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Housing investment through Cohesion Policy 2021-27

Read about the outcomes of our Housing Europe session

Online, 18 November 2021 | Published in Economy

The lack of affordable, adequate, accessible, energy efficient housing and resulting exclusion is one of the key risks faced by our cities, regions, and societies at large. The human and economic cost of this policy failure and over-reliance on the market are becoming difficult to brush over. This Info session organised by Housing Europe on 9th November during the European Week of Cities and Regions in 2021 looked into the ways that different regions could and should use Cohesion Policy to address a multitude of challenges.

On 30 June, the legislative package of Cohesion Policy has been adopted and efforts have been made in order to help the construction of more affordable housing and just transition in the Member States such as

  • the introduction of a single rulebook that covers all 7 funds;
  • strong focus to objectives 1, smart Europe and 2, greener Europe (65% to 85% of ERDF and CF resources will be allocated to these priorities, depending on Member States’ wealth);
  • 8 % of the ERDF is dedicated to sustainable urban development, and a new networking and capacity-building programme for urban authorities, the European Urban Initiative;
  • The new ESF+ will focus on the challenges identified in the European Semester and take into account principles set out in the European Pillar of Social Rights.

Now the ball is on the court of the Member States who are busy to define their Partnership Agreement with the European Commission, as well as their Operational Programmes for the upcoming years.

The question is how they will be able to use this opportunity to manage a multitude of issues they face, such as demographic change, growth of inequalities, inadequate housing, energy poverty or sustainable urbanisation) and how they could catalyse the energy transition and the transition to a circular economy, Housing Europe’s Secretary General, Sorcha Edwards noted.

Alison Gilliand, Member of the Committee of the Regions, (PES, Ireland) started by saying that in Dublin, the challenges are very similar to other big cities across Europe and the common goal is achieving sustainable housing and communities.

She stressed that the first challenge is affordable and secure housing as many of the vulnerable citizens live in precarious conditions while the housing market is very tight and rents are increasing. At the same time, according to her, the local government suffers from lack of autonomy, capacity and funding and depend on the central government. The new cost-rental model just started; it is in pilot phase.

The analyses show that energy efficiency is a big part of the new Cohesion policy package. At the moment, prices are rising and Dublin is very conscious of the energy poverty issue, particularly in regard to the older housing stock, Alison Gillard said and added that elderly people with low income suffer the most of this latter issue. There is a massive need for the retrofit of social housing but also need for funding for poor home owners to retrofit their own housing in order for people to be supported to move towards renewable energy. The conversation on the energy mix, however, has not yet started.

Dublin aims to develop life cycle housing and support communities to integrate more vulnerable people. The city has just launched its European Programme Participation Strategy to be aligned with European policies. The local authority will build capacity internally and also learn from partners and share experience with the public.

Referring to the use of the new Cohesion Policy 2021-27 period, the Irish capital has applied for funding of project application to develop a district heating system for 3500 residential homes, for a significant retrofitting programme, and the development of a pilot on low carbon circular economy in a disadvantaged area.

In France, Cohesion Policy provides support to affordable housing since 2009. This has been now reinforced with the upcoming ReactEU (€3.9 billion)[1] and the RRF (€40 billion intended to support France Relance Plan, €550 million will be dedicated for social housing). In short, EU funding is becoming an interesting support for French housing providers, Carine Puyol, EU Affairs Manager at L'Union sociale pour l'habitat (USH), France explained.

As there are parallel processes of the above-mentioned programmes, good coordination and cooperation between the different levels are needed to spend the money well.

In terms of the draft French Partnership Agreement, USH was part of the consultation process. Several opportunities arise in this draft for social housing with the help of ERDF & ESF+ such as:

  • The energy renovation of Social Housing & Private Housing;
  • New construction products & models, Circular Economy Transition (several providers proposed project already under this priority);
  • Water, Biodiversity;
  • Social inclusion & fight against poverty;
  • Health;
  • Urban renovation of districts/ support to sustainable & smarts cities.

Now, the advocacy opportunity is open for the local players to submit their needs and ideas. Social housing local representations bodies worked with the regional authorities in order to prepare the operational programmes. However, some differences can be observed between Regional Authorities in the consideration of social housing as strategic priorities.

Andalusian Agency for Housing and Refurbishment (AVRA) is a public agency that carries out housing and retrofitting programmes addressing the most vulnerable. The agency manages more than 74 thousand dwellings.

According to Marta Romero from AVRA, the key challenge in Andalusia is the summer dominant climate which creates a very warm climate in the hot months. At the same time, there is a lack of appropriate heating appliances to heat during winter time. A big number of the housing stock is energy inefficient and there is a big risk of energy poverty. At the moment, the share of renewable energy in the energy mix is low.

