Adequate housing is a human right and the basis of social cohesion and social peace. Official data shows that more and more Europeans are at risk of housing exclusion.
Levels of homelessness are increasing all over Europe. Housing has become the highest expenditure for European citizens. Rents and house prices are growing faster than the income in the majority of EU member states. There is no end in sight. Since the economic crisis 2007/2008 there has been an alarming decline of investment in affordable and adequate housing in Europe. The legal uncertainty and lack of clarity caused by current EU state aid regulations are barriers to public and private investment in affordable housing. Therefore, improved housing policies are required. In particular better financing and regulations and knowledge exchange.
House prices are growing very fast
House prices are one of the key determinants of housing affordability, and 2016 saw the highest annual growth rate in house prices since 2009. In a majority of the Member States, house prices are even growing faster than incomes. Housing is overall the single highest expenditure item for Europeans today.
Overburden Rate remains stable at high level, hitting harder the poor
The housing cost overburden rate is the percentage of the population living in households where the total housing costs represent more than 40 % of the disposable income. The average EU overburden rate among people at the risk of poverty has increased significantly: Compared to pre-crisis level from 35% at 2005 to over 39% in 2015. The share of poor households paying too much for housing has doubled in some countries.
Increasing levels of homelessness
Even though defining the issue of homelessness in quantitative terms is difficult, it is possible to identify trends. Most recent evidence is the FEANTSA report 2017: In 15 countries there is an increasing level of homelessness. This also reflects the increasing costs for housing. Additionally, the risk of social exclusion affects a larger share of the population in Europe
Level of housing construction is too low
The level of housing construction is still low and is also recovering much slower than prices. The residential construction as a share of GDP is currently just over half than its level in 2006. Especially Cities are facing a structural housing shortage, this also contributes to increasing prices and rents.
Decreasing public expenditure for housing
The overall policy response at Member States level has been to decrease public expenditure for housing. Instead they have implemented measures to increase the access to homeownership or supply in the private sector. Many States are spending more on housing allowances than on supply- side subsidies or building new homes.
EU state aid and SGEI: Target group in social housing as a problem
The impact of the European Commission on national housing policies especially through the concept of “Services of general Economic Interest” (SGEI) and state aid rules led to controversies in several Member States. Social housing is the only sector in the SGEI decision for which the Commission mentions a target group: disadvantaged citizens and socially less advantaged groups. There was even court case regarding the Netherlands, where it was estimated that thousands of people would no longer be able to access either the commercial housing market or the social housing sector.
Sources
Housing Europe - The State of Housing in the EU 2017 (PDF)
Download
Factsheet "Europe`s Housing Challenges" (PDF)