The Affordable Housing Act presented by the European Commission represents a concrete and necessary response to strong demands from local and regional authorities, particularly mayors. They are calling for appropriate, direct tools to address distortions in the rental market and tackle the growing difficulties people face in accessing housing.
Where homes are increasingly converted to short-term accommodation, stronger, proportionate rules must help protect residential use and the communities that depend on it. The phenomenon of short-term rentals is profoundly transforming urban environments. In historic city centres, entire neighbourhoods risk becoming one large, dispersed hotel, displacing permanent residents and undermining local vitality. In tourist areas, excessive speculation is driving up rents, making housing increasingly unaffordable and driving people out of their communities. However, dampening an over-heated market is not the same as making housing genuinely affordable.
Marco Corradi, President of Housing Europe, said:
“The Affordable Housing Act proposes new tools to respond to housing pressure. The bigger opportunity is to get ahead of it. Public, cooperative and social housing providers can turn land, finance and public investment today into homes that remain affordable for generations. Let’s dampen today’s over-heated markets while building the affordable homes that can prevent tomorrow’s.”
Right across Europe, people struggle to find homes they can afford, including in non-tourist and peripheral areas where short-term rentals are absent or marginal, but where finding affordable rental housing remains a critical problem. The core challenge is part of a broader picture: a severely limited supply of rental housing despite unused or underused stock, coupled with an unsustainable gap between market rents, housing costs, and household incomes. The structural solution is to increase the permanent supply of public, cooperative, and non-profit social housing and ensure that investments made today remain affordable for generations.
Subsidiarity, housing stress definitions, and national frameworks
For the Act to work, the proposal will need some fine-tuning based on input from local level. Requiring an area to demonstrate housing stress over several years risks, making intervention reactive when it must be preventative may have the oppositive effect as the stated objective. Authorities require reliable data on short-term rentals, clear definitions of primary residence, and the ability to intervene in a proportionate manner tailored to specific local market conditions.
Common European criteria if introduced must fully respect the principle of subsidiarity and preserve national zoning classifications. The European definition of “high-demand areas” must complement existing national measures, such as established rent moderation zones, tax incentives, and priority funding access without replacing them, restricting local authorities, or reducing the capacity of public housing providers and landlords to act. European criteria must expand local authority possibilities rather than create new inequalities between territories in crisis. Furthermore, housing stress cannot be judged by prices alone; affordability relative to incomes, availability, access to services, and liveability and climate resilience are essential indicators.
Recognising the mission of public, cooperative, and social housing
Public, cooperative, and social housing providers are the bedrock of sustainable housing systems. They supply a vital foundation that the market cannot guarantee independently, homes protected from speculative market dynamics that remain affordable over the long term. European policy must clearly distinguish the enduring mission of public, social, and non-profit actors from for-profit or temporary affordable housing provision.
Social housing must be formally recognised as essential social infrastructure for European territories. While the Commission’s accompanying recommendation recognises the sector’s role, including priority access to land and faster permitting, Europe must now make growing the permanent stock of public, cooperative, and social housing an explicit, structural objective.
Operational realities, financing, and budgetary commitment
Ambition must be matched by operational reality and dedicated financial resources. Position directions require concrete European budgetary commitments, specifically dedicated funds, grants, public guarantees, and subsidized loans, to ensure measures extend beyond non-binding recommendations. Europe needs to mobilize resources on a scale comparable to the Recovery and Resilience Facility (RRF).
Delivering on these targets requires taking better account of the economic and operational realities of building and renovating homes.
- Construction and material costs: Financing models must directly reflect rising material and construction and decarbonisation costs to protect project viability.
- Regulatory flexibility: Technical standards and public procurement requirements should be stream-lined to support delivery in line with social and climate realities.
- Industrialisation and off-site construction: Operational approaches like off-site construction and industrialised production must be carefully assessed to ensure they genuinely lower costs and accelerate delivery and liveability also at extreme temperatures rather than adding new overheads.
To move beyond one-off projects, multi-annual investment programmes must be established with the necessary fiscal space. Combining European, national, and local budget resources will allow public, cooperative, and social housing providers to scale up delivery across four key operational tracks:
- Regenerating existing stock: Renovation and conversion projects to expand accessible rental supply.
- Reclaiming vacant housing: Target initiatives and guarantee schemes encouraging cooperation between private property owners, municipalities, and social providers to bring un-used homes back into affordable use.
- New development and public assets: Utilising public land, public assets, and municipal sites availability for new social housing developments.
- Long-term financial delivery: Combining public grants, long-term loans, and guarantees to future-proof housing management for the long-term.