Special committee on the Housing Crisis in the European Union Ordinary meeting
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HOUS European Parliament
Follow its sittingsSpeaker 4
So, I think a couple of things are interesting to point out here. First, in all OECD countries except three—Finland, Korea, and Italy—on the far left, in all other countries, we've seen... Sorry. It doesn't work. It doesn't work. Okay.
I'll just say it vocally then. In all other countries except three, we've seen an increase in house prices over that period. And in some countries, those on the very far right, the increase has been quite significant. So I think that's maybe a first point that we want to make. And, of course, the period here, 2015 to 2024, is chosen.
We can also compare it to other years. But I think this gives you a good sense that almost across the board, in countries, we've seen a jump in real house prices. Next slide. Great. That's much more efficient. And then it's important that we drill down even further.
So, what's happening within countries? Because national averages obviously hide a lot of the differences. So my colleagues in the OECD Center for Entrepreneurship, SMEs, Cities and Regions look at subnational levels. In terms of house prices, what we can say is that there are huge gaps between house prices in different cities. So that's the top bubble in every country. And then towns and suburbs would be the center one, which is technically blue, but I don't know if you can tell that.
And then, finally, rural areas are in green at the bottom. And what we know is that on average, across countries, housing prices in cities are around 63% higher than in towns and suburbs, and around 135% more expensive than housing prices in rural areas. And on the left of your screen, you have Finland, Denmark, Hungary, and Norway, where you see the biggest gaps between the prices in cities versus towns, suburbs, and rural areas. We're going to try this again. There we go.
Great. So, of course, what does this mean? What are the impacts on households? One of the main indicators, not the only one but a big one that we look at at the OECD, would be how much households are spending on housing costs. And what we can call the overburden rate: households that are spending more than 40% of their disposable income on mortgage or rent.
So here, we're just looking at a, you could say, a narrow definition of housing costs: just mortgage and rent. We're not looking at utilities. We're not looking at maintenance or any of those things. It's really just the narrow understanding, the narrow definition of housing costs. And again, two things to look at here.
First, just the bars, the green bars. This chart is only showing the overburden rate among low-income households and those households in the bottom quintile, the bottom 20% of the income distribution. And so, if we look at all households, all low-income households, we can see that on average in the OECD, it's around 30% of low-income households that are overburdened by housing costs, and the share is a bit smaller in the EU, around 23%. Sorry. 23%. But the other point I think is important to point out is the little triangles, which represent the renters in the private market.
And in almost all countries, what we see is that renters have a much higher rate of overburden than the rest of the population. I apologize. And we'll come back to this discussion of renters in a minute. One of the other important things that we need to look at, in addition to income levels, is also young people. And this is something that is a main priority concern in a lot of countries.
And here, we can see, if we just look at young people in their twenties, so from 20 to 29-year-olds, the share living with their parents. And, again, we see big differences across countries, with a handful where even over 70% of young people are living with their parents. And you have a much different situation in Sweden, Norway, Finland, and Denmark, where we're talking about 20% or less. And I think one of the things that we've worked on in this space is that, of course, this is not only a housing problem for young people. It's not just the challenge of housing, but it's also certainly about the labor market and other kinds of employment and economic conditions.
So it's not only a housing solution that we need here, it's kind of across the board. Another way that we measure housing affordability is by asking people what their concerns are. In a survey that we've run at the OECD since 2018, the Risks That Matter survey, the most recent round of this was 2024. We ask people in 27 countries about their main concerns in terms of economic and social issues, how they feel their governments are doing in terms of social protection, and what their preferences and priorities are for the coming years. So one of the things that stands out from these results is that there is quite a large share of the population surveyed who report that they are concerned or very concerned about not being able to find or maintain adequate housing in the next year or two. But interestingly, and probably not surprisingly, it is generally in most countries a much higher share of young people.
Here, we're looking at 18 to 24-year-olds who report concerns. I apologize. Yesterday, I didn't have a voice, so this is actually an improvement. I think another key topic that we're working on, and I think is pretty relevant as well for the discussion today, is the issue of homelessness. We've done quite a bit of work on this at the OECD, both in terms of the data, the measurement side, and also the policy side.
And I think we are also doing additional work underway. But what we can say is that as of 2024, over 1,000,000 people in the EU and over 2,200,000 in the OECD were experiencing homelessness according to government data. This is a high number. We're also quite confident that it's an underestimate, and probably a significant underestimate. And there are quite a few methodological challenges in how we measure and compare homelessness in different countries.
We have quite a bit of discussion of this in various papers. If you're interested, I could talk about it for a very long time, but I will not. But I think the important point to say is that there's quite a big diversity in how people experience homelessness. We can think of people who are sleeping rough in public spaces. We can think of people who are staying in temporary accommodation and shelters, but also those who are staying elsewhere.
