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Housing: an essential piece of the ‘Next Generation EU’ puzzle

Time is now for a global rethink of housing policy. The EU must lead on this.

Brussels, 2 June 2020 | Published in Economy, Social

Public, Co-operative and Social Housing Providers' first reaction to the proposed EU recovery package

The Coronavirus pandemic has put the spotlight on Europe’s housing crisis, exposing the shortcomings of our housing policies that have increased inequalities and destabilized our societies. Now that the “Stay at home” guidelines pushed us more than ever before to take stock of the state of housing including the unacceptably high levels of homelessness and over-crowding and unsustainable rental costs in the EU, it’s time for a global rethink of housing policy. The EU must lead on this. Public, cooperative and social housing providers have set the example how to proceed. Here’s why housing is essential to solve the ‘Next Generation EU’ jigsaw puzzle.

“Where the market rules housing, housing systems fail. Where there is an overdependence on the private rental sector to house those on low incomes or in precarious employment, many of whom are paying more than 40% of their income on housing, public investment in the sector that could boost the supply keeps falling. Increasingly, housing supports for low income households are being given in the form of social welfare type payments, rather than in the form of government supported social and affordable housing units. Therefore, we now need to confront the housing crisis we’ve long ago highlighted by focusing our efforts on three axes and following the example our members have set.”,

says Housing Europe President, Cédric Van Styvendael.

1. We need more homes. We need better homes. We know how.

For over 100 years social, public and cooperative housing providers have been at the centre of the rebuilding of our societies after major crisis and disasters. The rebuilding of our European societies after the Covid outbreak needs a solid foundation which is future-proofed both socially and environmentally. Today, public, cooperative and social housing providers guarantee a roof for more than 25 million people, accounting inter alia for more than 30% of the total stock in the Netherlands, 24% in Austria, 21% in Denmark, 16,5% in France and 12% in Finland. These figures are considerably lower in other parts of Europe leaving authorities with more costly private-sector based measures to address housing exclusion.

Public, cooperative and social housing providers complete the construction of around 200,000 new dwellings and the refurbishment of another 200,000 dwellings each year thanks to an investment that exceeds 50bn Euro annually. However, a 2018 study by the High-Level Task Force (HLTF) of the European Commission lead by former President Prodi estimated that the investment gap in affordable housing stands at €57 billion per year. Public investment in the sector that could boost the supply keeps falling. We have now clearly experienced the results of this political choice and we must now define its expiration date.

Housing Europe welcomes the recognition of this missing investment in the published recovery plan, however it is not just a matter of the funding that will be eventually mobilized but the sustainable absorption of much of these funds in the housing sector will depend on having the right governance, checks and balances in place. Established housing providers are already gearing up to use the new funds. If the support package is approved, they will be ready to proceed rapidly. However where the political will and infrastructure is missing absorption rates will be lower and funds will not help those excluded from the housing market.

2. We have to build cohesive communities. We have to build supportive communities. We know how.

According to Eurofound’s briefing ‘Living, working and COVID-19’, 8.1% of households in the EU have been unable to pay their rent or mortgage in the past three months. At the same time, 20% of unemployed people are fearful of losing their home.

The role of social and affordable housing providers continues to evolve, going beyond just housing provision reacting to changing needs. Supported housing & housing first schemes helping households with economic and social difficulties to access and keep permanent housing, thereby actively preventing and addressing poverty and homelessness are now a reality in France, Italy and Spain.

Housing providers increasingly utilize partnerships with employment services to help residents get into work, as in the case of the French ‘Pack Emploi-Logement’. Mobility and digitalization are also incorporated in the traditional public, cooperative and social housing models with providers putting in place car sharing platforms or e-platforms to access parking spots in Austria At the same time, the housing selection experience is changing with tenants now having in many cases the option of a ‘virtual tour’ of the premises or even the possibility to swap social housing units using just an app, see for instance the Dutch ‘Huisjehuisje’.

An important part of the EU recovery plan should be dedicated to support local public services (health, school, employment) that will work together with social, cooperative and public housing providers to help maintain decent quality of life in communities in particular deprived neighbourhoods. The Covid 19 crisis has shown the importance of public space and common areas. A particular attention should be paid to this in future urban development programmes.

3. Our homes must be greener. Our energy transition must be fair. We know how.

Before the Covid-19 crisis, social, cooperative and public housing providers were spending around €35bn on the construction of new buildings and circa €23bn on renovation and maintenance, thus renovating about 200,000 housing units every year . In order to renovate the entire social, cooperative and public housing stock in Europe by 2050 to an average B-grade (60 to 120 kwh/m²/year) or A-grade (below 50kwh/m²/year), thus contributing to the decarbonisation of the building stock and a CO2 neutral Europe, we would need to increase this number by at least 200,000 per year. This would require an extra €10bn yearly until 2050.

A 100 district programme should be put in place. Such an integrated urban regeneration and renovation programme with the objective to create and maintain high quality of life and affordable cost of living shall be financed by 50% of EIB loans and 50% of EU grants, also through potential blending of unspent funds of 2014_2020 programming period with the new EU recovery fund.

We know how to deliver. It’s no surprise that the revolutionary award-winning, also from the EU itself, Energiesprong whole house refurbishment and new build standard and funding approach scaled up initially in the Netherlands using our sector as a springboard. Public, cooperative and social housing providers are frontrunners when it comes to cost-effectiveness in energy efficiency in buildings, a need stressed also in the latest report of the European Court of Auditors.

Finally, on the circular economy aspect, the creation of local supply chains for the re-use of building materials coming from the demolition is an important step towards more circular practices. It has to be promoted through urban planning by mixing the different urban functions, logistics by enabling easier recovery of materials and by new business models involving the creation of material banks for new construction. Our sector once again is coming forward with practical, innovative and inclusive solutions that leave no one behind. An EU delegation has just recently had the chance to get a taste in Kerkrade, in the Netherlands.