European Commission to Launch Pan-European Affordable Housing Plan
The European Commission has announced it will present a comprehensive 'Affordable Housing Plan for Europe' in the coming months, signaling a significant strategic shift to address the housing crises affecting member states, including Portugal. The plan will focus on increasing the availability of EU funds, reforming state aid regulations, and introducing new rules for short-term tourist rentals.
The policy initiative was detailed by European Commissioner Dan Jørgensen during a High-Level Conference on Affordable and Sustainable Housing in Copenhagen. "I will present an Affordable Housing Plan for Europe, which will not only define how the EU can have an impact, but also how we can work together... to make affordable, sustainable, and decent housing a reality for all citizens," Jørgensen stated. He added, "Together, we will unleash a new wave of investment."
A primary objective of the plan is to direct more EU capital towards housing. "We are already working with the Member States to double the support for housing under the Cohesion policy," Jørgensen indicated. He also noted that the proposal for the EU's next long-term budget will facilitate the channeling of more funds by member states, cities, and regions into affordable housing solutions. This represents a key development, as housing has not traditionally been a primary focus of EU-level funding instruments.
The Commission also intends to re-evaluate state aid rules for housing projects to assess "restrictions on national spending." This review could potentially provide member states with greater flexibility to publicly fund or subsidize housing developments. While emphasizing the need for public investment, Jørgensen acknowledged its limits, stating, "we know that public funds alone cannot meet the scale of our housing needs, [so] private investment must play a role, and a vital one."
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The plan will also address market dynamics, with the Commissioner vowing to "combat the financialization of the housing stock" to curb what he termed "selfish speculation on a basic need." This includes the introduction of new, "fair" legislation for short-term rentals, a measure of high relevance to Portugal's 'Alojamento Local' (AL) market. The initiative also aims to "review rules and cut bureaucracy" to streamline development.
The announcement comes as housing affordability reaches crisis levels across the continent. The Commission cited estimates that over a quarter of people aged 15-29 in the EU live in overcrowded conditions. In 2023, approximately one in ten Europeans spent 40% or more of their income on housing. The Commission explicitly acknowledged the challenges in Portugal, where price and rent escalations have been particularly severe. The topic is set to be discussed by EU leaders at an upcoming informal summit, underscoring its political importance.
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