The European Commission is presenting the first comprehensive European Affordable Housing Plan on Tuesday afternoon, December 16, 2025, aiming to address what Brussels now openly calls a housing crisis across Europefrom Lisbon to Tallinn.
The plans goal is to boost investments in housing through EU budget funds and adjustments to state aid rules, aiming to deliver 650,000 additional homes annually to the European market.
Greater flexibility in state aid
A key aspect of the package is revising state aid rules, enabling member states to use public resources for affordable housing beyond strictly low-income groups. Previously, many governments argued that EU rules constrained them. The new rules allow funding for all social groups excluded from the housing market, recognizing the structural nature of the crisis.
Targeting short-term rentals
The plan also gives national, regional, and local authorities tools to intervene in the rapid growth of short-term rentals. Cities like Barcelona, Florence, and Prague are cited as examples where tourist apartments worsen housing shortages.
Commissioner Dan J?rgensen stresses that the EU does not advocate banning short-term rentals, acknowledging that they provide experiences for travelers and supplemental income for families. However, he notes that in some areas, short-term rentals now represent 20% of total housing stock, far beyond their original purpose. Local and national authorities will retain the final decision on using these tools.
Transparency and speculation control
For the first time, the plan addresses housing market speculation, increasingly treated as an investment product like gold or Bitcoin, overlooking housing as a fundamental social good. The Commission proposes systematically recording the extent of speculation, though translating data into binding policies may face political resistance.
Reduced bureaucracy, common standards, and homeless support
The plan includes a new construction strategy to reduce bureaucracy and create common standards, allowing building materials produced in one member state to be used more easily elsewhere. It also seeks to address the needs of over one million homeless people in Europe, many of whom are not citizens of the countries where they live.
Political stakes
J?rgensen warns that inaction on housing fuels populist and far-right movements, exploiting social dissatisfaction with high housing prices, as seen in the Netherlands and Portugal.
The EU traditionally did not play a major role in housing. This must change, he says, emphasizing that citizens will demand answers at local, national, and European elections. The message to governments is clear: either use the tools provided or face the political cost of inaction.
