that this shortfall is currently growing at a rate of almost 100,000 homes a year, and that in 2025, we were already facing a shortfall of 600,000 homes.”
But internal migration, he goes on, is complicating matters further.
José María Ezquiaga, Architect and Urban Planner (in Spanish):
“An internal migration that is still taking place from small towns to medium-sized towns, and from medium-sized towns to major cities, and above all to the large metropolitan areas of our country. [...] People have sometimes spoken of there being a ‘crowded Spain’ and an ‘empty Spain’. When it comes to housing, the situation is rather similar. There is a Spain where prices have skyrocketed, and there is a Spain where there is plenty of housing – and, above all, potential for future development – but these projects aren’t getting off the ground because there is no demand; and there is no demand because there isn’t the economic activity in those places to support job creation, meaning that new families cannot settle there.”
So, it’s clear that housing cannot be looked at in isolation.
A widening divide
Cody Hochstenbach, a housing expert based at the University of Amsterdam, talks to our colleagues at The Europeans about how the housing market is actually widening inequalities in European society. He cites data suggesting that renters spend 30 to 40 per cent of their income on housing, compared to just 10 to 16 per cent for homeowners.
Cody Hochstenbach, Associate Professor of Urban Geography (in English):
“This has been studied across Europe. Homeowners spent a significantly lower share of their income on housing than renters. Plus, if you look at the trend in recent years, and this is also again a cross-European finding, [...] homeowners actually spent a stable amount – a slightly decreasing share, even – of their income on housing. While for renters, this share has increased. So again, we see a situation here where the gap between homeowners and renters is widening.”
Some 85 per cent of Bulgarian households do, in fact, own their own home, reports BNR. This puts the country ahead of most other EU member states in terms of home ownership.
Even here, though, young people are struggling to get onto the property ladder – a situation caused, says MEP Elena Yoncheva, by property prices in Bulgaria having more or less doubled over the last decade.
Elena Yoncheva, Member of the European Parliament – ECR, Bulgaria (in Bulgarian):
“The state must develop a policy that will allow young people to buy a home more easily. This should not be a headache for them, but a right. Take the Scandinavian countries, for example, where local authorities are very actively involved in the construction of affordable housing. In our country, social housing has a negative connotation – and not slightly negative, but completely negative. But when I talk about affordable housing, I am talking about quality housing that people can afford, so that families can live with dignity, and young people in particular can lead independent lives.”
Spanish architect Ezquiaga underscores this point by highlighting the knock-on effects of his own country’s failure to help young people in this way.
José María Ezquiaga, Architect and Urban Planner (in Spanish):
“This has led to a very serious decline in the birth rate, a delay in the age of marriage, a delay in the age at which young people leave the family home, and a reduction in the fertility window.”
Public-private partnership
So what does Yoncheva suggest?
Elena Yoncheva, Member of the European Parliament – ECR, Bulgaria (in Bulgarian):
“One of the key measures is the active participation of the municipality in the construction of such housing – in other words, through partnership with the private sector. In Bulgaria, we have one of the lowest rates in the EU of public sector involvement in the creation of affordable housing. In other words, local authorities need to partner with the private sector, for instance by ensuring that a significant proportion of privately owned land is sold at affordable prices.”
Ezquiaga is in agreement, but adds that there is also a lot of untapped potential out there in the form of unused publicly owned land.
José María Ezquiaga, Architect and Urban Planner (in Spanish):
“There is still a great deal of land in the hands of public authorities – both local councils and central government – such as industrial sites in municipalities that have been abandoned or become obsolete; public facilities in other cases; or land occupied by railway, military or even port facilities that are no longer needed for their original purpose. This land can be put to use precisely for the purpose of affordable housing. [...] It’s true that public authorities don’t have sufficient resources to carry out many of these developments on their own. [...] But they can make use of public-private partnership schemes where affordable prices can be guaranteed while harnessing private sector management expertise and investment.”
The Commission estimates the housing investment shortfall to be around 150 billion euros per year across Europe. In this context, it is attempting to resolve the investment issue, notably by using EU and European Investment Bank funds to mobilise national, municipal and private capital, particularly through InvestEU.
As part of its European Affordable Housing Plan, the Brussels executive intends to mobilise an additional 10 billion euros in housing investment for the 2026-2027 period and is in the process of launching a Pan-European Investment Platform for Affordable and Sustainable Housing to support the collaboration between public authorities and private investors. A joint working group tied to this platform was launched in June to shape financing solutions for both new constructions and renovations, with its first formal meeting coming up this autumn.
Brussels is also seeking to address the mismatch between the housing being built and actual needs. This involves offering appropriate incentives to the private sector to prevent speculation, identify areas where the needs are most acute, and so on.