Europe has just launched its first major plan for affordable housing. The idea is clear: to facilitate access to decent housing, especially for young people, working families, and the homeless. No price controls, but a firm hand with tourist apartments and speculation.
Brussels wants to tackle the housing crisis from several angles. They will allocate more funds, bring vacant properties onto the market, approve new rules for short-term rentals, and invest heavily in training for construction workers. They are also looking for ways to curb those who see housing only as an opportunity for speculation.
Dan Jorgensen, the Commissioner for Energy and Housing, explained it in the European Parliament: the EU has opened the door for countries to use national public funds to boost affordable housing. And they're not stopping there. Europe will add its own funds: more than €43 billion has already been invested in housing, but that figure is set to grow. From next year, even more money will be available through the Cohesion Fund, the European Investment Bank, and in collaboration with national banks and other institutions.
In 2026, they will launch a new pan-European platform to pool public and private funds for affordable housing. And in the next two years, they expect to mobilize an additional €10 billion that countries can reallocate to housing using cohesion funds.
Jorgensen insists: Europe needs private investors who offer quality homes at fair prices. But he makes it clear that there is no room for speculators who only think about profiting from high prices. Therefore, next year, they will present an in-depth analysis of speculation in the housing market and, based on that, implement measures to tackle the problem.
It's not all about building more. Another part of the plan is to reclaim vacant homes, focusing on their renovation and refurbishment so they become available again. “We cannot afford to waste a single square meter of our housing stock,” says the commissioner. Right now, 20% of homes in Europe are empty. Too many people without homes and too many homes without people. Solving this is primarily the responsibility of national authorities, but Europe can and wants to help ensure that existing homes are used properly.
They also plan to train more workers, because the construction sector in Europe is suffering from a significant labor shortage. They will collaborate with the industry to train three million workers each year until 2030 and facilitate the transfer of materials and skilled professionals to the areas where they are most needed.
On the legal front, the plan aims to simplify regulations and use digital tools to reduce paperwork and accelerate the construction of new homes. Brussels estimates that, over the next ten years, some 650,000 new homes will need to be built each year to meet growing demand.
On the other hand, they are going to create a new framework to regulate short-term rentals, such as tourist apartments. The European Commission says that this type of rental has reduced the housing supply for local people in some cities.
Yes, these rentals can be an opportunity for many, but they are also making access to housing much more difficult. In some parts of Europe, one in five available apartments is allocated to short-term rentals. We cannot allow people to have to leave their own city or be unable to start a life where they want. That is why a new proposal for legislation on short-term rentals will be introduced next year. It will not be a ban, but it will set clear limits in the most strained areas so that local governments can promote affordable housing. They also want to implement fair measures to compensate for the consequences of this type of rental, the commissioner has made clear.
The Brussels plan also includes initiatives for two groups that are having a particularly hard time right now: young people and the homeless. “We are going to set targets so we can help them and give them real opportunities to build or rebuild their lives,” Jorgensen said.
Iratxe García, president of the Socialists in the European Parliament, applauded the proposal. “Housing is a fundamental right. Prices in the EU have risen by 60%, and rents by more than 30%. 62% of Europeans fear they will not be able to afford decent housing. We need to invest much more in housing, and also take measures to curb short-term rentals.”
For his part, Borja Giménez Larraz, a Member of the European Parliament from the People's Party (PP), emphasizes that Europe is facing a supply crisis: four million homes are needed to meet demand. He argues that less bureaucracy and more streamlined processes are needed to avoid stalling construction, and that property rights must be strengthened. He also calls for lower taxes and more incentives to invest in residential housing.
Nora Junco García, from the European Conservatives and Reformists group, insists that the key is to strengthen legal certainty in housing and set ideology aside. She believes that neither tourist rentals nor investment funds should be blamed. Furthermore, she points out that Spain alone is short more than 400,000 homes for families.
According to Eurostat, housing prices in the EU have risen by 58% in the last decade. In Spain, the increase is 72%. Hungary leads the way with a 237% increase, followed by Portugal and Lithuania with 147%. In contrast, Finland saw a mere 0.4% increase, and Italy a staggering 13%.
