The European Union will need more than two million homes a year to meet current demand. This means adding around 650,000 homes a year to the 1.6 million already built.
Building these additional homes would cost around €153 billion a year, according to the provisional content of the first ‘European Affordable Housing Plan’, which the Commission will present on Tuesday 16 December.
According to a draft seen by Agence Europe, this European plan, announced in 2024 by the President of the European Commission, Ursula von der Leyen, when she appointed the first European Commissioner responsible for this issue, Dan Jørgensen, will be based on four pillars “where action is needed: 1) Boosting supply; 2) Mobilising investment; 3) Enabling immediate support while driving reforms; 4) Supporting the most affected”.
On Tuesday, the plan will be accompanied by a targeted review of the European rules governing State aid for services of general economic interest (SGEIs), a strategy on construction and a communication on a ‘new Bauhaus’, which will also aim to promote the renovation of neighbourhoods and facilitate access to funding for affordable housing solutions.
As Ursula von der Leyen announced during the State of the Union address (see EUROPE 13706/9), in 2026 the Commission will propose a regulation to regulate short-term rentals in “high-stress” areas, a concept that already exists in countries such as Spain and France. These provisions help to regulate overtourism and the harmful effects of tourist rentals on the local population.
Also in 2026, the EU institution will seek to tackle speculation and the financialisation of housing, with an analysis of property speculation, data gaps and economic consequences. And follow-up measures, if necessary. The aim is also to promote greater transparency in the residential property market.
The 2026 work programme will also include a “Citizens’ Energy Package” aimed at further reducing energy bills, eradicating energy poverty and empowering citizens and communities, as well as a recommendation from the Council of the EU to tackle homelessness.
In the meantime, the Commission’s ‘umbrella’ communication presented on 16 December should set out a series of actions to boost the construction and renovation of housing and to work towards more affordable construction.
In response to requests from local, regional and national authorities and stakeholders, this will include revising the rules on state aid to facilitate the financing of affordable and social housing.
Middle classes. Under current State aid rules, the Commission writes, Member States can support social housing in a flexible way, in accordance with the Decision on services of general economic interest (‘SGEI Decision’), for the benefit of disadvantaged and socially vulnerable groups. This support does not have to be notified to the Commission. However, support for affordable housing is capped at €15 million a year.
To facilitate support for affordable housing for low- and middle-income households, including essential workers, disabled people and students, the Commission should therefore revise the ‘SGEI Decision’.
This “expressly includes a new category of affordable housing among the categories exempted from notification for which there is no maximum compensation cap. In this way, Member States can maintain their existing social housing schemes and create additional affordable housing schemes for other target groups”, explains the document.
This measure will allow Member States to support affordable housing projects without prior notification or authorisation from the Commission, where the conditions set out in the ‘SGEI Decision’ are met, or to define the support arrangements, target groups, eligibility criteria, housing prices and quality standards for social and affordable housing according to their context and needs.
“To increase the supply of housing, in parallel with the construction of new homes”, the simplification of administrative procedures will be another lever for action, with more flexible use of existing rules.
As far as funding is concerned, the Commission is proposing to stimulate public and private investment in housing. In the third quarter of 2026, it will propose the creation of “a new Pan-European Investment Platform for affordable and sustainable housing, including a digital portal, an expert group and national hubs”.
Finally, it will involve mobilising new investment for housing under the EU budget, including an estimated additional €10 billion for 2026 and 2027 under the InvestEU programme.
Link to the provisional project: https://aeur.eu/f/jzx (Original version in French by Solenn Paulic)