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Using evidence to make affordable housing a more attractive investment

Report from the second meeting of our Ad Hoc Group in support of countries with housing systems in transition

Tallinn, 25 June 2018 | Published in Economy, Social

How can a country build evidence-based housing policy? What is the best way to use evidence to make affordable housing a more attractive investment? The second dynamic exchange at our Ad Hoc Working Group in support of countries with housing systems in transition took place in Tallinn on June 6th, out of which similar concerns all across Europe and beyond emerged. Below you may find an overview of the main discussion points of the day.

10:30-10:40 Welcome note by Chair (Andres Jaadla, Member of Housing Europe Board, Board Member of Housing Europe Estonian Member, EKYL.) and Tour de table

10:40-12:10 Tackle challenges to access EU funding with a focus on rehabilitation Strategies (shrinking cities, empty homes)

Scope: Loans and project development assistance offered by the European Investment Bank (EIB), and Council of Europe Development Bank (CEB) are helping to address the investment gap in order to deliver housing for all.

  • Co-financing facility presented by Samir Kulenovic, Technical Advisor in housing and urban development, CEB

Samir started by introducing the Bank and highlighted that it invests in projects with a social impact. The Bank has currently 41 Members and it is possible to join the CEB if a country is already Member of the Council of Europe. The Ministry of Finance needs to officially apply. A member country can be both a donor and a recipient of loans. More info can be found here.

The housing sector is one of the priority areas (20 % of total loans), and the support targets low-income persons, integration of refugees, migrants, displaced persons and other vulnerable groups, as well as energy efficiency.

Concerning the success factors, Samir considers the following key:

  1. Beneficiary selection and eligibility criteria
    • Beneficiaries: focus on vulnerable groups.
    • Tenure: ownership and rental are both supported
  2. Policy, mature projects, implementation

As Samir says, the CEB is not a policy maker but a policy taker, therefore it does not prescribe policy choices to countries.

  1. Affordable financing
    • Tenure: rental, ownership, mixed
    • Financial means: lending (direct, intermediaries)…but also grants
    • Flexibility: mortgage terms, subsidies, technical support
  2. Land and urban-technical aspects
    • Health & safety plans, environmental management, design


Triin Reinsalu from Kredex (Estonia) asked about the method to set the interest rate. Answer: It depends on the capital markets, the Member States’ financial situation and the nature of the project.

In terms of housing policy, CEB highlighted that disadvantaged groups should be targeted by the national housing policy. The policy also should set up the framework of implementation and rules concerning implementing bodies. In terms of CEB standards, energy efficiency, mobility and size houses are crucial elements.

Doris Andoni from the Ministry of Finance and Economy (Albania) made a comment concerning the situation in Albania and that the presence of CEB has an important impact on the policy-making in the country.

Knut Huller from Housing Europe Partner, IWO pointed out the important refurbishment potential in Eastern countries. The big challenge there however is the burden on building owners and the lack of political will from higher levels. Then the cost problem needs to be also looked at (heating, utilities). In these countries, substantial grant and technical support (to owners and housing associations) are needed to scale and speed up the process.

  • Funding schemes targeting urban rehabilitation presented by Grzegorz Gajda, Economist at the European Investment Bank (EIB)

The EIB supports social and affordable housing for a considerable time and it is enhancing more and more its support towards the sector. Between 2011 and 2016, in total €7,4 billion was lent to our sector.

In terms of urban rehabilitation, Grzegorz pointed out the three most crucial questions: What to build? How to finance? How to reduce operating costs?

To reply to the financing aspect, the EIB can provide different tools (loan, PDA, equity, etc.). In terms of criteria on urban rehabilitation, the EIB supports projects that include the following aspects:

  • Tenant affordability
  • Promotion of social inclusion (in line with EU objectives)
  • Majority of rental
  • Good urban location

Furthermore, a key factor for EIB support is to already have a comprehensive public policy for housing.

Other factors that have particular importance is the

  • Promoter capacity
  • Construction costs within comparable range
  • Sustainable financial structure for construction and operation
  • Clear plans regarding future sell-offs

Grzegorz also provided some hands-on examples coming from Portugal, Poland, Turku and Gothenburg.

  • Portugal: IFRRU 2020 Financial Instrument was set up to finance urban rehabilitation including energy efficiency. The financing came not only from EIB but also from Structural Funds and CEB resources. Portugal set up the IFRRU 2020 building on the experience with JESSICA.
  • Poland: Social & Affordable Housing Investment Platform set up in 2017: EIB with the help of EFSI loans and intermediated loans contributed to the setting up of a new financing product in Poland in a new sector. The success factors include the political will to invest in the sector, the existence of the dedicated financial intermediary (promotional bank of Poland) and a common approach.
  • Turku, Finland: The municipality set up an Action Plan to address the challenges the city faces. Through a unified urban structure, a decrease in number of granted building permits into sparsely populated areas and trough a sustainable mobility system, the Turku would like to become a city of walking, cycling and PT as well as a smart area based on renewables.
  • Gothenburg: The city re-uses the public space -dedicated previously to transport-for housing. The measures will include new construction and adaptation.


Has the EIB minimum quality standards? Though the implemented EPBD and EED Directives, Member States already have good standards. However, for EIB the energy consumption is crucial (NzeB). Another appreciated aspect in projects is the presence of nature-based solutions.

Does housing policy in the targeted country matter? Definitely. The national housing policy should include the elements of affordability, social inclusion, and effective urban planning.

