The European Commission is set to launch its first Affordable Housing Plan in early 2026, a significant measure designed to combat the intensifying housing crisis across the European Union. This initiative aims to support member states, regions, and cities in their efforts to increase the supply of affordable and sustainable housing, with a focus on improving access for vulnerable populations. The plan responds to urgent appeals from mayors of major European cities for decisive EU intervention.
Current Eurostat data highlights the severity of the crisis, indicating that between 2010 and early 2025, EU housing prices increased by approximately 57.9%, while rents rose by 27.8%. In 2023 alone, house prices saw a 48% jump and rents increased by 22%. This surge disproportionately affects younger generations, with over a quarter of individuals aged 15-29 in the EU living in overcrowded conditions, a rate 9.2% higher than the general population. Consequently, many young Europeans are delaying leaving their parental homes, often past the age of 30, due to the high costs of independent accommodation. In 2023, about one in ten Europeans allocated 40% or more of their income to housing and related expenses.
European Commissioner for Energy and Housing, Dan Jørgensen, emphasized the need for a unified strategy and a "new wave of investment" to address these challenges. In May 2025, fifteen mayors from prominent European cities presented a European Housing Action Plan, calling for immediate and substantial EU action. Their proposals include establishing an affordable housing fund, potentially mirroring the scale of the Next Generation EU program, with a target of €300 billion, including at least €100 billion in grants.
The Commission is also working with member states to double support for housing through the Cohesion Policy and is reviewing state aid regulations to relax national spending limitations and open up alternative investment channels, possibly via a pan-European platform. The plan is expected to introduce new funding mechanisms and revised state aid rules to facilitate national spending on housing projects. A key element involves the creation of a pan-European investment platform, a collaborative effort between the European Commission and the European Investment Bank (EIB) Group, alongside national promotional banks and international financial institutions. This platform is intended to direct private and public investments into affordable and sustainable housing, with the EIB Group aiming to facilitate 1.5 million new or renovated housing units across Europe.
Furthermore, the initiative seeks to tackle issues such as the inefficient utilization of the existing housing stock and systemic challenges arising from short-term accommodation rentals, which have been identified as a significant contributor to rising prices in many urban centers. The European Commission recognizes the severity of the housing crisis in Portugal and intends to address it with the upcoming plan. The European Commission's commitment is further demonstrated by the formation of a Commissioners' Project Group on Affordable Housing in early 2025, chaired by Commissioner Jørgensen. This group includes Commissioners from energy, economy, finance, reforms, and social rights portfolios, ensuring a coordinated approach. The European Parliament has also established a special committee dedicated to the housing crisis, underscoring its high priority. The proposed plan draws parallels with large-scale EU financial initiatives like Next Generation EU, showcasing the potential for substantial investment in societal challenges. The urgency is clear, as the housing crisis represents not just an economic concern but a fundamental threat to social stability and individual well-being, affecting millions and risking the exacerbation of inequalities across the continent.