A Council report indicates that Lisbon, Madrid, and Barcelona are among the European cities where people spend the highest percentage of their salary on housing. In Lisbon, rent accounts for 116% of the average salary. In Madrid and Barcelona, it's 74%. Milan, Rome, and Dublin follow. Paris is at 45%, Berlin around 40%. Luxembourg, Frankfurt, and Vienna spend the least, at around 34-35%.
The government welcomes the plan and urges the autonomous communities to "take note." The Ministry of Housing and Urban Agenda has endorsed the European Commission's Affordable Housing Action Plan and encourages all administrations, especially the regional governments, to use all available tools to implement it, particularly the Housing Law.
According to the government, the European Plan aims to build more homes, better regulate the market, and provide more subsidies. Furthermore, the Commission encourages countries to take measures to curb speculation, something President Pedro Sánchez has been demanding for some time.
The People's Party (PP), for its part, also welcomes the plan and sees it as a "rebuke" of Sánchez.
The EU's Affordable Housing Plan does not include limits on rental prices nor does it create a common European fund, precisely what countries like Spain were requesting. For the People's Party, this is a kind of "amendment" to the policies of Pedro Sánchez's government.
The PP insists that the European plan focuses on not intervening in prices, building more homes, and simplifying the rules. They say that, in this way, the Commission is on their side and that of their autonomous communities: no price caps, because they believe that doesn't work and backfires.
The PP concludes by saying that Brussels is clear: housing construction must be accelerated, regulations simplified, funds allocated to affordable housing, and decisions made based on data, not ideology or propaganda, as, according to them, the Sánchez government does.
They don't stop there. The People's Party (PP) criticizes the government's management as a disaster: the Ministry of Housing has failed to spend 68% of its budget, has rejected €4 billion in EU loans for social housing and affordable rentals, and has created a public company, Casa47, which they deem useless and which, according to them, will cost taxpayers €16 billion.
For the main opposition party, Sánchez's seven years in Moncloa have only served to decimate the housing supply and drive up prices, which have risen by more than 50%. They also cite a 54.7% increase in squatting and point to the Bank of Spain: the country is short 700,000 homes.
A heated exchange in the Senate over the European plan
The Minister of Housing and Urban Agenda, Isabel Rodríguez, responded by accusing the PP of misleading Spaniards about the European Affordable Housing Plan. She demanded greater accuracy in their discussions on the matter. This was her response to PP Senator Paloma Martín, who asserted in the Senate plenary session that the European Commission had rejected the government's housing proposals.
Martín stated that the government's housing policy, based on intervening in the rental market and controlling prices, has been a failure, and that the European Commission has made this clear: intervening in the market worsens the problem. According to her, the autonomous communities governed by the PP, which have not intervened in the rental market, have made better decisions.
The PP senator went further, accusing the government of spending seven years deceiving Spaniards, of "prostituting" housing, turning it into a "broken toy" of a "decaying" government, and a "headache" for young people. She said that the government has crossed every line of populism and propaganda.
Rodríguez, for her part, rejected these accusations and defended the European Housing Plan, stating that it rests on the same pillars as her ministry's work: more affordable housing, more regulation (especially in high-demand areas, with limits such as those of the Single European Housing Registry), and more aid for young people and vulnerable families.
"She hasn't told the truth, not even in her first statement," Rodríguez retorted, reminding him that the European Commission also wants all levels of government to work together to resolve the housing crisis, which is now a social crisis, and that speculation must be prevented.
Housing, a central issue in Europe
The housing crisis in Europe has become a key issue for President Von der Leyen. By appointing the first Housing Commissioner in December 2024, the EU assumed greater responsibility for helping member states and regional and local authorities find real solutions.
The commitment to making housing more affordable and sustainable resurfaced in the 2025 State of the Union address. In October of that year, the European Council called on the Commission for an “ambitious and comprehensive” plan to boost affordable housing across the 27 member states. With this, the EU seeks its first major common framework to address housing as a social and economic priority for all.