Does EIB assess the impact of projects beforehand and after the implementation? The EIB does not do an assessment on social or environmental impacts because the success of the projects depends on the implementation capacity. The CEB is working via an indicator set.

What about small projects? Under 5 million EUR projects, the lending happens through financial intermediaries. This is what happened in the case of Poland for example.

12:10-13:00 How to build evidence-based housing policy: Panel discussion moderated by Alice Pittini, Housing Europe

Scope: For countries who are in the process of designing their housing policy, the first crucial element is research for evidence which will be the base of the future policy framework. The panel discussion addressed the questions of ‘What information should you look at to define needs? Who should lead this evidence collection? How to go from evidence to policy formulation?

  • The role of central and local government in planning for affordable housing, experience from Scotland (Mary Taylor, Independent housing expert)

The roles of local and national government in determining evidence-based housing policy has had a recent boost in Scotland. The government is interested in many different aspects of housing and collects data about them: the subjects range from homeowners, regeneration, travellers, fuel poverty, homelessness, etc. In order to facilitate evidence, the Government created the Centre for Housing Market Analysis (CHMA) that promotes guidance on the local strategy for all local authorities (32). A tool called HNDA (Housing Need & Demand Assessment) supports local authorities and others to undertake strategic planning of housing in Scotland. HNDA helps to reduce the cost and complexity of housing need and demand assessment and produce more meaningful and comparable local strategies to inform central government decision-making about investment.

In terms of crucial factors of evidence-based policies, Mary highlighted three:

  • Collecting data on the whole population and having a sound, shared method;
  • Local authority leading the work on local data and the interpretation of it;
  • Engagement of practitioners, prospective beneficiaries, lobbyists


  • The experience of the Eastern region (Gulnara Roll, UNECE, Head, Housing and Land Management Unit)

UNECE Housing and Land Management Unit is responsible for Eastern, South-eastern Europe, Caucasus and Central Asia. The areas of work include not only sustainable housing and urban development but also land management. The Unit prepares the relevant country profiles on these areas.

Since the adoption of the SDG Agenda in 2015, collecting evidence became top priority on sustainable cities and communities. The SDG 11 set clear targets to be achieved until 2030 such as access for all to adequate, safe and affordable housing and inclusive and sustainable urbanization. Also, other adopted documents increase the need for more evince such as the New Global Urban Agenda and Geneva UN Charter on Sustainable Housing (2015), to mention some.

The UNECE is promoting evidence-based policy making at national and regional level through:

  • Country profiles- in total 20 Total 20 and Preparation of National Action Plans to support the implementation of recommendations
  • Regional observatory on urban related SDGs and the Geneva UN Charter at SDG Helpdesk web portal. This online knowledge hub includes e-learning, e-library, thematic forums
  • Training materials and trainings on data for SDGs
  • Network of Geneva UN Charter Centres of Excellence
  • Guidance document for the implementation of 2030 Agenda with best practices from countries
  • Policy paper on data collection for review 2030 Agenda implementation 

In terms of thematic support, the UNECE also focuses energy efficiency in buildings (task force), administration and land management (benchmarking, technical guidelines, surveys, studies, and workshops) and smart & sustainable cities (U4SSC).

  • Linking policy and research: The new UK Collaborative Centre for Housing Evidence-Professor Alex Marsh, University of Bristol

The UK Collaborative Centre for housing evidence has been established recently in order to have an independent housing research Centre that provides a leading voice in the UK on housing policy and practice. The aim is to produce evidence that fills current gaps in knowledge and understanding and responds to priorities and demands as they arise.

The centre includes 10 universities and 3 non-academic institutions as well as partner & collaborator networks. The team is made up of Co-Investigators and staff, focusing on 7 themes. The Centre has also an Administrative Hub located in Glasgow. Its Knowledge Exchange Hubs is located in 5 regions across the country: these cover the devolved administrations (Scotland, Wales and Northern Ireland), while England is split into two areas (South and South West; Midlands and North).

Tools of the Centre include among others:

  • Multi-disciplinary, inclusive, uses a range of research methods and covers the whole of the UK
  • Co-produced ‘Prioritisation Workshops’ organised by each Knowledge Exchange Hub
  • Multiple channel Knowledge Exchange
  • Secondment programme

Current projects relating to establishing the Centre include the set- up of Knowledge Exchange Hubs, implementation of Exemplar Projects and Establishing the Data Navigator, the Early Careers Network & secondments. Current research projects include an international review of housing taxation; research on the use of big data in understanding the private rented sector; and a review of evidence on the effectiveness of homelessness prevention.

13:00-13:30 Interactive discussion-Q & A

Transforming the evidence to policy- How? UNECE is developing the country profiles together with government experts and independent experts. Gulnara Roll pointed out that engaging in co-production of research with stakeholders from the policy world can increase the perceived relevance and timeliness of the research, thereby increasing its chances of influencing policy.

However, as Mary Taylor suggested, it is important to ensure that evidence is produced independently. And there needs to be space to conduct research that addresses ‘blue skies’ issues or that advances understanding, even if this is not viewed as addressing current policy agendas directly.

How to improve institutional data processing? UNECE developed a Regional observatory on urban policy related SDGs and set up a SDG Helpdesk portal mentioned above. This hub includes e-learning, e-library, etc.

The meeting was followed by three study visits to respective innovative housing projects in Tallinn, showcasing how the Estonian housing market is walking down the energy efficiency and affordability path.

Read more about the study visits here