The European Commission is considering relaxing rules which limit the type of state aid EU governments can provide towards affordable housing.
Ursula von der Leyen promised that as part of her second terms as European Commission President she would take the housing crisis.
In a speech last year she said she was “deeply concerned” about what she called the “pain from the cost of living and housing”.
But tackling it at a European level is difficult. Most of the responsibility lies with governments and local authorities.
Nonetheless, the EU does set rules on state aid and the European Commission believes changing those rules could help.
It is not “seeking feedback on a revision of the service of general economic interest (‘SGEI’) State aid rules to address the issue of housing affordability.”
The EU says “significant investments” are needed to bridge an investment gap in affordable housing.
“State aid measures can contribute to incentivising the necessary investments.”
The European Commissioner in charge of state aid matters, Teresa Ribera, has been tasked with taking the issue forward.
“Across Europe, too many families and young people are being priced out of a decent home. That’s not just a housing issue — it’s a social emergency”, she said.
“Today’s revision of the State aid rules is one of the tools we’re using to help Member States act faster and smarter on affordable housing. And above all, we want these rules to work in real life — which is why the voices of cities, regions, and citizens are essential in shaping them.”
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition
The so-called SGEI rules allow member states including Ireland to “implement social housing measures for the most disadvantaged persons without any compensation limit.”
But the European Commission has realised that in reality the rules are holding back government investment in housing.
“The current State aid rules are not adapted to allow member states to effectively tackle the various challenges related to housing affordability that go beyond social housing.
The targeted revision of the SGEI rules aims to address this need and thus contribute to incentivise further investments in affordable housing. The revision also aims to simplify, update and clarify certain concepts in the rules.”
A public consultation is now underway. The European Commission plans to analyse the results before it makes any changes.
The EU says the issue of access to housing affordability is “not confined only to lower income groups. It now also affects a wider section of society due to various factors, including rising demand in urban areas, increasing housing costs, a shortage in housing supply, an aging building stock, regional economic disparities, and tourism and short-term rentals.”
The European Commission has promised to bring forward a “European Affordable Housing Plan” next year. Changes to state aid rules are expected to be a key part of that plan.
The European Commission said that it was focused on “delivering on its promise to make it easier to finance energy efficiency and affordable housing.”