The agency has developed energy efficient renovation processes to speed up the renovation of buildings and it is also testing innovative measures, such as the industrialisation of multi-family social housing construction with zero energy consumption. Moreover, participation and awareness raising activities are also carried out.

Beyond Cohesion Policy, the Agency received also €22 million under ReactEU that will be used to retrofit more than 1000 buildings in the region.

Regarding the upcoming Operational Programme, the agency has developed recommendations that have been sent to the Regional Ministry. AVRA has asked the Ministry to develop strategic Action Lines in 2020 addressing housing through the following measures:

  • Enhancing public research and innovation capacities in housing and urban agenda
  • Energy retrofitting of the public housing stock
  • Conservation and accessibility of the public housing stock
  • Provision of affordable housing to vulnerable groups
  • Affordable housing in deprived areas 

Speaking about the use of one-stop-shops and specific trainings available for the providers, Alison Gilliland from Ireland shared the example of Dublin city which created a specific EU funding office that can link the dots internally and externally. The office brings together the different department to join efforts in applying for EU funding and at the moment, Dublin is also revising its Development Plan.  

Carine Puyol from USH pointed out that the French social housing federation encourages its members to strengthen their cooperation with regional authorities. In a nutshell, USH organises thematic meetings for local housing providers, such as public procurement or State aid issues, and also working on simplifying information for its membership.

Marta Romero from the Andalusian Agency for Housing and Refurbishment (AVRA) has been organising technical events for the personnel on emerging technologies, as well as information events for the tenants on the upcoming works. The Agency has also been collaborating with universities to test new technologies.  

The topic on blending funds was raised multiple times, specifically combining ERDF and ESF funds. The new Package shows significant changes in the wording and objectives of the 25% earmarked for social inclusion under ESF+. We heard that this change could be a good opportunity for local authorities, although for local authorities it can be too complex to manage both ERDF and ESF funds, especially in France where ERDF is traditionally managed by regions and ESF is managed by departments.

Wrapping up the session, Housing Europe’s Policy Officer, Edit Lakatos started by saying that since 2007, Cohesion Policy is increasing its support for affordable housing, with €2 billion in 2007-2013 and €6.6 billion in 2014-2020. The increased budget of the new Cohesion Policy of € 377 billion, as well as the strong focus on smart, green and social priorities gives us room to seize the opportunity.

In addition, the €767 million allocated to technical assistance (entirely financed by the EC) will help us to become confident of our innovative projects.

The focus of the support has been enlarged to:

  • Under ERDF: beyond the classic scope of energy efficiency improvements in housing and promotion of inclusion of marginalised communities, housing infrastructure for migrants/refugees & persons under or applying for “international protection” becomes part of the eligible actions;
  • Under CF the promotion of energy efficiency or renewable energy use stays the focus;
  • Under ESF+ the scope is aligned with the European Pillar of Social Rights which is good news for the affordable housing sector. Merging ESF, Fead and EaSI, ESF+ is not only available for actions of social innovation and social experimentations, but also for upscaling of innovative approaches, Analytical activities (survey, study) and Capacity building (transfer of best practices).

As the panellists highlighted, there is a housing affordability crisis and rise of energy prices resulting in energy poverty across Europe and Cohesion Policy could contribute to their alleviation through energy efficient renovation, climate mitigation and adaptation, as well as sharing experiences and learning from each other.

The negotiation around the PA and the OPs is a particularly slow process due to specific situation that we have currently. In addition, the complexity of funds to be implemented (RRF, React EU, ESIF). There is need for excellent coordination of the different Managing Authorities to be able succeed. 

In addition, the panellist underlined the differences between Regional Authorities in the consideration of social housing as strategic priorities

However, positive developments can be observed in several areas (partnership principle, priority of housing in smart cities, increased attention to independent and healthy living), more efforts should be done to include circular economy, and energy mix in the upcoming Ops. We know that even through numerous national Recovery Plans put these areas in their focus, Cohesion Policy is also needed to reach the EU climate targets.  

Finally, although the EU simplified the combination of grants and FI, the Managing Authorities are struggling to implement projects combining ERDF and ESF. Lack of national co-operation with local authorities, different competencies, lack of resources are all part of the picture.

In terms of Process, PA and operation programmes are being discussed now with the European Commission. The Programming exercise should end this year; however, delay is inevitable.

On the preparation of the Operation Programmes, see  here. the list of the responsible national/regional Managing Authorities.

Housing Europe is monitoring the implementation of the funds for affordable housing and is going to prepare a Report on country allocations, best practices and implementation challenges. Stay tuned.


[1] Some regional authorises decided to dedicate a part of ReactEU to energy efficient renovation.