Brussels Announces Major EU Housing Plan with New Funding and Stricter Short-Term Rental Rules
The European Commission has formally announced its intention to allocate increased European Union funding towards affordable housing and to revise state aid rules and regulations governing short-term tourist rentals. The announcement was made by European Commissioner Dan Jørgensen during the High-Level Conference on Affordable and Sustainable Housing in Copenhagen, signaling a significant policy shift that will directly address Portugal's ongoing housing crisis.
In his address, Commissioner Jørgensen confirmed the upcoming launch of a comprehensive 'Affordable Housing Plan for Europe.' He stated, "In the coming months, I will present a plan that not only defines how the European Union can have an impact but also how we can work together—through European, national, regional, and local actions—to make affordable, sustainable, and decent housing a reality for all citizens." The initiative aims to stimulate a "new wave of investment" into the housing sector across the bloc.
The plan's financial component involves a significant increase in dedicated funds. "We are already working with member states to double housing support under the Cohesion policy, and our proposal for the next long-term budget will make it easier for member states, cities, and regions to channel more EU funds into affordable housing," Jørgensen detailed. This move is designed to provide national governments with greater resources to tackle housing shortages and affordability challenges.
In addition to funding, the Commission will undertake a review of state aid regulations for housing projects to "evaluate restrictions on national spending." This could potentially provide member states like Portugal with more flexibility to subsidize or directly invest in affordable housing developments. However, Jørgensen also emphasized the necessity of private capital, noting that "public funds alone cannot meet the scale of our housing needs, [so] private investment must play a role, and a vital one."
A key measure directly impacting property investors will be the introduction of new EU-wide legislation for short-term rentals. Jørgensen announced that the plan will include "specific and significant measures to support cities and regions under pressure," including new "fair" legislation on the matter. This is part of a broader strategy to "combat the financialization of the housing stock" and curb what the Commissioner described as "selfish speculation on a basic need."
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The European Commission explicitly recognized the acute housing challenges in Portugal, where significant increases in property prices and rental costs have limited access to housing, particularly for young people and low-income families. The forthcoming plan is expected to provide a framework for addressing these issues, with specific mention of financing, state aid, and potential limits on local accommodation (Alojamento Local).
The housing crisis has become a prominent issue on the EU's political agenda. Recent data indicates that in 2023, roughly one in ten Europeans dedicated 40% or more of their income to housing-related costs. Furthermore, over a quarter of individuals aged 15 to 29 live in overcrowded conditions, often unable to afford their own homes until their late twenties or early thirties.
While housing policy remains a primary competence of individual Member States, this EU-level initiative reflects a coordinated effort to establish common principles and support mechanisms. The topic is scheduled for discussion among EU leaders at an informal summit in Copenhagen this Wednesday, under the auspices of the Danish presidency of the Council.
The plan also includes a commitment to "review rules and cut bureaucracy" to streamline the development and provision of housing across the Union. The Commission's strategy appears to be a multi-pronged approach, combining financial incentives with regulatory oversight to create a more balanced and accessible housing market.
The final details of the Affordable Housing Plan are expected to be released later this year, setting the stage for significant policy discussions at both the European and national levels. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.