The European Citizens’ Initiative “Housing for All” demands an EU fund for social housing to fight Europe`s housing crisis and to contribute to the European Green Deal.
There is an alarming lack of affordable housing in Europe’s cities. Since the economic and financial crisis of 2008/2009, public investments in social housing have fallen by 50%. The High-Level Task Force (HLTF) on Investing in Social Infrastructure in Europe estimated an investment gap in social housing of €57 billion per year. The HLTF stresses also, that public investment in the housing-sector, which could boost the supply, keeps falling.
Supply and demand side funding
The diversity of housing systems in Europe, with a multitude of involved institutions, makes comparison of the different methodologies of financing in social housing pretty complicated. However, a rough distinction can be made by analysing the two primary levels of social housing finance (Council of Europe Development Bank 2017, 39):
Supply side – financial instruments/mechanisms, which aim to increase the overall supply of quality and affordable housing by construction of new housing or refurbishment of the existing stock by reducing costs (investment and operation) for social housing providers.
Demand side – typically government subsidies (housing allowances) that are transferred to target group tenants to help them pay their rent.
Increasing housing allowances: An alarming trend in the EU
If we look at public subsidies for social housing, we see a worrying trend. (see Graph in “The State of Housing 2019”)
- Supply side public support for the new construction of social housing units and for the refurbishment is considerably decreasing.
- Demand side public support for housing allowances (direct payments) for individuals are increasing rapidly. Between 2009 and 2015, expenditure on housing allowances in the EU has increased from 54.5bn to 80.8bn Euros.
“Overall, in most countries, the primary objective has been to turn away from supply-side financing towards demand-side mechanisms, with governments increasingly relying on private actors/social housing associations to supply housing.” (Council of Europe Development Bank 2017, 35)
Housing allowances might stabilize the living situation, avoid homelessness and reduce poverty momentarily, but they cannot increase the number of social housing stock units, which would be urgently needed. Very often, allowances are eaten up by increasing rents. Critics say: “Housing allowance is a subsidy for landlords.” However, governments have to address the housing shortage with appropriate measures that ensure significant savings on the long term. They urgently need money for that.
Therefore, the European Citizens’ Initiative “Housing for All” demands a EU funding programme for the new construction and refurbishment of social housing in the EU. Such a EU Fund would not only be an important contribution to realize the idea of a social Europe, but also a boost for the European Green Deal and Europe’s economy (creating jobs, increase the purchase power of Europe’s citizens etc.).