European Parliament Proposes New Strategy to Combat Housing Crisis
The European Parliament's Special Committee on the Housing Crisis has released a comprehensive report outlining a series of proposals to address the growing issue of housing affordability across the European Union. The document identifies a structural lack of housing supply as the primary cause of the crisis and warns against market interventions like price controls, advocating instead for policies that significantly increase the availability of both public and private housing. This initiative from Brussels comes as many member states, including Portugal, face intense public pressure over soaring property prices and rents.
The report highlights that over the past 15 years, house sale prices in the EU have increased by nearly 60%, while rents have risen by almost 30%. It notes that the situation in Portugal has been even more severe. The committee attributes the problem to decades of insufficient investment in new construction, compounded by slow and complex permitting processes, high taxation on real estate, and a shortage of qualified labor. The document states that these factors have created a market imbalance that cannot be solved by demand-side subsidies alone.
In a clear policy recommendation, the European Parliament advises against "price controls and overly restrictive market interventions," labeling them as "ineffective" measures that "create uncertainty" and "discourage investment." Instead, the committee insists on a two-step approach: first, implementing measures to achieve a "significant" increase in housing supply, and only afterward, introducing policies to support demand from vulnerable groups. The report suggests that failing to follow this sequence risks exacerbating price pressures, an issue particularly relevant to Portugal, which recently introduced demand-side supports for young homebuyers.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
The proposed strategy emphasizes the need for closer collaboration between municipal, national, and EU-level authorities. While housing policy remains a national competency, the report argues that the EU should act as a "catalyst" by removing barriers to investment and creating favorable conditions for development. A key recommendation is the creation of "more solid mechanisms for public-private cooperation" to attract private capital into the construction of housing for low and middle-income households. This approach aims to leverage the private sector's expertise and financial capacity to accelerate the delivery of new homes.
Furthermore, the report calls on public authorities to take "urgent measures to increase supply," which includes streamlining urban licensing, reforming land use policies, and potentially reducing the tax burden on construction. The document acknowledges that the public sector alone cannot resolve the housing deficit and that attracting private investment is essential. The findings and recommendations of the report will now be debated among member states, but they signal a clear direction from Brussels toward a supply-focused solution for Europe's housing challenges.
Understand policy impacts on your Portugal property plans at realestate-lisbon.com.