The European Union is intensifying its efforts to tackle the growing housing crisis. The challenge is complex, as individual member states face different structural problems in their housing markets. However, Members of the European Parliament from the special Committee on the Housing Crisis in the European Union (HOUS) agree that several issues are common across the bloc: a shortage of housing, rising prices, and housing stock that often does not meet residents’ needs. In a new report, they have presented recommendations for the European Commission and its upcoming plan for affordable housing.
Although housing policy remains primarily within the competence of EU member states, the EU is preparing support instruments to help address the crisis. In December 2025, the European Commission presented its initial set of proposals, which the European Parliament will now review. The HOUS committee adopted a report on the issue in February, and Members of the European Parliament are expected to debate it during the March plenary session.
“The HOUS committee was created to develop recommendations for the European Commission aimed at resolving the growing housing crisis across Europe. It is a highly complex and specific issue because each member state, depending on its geographic location and economic situation, faces different housing challenges,” said Jagna Marczułajtis-Walczak, a representative of the European People’s Party, in an interview with Newseria.
According to an analysis of housing needs in the EU conducted at the request of the HOUS committee, Southern and Eastern Europe are struggling with high levels of overcrowding and poverty, while Western and Northern Europe face rising prices and limited supply. Urban areas are dealing with severe shortages and rapidly increasing housing costs, whereas rural and remote regions often face deteriorating housing stock and limited investment.
The report indicates that Europe is primarily facing an affordability crisis. In the second quarter of 2025, rents increased by 3.2% and house prices rose by 5.4% compared with the same period in 2024. Over the past decade, house prices have increased by more than 60% on average, while rents have risen by 28%. One in ten EU residents is now affected by excessive housing costs, meaning that housing expenses exceed 40% of their disposable income.
“The main cause of the housing crisis across Europe is a shortage of supply. This is a common problem affecting all member states. There are simply not enough homes, and efforts must be made to increase their number. At the same time, prices remain a major challenge. That is why we are calling on the European Commission and member states to introduce tax incentives, for example for renovating existing buildings or vacant properties,” Marczułajtis-Walczak explained.
Members of the European Parliament have also urged member states to introduce effective tax systems based on incentives within housing policy. Such measures could stimulate the renovation of existing buildings as well as the construction of new homes. The European Commission would monitor how national tax incentives affect housing prices and availability.
Among the potential measures considered by the European Parliament is a reform of VAT regulations. After conducting further analysis, it may be possible to introduce a very low VAT rate for the construction, renovation, and rental of housing developed as part of social housing policies. The aim of such changes would be to increase housing supply and provide real support to low- and middle-income households.
“The report calls for expanding the supply of cooperative housing and increasing transparency in rental prices. It also includes provisions addressing the needs of people with disabilities, young people, and older residents,” said Joanna Scheuring-Wielgus from the Socialists and Democrats group.
Young Europeans are among the groups most affected by the housing crisis. In 2023, the average age at which young people left their family homes exceeded 26 years. In some EU member states, nearly 70% of people aged 18–34 had no alternative but to continue living with their parents. According to the European Central Bank, disparities in access to the housing market have widened over the past 15 years, and entry into homeownership is occurring later in life.
“We are seeing this trend in many countries. Young people remain in their parents’ homes because they simply cannot afford to buy a flat,” Scheuring-Wielgus noted.
The report emphasizes that for groups most affected by the housing crisis—including migrants, single parents, young people, the elderly, and people with disabilities—the development of social, municipal, and cooperative housing is crucial. Yet social housing accounts for only about 6–7% of total housing stock across the EU. Investment in this segment dropped sharply after the 2008 financial crisis, and the share of social and cooperative housing continues to decline in many countries.
“In line with the UN Convention on the Rights of Persons with Disabilities, we want to ensure accessible housing, individually tailored solutions, community support, and the development of assisted housing combined with social services such as personal assistance. Instead of placing people in institutional care facilities, we aim to enable them to live within local communities and make decisions about their own lives,” Marczułajtis-Walczak explained.
The report also highlights that 4.4% of people with disabilities experience severe housing deprivation. At the same time, between 70% and 80% of existing housing stock is not suitable for independent living for such individuals. A lack of appropriate housing can deepen social exclusion and limit the ability of people with disabilities to lead independent and professionally active lives.
Members of the HOUS committee also addressed the rapid expansion of short-term rentals, which in many EU cities is placing significant pressure on the housing market. In some districts of Barcelona, Paris, and Rome, properties used for tourism account for between 17% and 25% of the total housing stock. In 2024, guests spent 854.1 million nights in short-term rental accommodations across the EU—an increase of 18.8% compared with 2023.
“Short-term rentals can create a situation where privately owned apartments remain empty when they are not rented to tourists, while residents struggle to find housing. This is happening, for example, in Spain,” Scheuring-Wielgus pointed out.
In many cities, the rapid growth of short-term rental platforms is reducing the supply of housing available for permanent residents and pushing rental prices higher. The European Union is currently working on new regulations concerning short-term rentals, with the European Commission expected to present legislative proposals by the end of 2026.
“As Socialists and Democrats, we succeeded in ensuring that short-term rentals are recognized as one of the causes of the housing shortage. Previously, this issue was hardly mentioned. I had the impression that the problem was invisible. In this report it is finally acknowledged that short-term rentals can pose a threat to residents,” the MEP added.
The report also calls on the European Commission to prepare a simplification package aimed at reducing bureaucracy in the housing sector. Lawmakers want to streamline building permit procedures, for example through digital processes, and introduce a 60-day deadline for issuing permits.
“Among the key elements of this report are provisions calling for an increase in dedicated EU funding for housing policy,” Scheuring-Wielgus emphasized.
The report also highlights the scale of underfunding in housing policy. Between 2021 and 2027, EU support for housing within cohesion policy amounts to €7.5 billion, representing just 2% of the total cohesion budget of €379 billion. In 2024, around 7% of funds from the Recovery and Resilience Facility were allocated to social housing and other social infrastructure. According to an analysis by the European Investment Bank cited in the report, the annual investment gap in affordable housing across Europe is estimated at €270 billion. According to MEPs, funds from the Commission’s plan have already been directed toward improving the energy efficiency of buildings and addressing energy poverty.
