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To help tackle the housing crisis, the European Commission is working on proposals to boost the construction of new homes, relax state aid rules and remove bureaucratic barriers.
“What we are trying to do is take a holistic approach,” European Commissioner for Energy and Housing Dan Jorgensen told Euronews’ featured interview program. european conversation.
“We need to ensure that member states actually support affordable housing,” he added.
Jorgensen and his experts are working on a package of proposals called the EU Affordable Housing Plan, which is expected to be published before Christmas.
The appointment of a Danish social democrat as the first ever housing commissioner was in response to a crisis that has increased dramatically in recent years.
The crisis, which some experts are calling an emergency, is characterized by soaring house prices and rents, leading to declining affordability, especially for young people and low-income households.
This is further exacerbated by a lack of new housing construction, high rates of living in overcrowded housing, and a significant portion of the population struggling with housing costs.
The crisis is also linked to factors such as inflation and low interest rates, leading to impacts such as homelessness and the difficulty of buying a first home. The previous year’s low interest rates made mortgages more affordable, further stimulating demand and driving prices higher.
bad for society
Jorgensen specifically pointed out that the housing crisis disproportionately affects young people.
Many people are struggling to pay their rent or mortgage, many are spending more than 40% of their income on housing, and a growing number are living in overcrowded conditions.
Additionally, many young people are unable to leave their parents’ homes because they struggle to find entry-level jobs.
“It means a lot of things. It means you probably can’t really start the family life that you want. It means you can’t get the education, the job, the training that you want,” the Secretary said.
“On an individual level, of course, this is very bad. But it’s also really bad for society, for example, the fact that they don’t have the mobility that they need in the labor market, and that people don’t get the education that they really want and that we as a society need them to have.”
Strictly speaking, housing is the responsibility of member states, not the jurisdiction of Brussels.
But Jorgensen sees his mission as uniting stakeholders and interest groups to improve conditions in the real estate and rental markets.
“What can we do at a European level to get more investment? Because the paradox is that there is actually no shortage of funds in the markets where we want to invest,” he said.
“Institutional investors are there. They’re looking for long-term investments that will give them stable returns.”
“There is no doubt that we can help connect investors with people who need to invest, and that is what we are trying to do with the pan-European investment platform that we are building in collaboration with the European Investment Bank.”
The city of Brussels will also propose new initiatives to tackle the problem of short-term rentals offered on platforms such as Airbnb and Booking.com.
“Tourism is good, but it’s bad when it feels like it’s actually ruining the lives of the people who live in these cities,” Jorgensen stressed, noting that an increase in the number of short-term rental platforms has led to a significant increase in housing prices.
The so-called “financialization of the sector” will also be central to Brussels’ plans to tackle the housing crisis, the European commissioner said. “There’s a lot of speculation, and housing is seen as a commodity by a lot of investors.”
“It’s fine for people to make money, but then we also have to accept that the investments that are being made do not necessarily have the best outcomes for society as a whole,” Jorgensen concluded.
