The European Commission presented on Tuesday the first comprehensive Affordable Housing Plan, aiming to establish a common European approach to the worsening housing crisis affecting millions of citizens across the EU. The extensive legislative package aims to increase housing supply, mobilize public and private capital, curb speculation and short-term rentals, and reduce bureaucracy in construction.
“Europe must collectively take responsibility for the housing crisis and act,” said the Commissioner for Housing, Dan J?rgensen, noting that housing prices in the EU have risen by over 60% in the past decade. “Housing is not just a commodity it is a fundamental right,” he stressed, warning that inaction would leave a “vacuum that could be filled by extreme political forces.”
Public funds for new housing including for the middle class
A central pillar of the plan is the revision of state aid rules to explicitly allow the use of public resources for constructing affordable housing. For the first time, Member States will be able to direct funds not only to social housing but also to middle-income households increasingly excluded from the market.
In parallel, in collaboration with the European Investment Bank, national development banks, and private actors, the Commission promotes the creation of a pan-European investment platform for social and affordable housing. The construction of such housing will be included as a specific objective in national partnership plans for the next seven-year EU funding cycle.
Simplifying permits and supporting the construction sector
To increase supply, a new European Housing Construction Strategy is planned, emphasizing simplification and digitalization of permitting processes. A dedicated “simplification package” is expected in 2027.
The Commission also proposes significant investments in modernizing the construction sector, common standards for building materials, and legislation on Construction Services by the end of 2026, so that companies can operate cross-border under guaranteed labor standards.
Targeting speculation and short-term rentals
Special attention is given to combating speculation in the housing market. The Commission will collect data over the next year on the extent of the phenomenon, which as J?rgensen noted has turned homes into investment products “like gold or Bitcoin.” Mechanisms for transparency and taxation policies will be examined to limit the financialization of housing.
Regarding short-term rentals, a critical issue for tourist cities and regions, the Commission announces a legislative initiative in 2026 that will provide national, regional, and local authorities with legal tools to impose “evidence-based and proportional measures.” These may include caps on overnight stays, seasonal operation restrictions, or even freezing new licenses in areas where tourist housing displaces permanent residents.
“We cannot stand by while citizens are displaced from their cities,” the Commissioner emphasized.
Youth, students, and vulnerable groups
The plan includes measures for young people and students, with public funding for new student dormitories and a special Erasmus+ component for affordable housing solutions for students from disadvantaged backgrounds. At the same time, resources will be mobilized for social housing for the homeless, promoting the Housing First model successfully applied in Finland.
Finally, the plan is linked to Ursula von der Leyens New European Bauhaus initiative, emphasizing sustainability, energy efficiency, and quality of life in new settlements.
For many countries especially tourist destinations the Commissions proposals are expected to spark intense discussion on balancing development, tourism, and the right to housing.
