The European Union's housing affordability crisis has worsened significantly since 2020, with house prices rising over 60% since 2013 and rents increasing by around 20%. According to Eurostat, EU households spent 19% of their disposable income on housing in 2024. Greece recorded the highest housing costs, with over a quarter of residents spending at least 40% of their income on housing, while Cyprus reported the lowest costs, with people spending just 2.6% of their income on lodging.
The EU's Affordable Housing Act (AHA) aims to address the crisis by mapping out areas experiencing "housing stress" and determining when local authorities can intervene. Measures include increasing affordable social housing, renovating existing buildings, and making better use of empty properties. The Act also allows cities to restrict short-term rentals in areas officially recognized as "under housing stress". However, critics argue that some provisions could hinder cities' ability to act quickly in response to housing market pressures.
One of the most contentious elements of the crisis concerns short-term rentals, such as those listed on Airbnb. The platform would be heavily affected by the EU Act, which it claims will not add a single home to the long-term rental market while adding regulatory uncertainty for hosts. Airbnb wants clearer rules that distinguish between individuals who occasionally rent out their homes and large commercial operators.
Critics of the proposal, including Sarah Coupechoux, head of the Europe Mission at the Foundation for Housing for Disadvantaged People, question the affordability test. An area would normally qualify for intervention only if average home prices are at least eight times local incomes, which could leave out cities already under serious pressure. Local authorities across Europe share these concerns, with the Council of European Municipalities and Regions (CEMR) arguing that housing affordability cannot be measured by comparing prices and incomes alone.
Youth and student groups are calling for stronger protections against rent increases and evictions. CESI Youth welcomes the focus on building social and affordable housing but says young tenants need greater security. The European Students' Union wants students to be treated as a "priority group" in areas under housing stress, with more publicly funded student housing and protection from the effects of short-term rentals.
In response to the crisis, some countries are launching initiatives to support students. In France, real estate organizations have launched a program encouraging owners with spare rooms to offer "intergenerational accommodation" to students. The initiative aims to address the high cost of living for students, with the average French student paying €637 a month in rent and facing upfront costs of over €1,600.
Long-term solutions to the housing affordability crisis will require a sustained commitment to public and social housing. According to Coupechoux, "Housing must be supported with public funds and preserved as a long-term asset." Finding a balance between tourism and the needs of people looking for a home will be crucial in addressing the crisis.
Key points
- The EU's Affordable Housing Act aims to address the housing affordability crisis by increasing affordable social housing and regulating short-term rentals.
- Critics argue that some provisions of the Act could hinder cities' ability to respond quickly to housing market pressures.
- Youth and student groups are calling for stronger protections against rent increases and evictions.
