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Impact of the Recovery Plans on the Social and Affordable Housing Sector

Read Housing Europe's exclusive report that digs deeper into the content of the freshly adopted national Recovery Plans

Brussels, 24 November 2021 | Published in Economy, Future of the EU & Housing

This report investigates the areas of activity in which Member States will be engaged in order to make the Renovation Wave a success. Beyond the renovation efforts, which will account for at least €47.28 billion, it is encouraging that several Member States have also dedicated funds for the provision of social housing and Housing First, totalling more than €5.5 billion. However, as the individual country profiles and analysis in this report will also show, the money that has so far been committed will not be enough to achieve the EU’s targets. Read along.

Last year, the European Commission put together a historic stimulus Plan to help the EU economy recover from the COVID-19 crisis. The EU highlighted its aim to achieve “faster and deeper renovation” of buildings, which is “a must for a net climate neutral EU and a clear win-win investment priority for a green, digital and fair recovery”.

The public, cooperative and social housing sector forms the 11% of the total housing stock and is a key player in the green and fair transition. In the renovation roadmaps coming from the European Commission, public, cooperative and social housing has been identified as one of the key tools for recovery, particularly because it’s a labour-intensive sector.  

Before the COVID-19 crisis, social, cooperative and public housing providers intended to spend yearly 35 billion for new buildings and 23 billion for renovation and maintenance, thus renovating about 400 000 housing units every year. In order to renovate the entire public, cooperative and social housing stock in Europe by 2050 at average level B (60 to 120 kwh/m²/year) or A (below 50kwh/m²/year), thus contributing to the decarbonization 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 10billion yearly until 2050.

The EU has done its part: With the commitment of the Recovery and Resilience Facility, the EU aims at least doubling the annual renovation rate of existing building stock. In total € 560 billion will be dedicated to the Recovery Plans, including an important grant component of up to € 310 billion. In addition, support has been also proposed through the Just Transition Fund, the Life Programme and Horizon Europe.

I am glad to present this paper which digs deeper in the content of the freshly adopted national Recovery Plans and investigates in which areas the Member States engaged in order to make the Renovation Wave a success. Beyond the renovation efforts, that will account to at least €47,2 billion, it is an important step that several Member States also dedicated more than €5 billion for the provision of social housing and Housing First. In addition, key housing reforms have been planned in numerous countries.

Having long been committed to the goal of high energy performance and access to affordable housing, national, local and regional providers will have a significant role to play to implement these ambitious plans and bring us closer to make the Renovation Wave happen.  

However, as the analysis and chapter on country profiles will also show in detail, this amount of money will not be enough to achieve EU targets. More public investment, improved public-private partnerships as well as the establishment of dedicated financial institutions are all part of the future we should aim for.  

Have a good read!

Bent Madsen 
Housing Europe President



The report estimates the renovation efforts of Member States of at least € 47,2 billion, and the access to housing ambition of € 5 billion which will be in total a modest amount (€ 52,2 billion) compared to the current investment need.

The famous ‘Report of the High-Level Task Force on Investing in Social Infrastructure in Europe’ identified a minimum investment gap in affordable housing of € 57 billion/ year.[1] This means that up to 2026, € 342 billion should be invested in the sector and the € 52 billion contribution from the RRF seems just a tiny part of this need.

Moreover, there are also concerns about the absorption ability of this small allocation. If the pace will be the same as in the case of ESIF in the previous years, additional measures would be needed for achieving the desired uptake and efforts should be made towards a new model of governance.

On the policy side, it can already be seen that not enough money has been allocated to dedicated renovation programmes in several countries, thus they will not be able to eradicate energy poverty and to achieve the EUs green target. Also, in some countries, measures in the Recovery Plans seem only to maintain the funding for the management of inefficient buildings. For example, there is no plan of Hungary to implement deep renovation measures or to obtain large-scale funding for the renovation of residential buildings.

Thus, the EU as a whole, will unfortunately miss this historic opportunity of RRF funds to launch wide-ranging population renovation programmes, with forms of support that allow low-income people to access renovations who have not been able to access previous resources.

It is no doubt that more and different funding schemes as well as reforms on energy efficiency standards are key to change this pattern, especially targeting the investment gap due to the low income of building owners.

In addition, as the use of existing technologies in different countries cannot achieve optimal energy efficiency potential, some innovative technologies are needed to bring up full efficiency, with the help of more investments. For that, an integrated approach is needed.

Capacity and skills are the main issue in various local governments to implement the Plans. Authorities have difficulty to manage the level of funding and accompanying procedures and a lack of viable projects that are in line with the RFF is also a great issue. From the tenants/owners’ side, a lack of understanding and skills is also an issue that would require more enhanced advisory services.

In terms of the usage of EPCs, early feedback on implementation shows that it does not suit small public bodies. Several countries such as Poland or Slovenia are testing legislative reforms and the establishment of revolving funds for the public sector in order to increase the energy savings potential.

High-quality large-scale investments in affordable housing are key in the EU, now given our ageing populations, radical structural changes in labour markets, and the opportunities presented via technological innovation. We cannot risk not making those investments, as an ageing population will have serious and prolonged impacts, particularly on the affordability of health, on long-term care and pensions.

It is clear that the EU, EIB and numerous banks have already made major efforts. It’s the turn of Member States to step up and increase public investment in affordable housing together with private investment.

Enhancing and improving the use of public private partnerships should be expanded further, by using InvestEU and financing from national promotional banks. Finally, setting up collaborative institutions such as specialised funds to address changes in sectors, e.g., for energy efficiency or infrastructure could improve the uptake.

We are publishing two country profiles every month. Find the available analyses below.

For any questions related to the report, contact Housing Europe's Policy Officer, Edit Lakatos.


[1] Boosting investment in social infrastructure in Europe, 2018