Housing report finds additional 650,000 homes per year needed across EU

James Cox

A European Commission report is to estimate an additional 650,000 homes per year are required across the EU to address supply shortfalls driven by rising construction costs and disrupted supply chains.

In a leaked copy of the report, seen by BreakingNews.ie, the Commission's proposals acknowledge the scale of the housing challenge facing all 27 EU member states.

The recommended measures include revisions to State Aid rules, potential fiscal flexibility for affordable housing investment and initiatives to reduce administrative and regulatory burdens in construction.

The report, which will be published later today, says the European Investment Bank (EIB) will seek to mobilise a "broad coalition of financial actors" to mobilise investments in housing supply.

The report concludes that high housing costs are at the "heart of the cost-of-living crisis".

"Ensuring that every European can afford a decent home is not only about fairness, but also essential for Europe's competitiveness, enabling people to access jobs, contribute to the economy and build stable futures."

It sets out a "vision and a series of actions to increase supply, unlock investment, deliver immediate support while advancing lasting reforms, and supporting those most affected".

The report stresses that these actions must include collaboration "from Member States to cities and regions, from stakeholders to society at large".

The European Parliament's own report, which will be its response to the Commission plan, is currently being negotiated. It is expected to be voted on around March.

Key issues include EU State Aid rules, the idea of highly reduced VAT for housing development and tenant vs property rights.

Fianna Fáil MEP and member of the European Parliament’s Special Committee on the Housing Crisis, Barry Cowen, has "cautiously welcomed" the European Commission’s forthcoming package of measures.

He described the proposals as a “significant but realistic victory” for Ireland where they focus on State Aid reform and enhanced European Investment Bank (EIB) support.

Mr Cowen said: "This package needs to be judged honestly. Much of what is being proposed, no matter how well intentioned, consists of recommendations, and housing will rightly remain primarily a matter for Member States. That was always understood by me, and it’s why I focused my efforts on the areas where Europe can genuinely add value.

“The real, practical win here for Ireland is the movement on State Aid rules and the increased role of the European Investment Bank. Taking bodies like the Land Development Agency and Approved Housing Bodies out of a rigid on-balance-sheet straitjacket will be an absolute game changer in terms of scale, ambition and long-term investment planning.”

He added: “With revised State Aid rules, Government support can go further without crowding out future spending, while EIB finance can be used strategically to back delivery at scale. That combination eases pressure on the State’s balance sheet and frees up space for sustained investment over time.”