You could say couch surfing or hidden homelessness. Those that have less visible forms of homelessness. And depending on the country, different groups will be included in the official definition and in the official statistics. And that leads to the second point: there is no single harmonized international definition of what it means to be homeless. And there is a difference from one country to another regarding who is included and who might be left out.
We do use the Ethos Light typology at the OECD, which was developed by the European Commission and Finance in 2007, I believe, and it is a very useful tool. It is not perfect, but it is a useful tool. And that can certainly help us at least measure and compare, to some extent, across countries. But even so, there are quite a few differences in how the data are collected. What types of street counts are we using?
Are we using surveys? Are we going to different shelters and asking them about the people who use their services? So, quite a few differences. We also know from the research that there are specific groups or housing situations that are not well covered in the data. Women tend to be underestimated in homelessness statistics.
And we know in the reported data, depending on the country, children may or may not be included in official data on homelessness. Migrants may or may not be included. So we can have very big differences in the numbers that result. So, as we understand, there's an updated resolution that was adopted in December. And, of course, this would be a very nice opportunity to strengthen data collection on homelessness and really serve as a foundation for evidence-based policy solutions.
And again, on the left of the screen, assume the slides will be shared afterwards. You have links to all of this work if it is of interest to you. And now I'd like to make a little transition between data and policy. I'll do this for the remainder of my intervention, but we are nearing the end. So first, I think it's probably no surprise that in most countries, homeownership is the dominant tenure type across the EU and the OECD. And there are many reasons for this, but I think the one I just want to highlight is that in many countries, it's really been a policy choice.
We go to many countries to say, "Oh, but it's very cultural," and yes, but it has also been very much supported by public policies over the past decades. And that's okay, but it also has led, I think, one of the big words when we're talking at the OECD about housing policies is trade-offs. And so what we can see is that this has brought benefits in terms of increasing rates of homeownership in past decades, but now we're seeing some of the limitations of that, especially the impacts on renters. One of the key points that we also, I think, is important for the conversation is what has happened with housing investment in countries over the past decades. And I think these two charts really help to understand why we're, to some extent, or at least part of the reason why we're in this challenge of housing affordability is a bit of a supply problem, in that we have dropped. At least you can see, in the mid-2000s, there was a huge drop following the global financial crisis in housing investment, and then again following the COVID crisis.
So, what does this mean? When we stop, when we have a drop in housing investment, we end up having a supply problem, and that supply can't keep up with demand. So the chart on Chart B shows that the share of consumption spending on housing has gone up to a much greater extent than other spending items for households between 2000 and 2023. One of the ways in some countries that governments try to address the supply challenge is through the provision of social rental housing. And I think here the message is simply that, of course, in a few countries, there is a pretty sizable stock of social rental housing, but in most countries, it's very small, less than 5% or even less than 2%. In terms of the policies, what we do in the affordable housing database, through a survey that we circulate to countries every two to three years, is map the different policies in place that governments have, with the aim of improving housing affordability.
So, I won't go into the details here, but the main message is really that there are quite a few types of policy schemes to support homeowners, some to support tenants, and a few that are tenure-neutral, you could say. But the message again is that there has been quite a bit of support for homeownership. And what we've seen is that oftentimes these policies can be regressive in that they support middle- to higher-income households rather than the lowest-income households. And we, to some extent, understand the challenges today for many tenants. And the last point I wanted to make is really that I think what we try to do with all of this different cross-country data at the OECD, when we're working with countries, is taking that but then really working within the policy context and the constraints and priorities within each country.
So one of the things we've done more recently is working with a number of countries on the issue of funding and financing more affordable and social housing. That's a big question to address this supply problem. And the response here is that there is no one way to do it. And so we've looked at countries that have done a relatively good job of this over many decades, looking at, for instance, the institutional setup, what types of policies they have in place, what types of legal frameworks, who the actors involved are, also the different funding and financing instruments they use, and then what types of housing they are actually delivering through these processes, as well as how they are managing and monitoring the units, and how they are using that data to rethink their operations. So just to say, as a conclusion, that the work we do on comparable data, on cross-national data for us, is really a means to jump into each country's context and understand the specificities because, unfortunately, there's no one way to address this problem.
But we do think that there's quite a bit that can be done in terms of boosting the supply of affordable and social rental housing. And here, I have quite a few links to documents and databases, should that be of interest to you. But I will stop there for questions. Thank you.
Irene Tinagli
Thank you. Thank you very much. This is really interesting. So now we open the floor for questions from our MEPs, and we start with Nicolas Brunjak from the EPP. Thank you, Chair.
Nikolina Brnjac
I would like to thank you for this interesting presentation. We are aware that affordable housing depends on employment, social conditions, and financial aspects. This also has an influence on the attractiveness for the labor force, like, for example, medical doctors. We have to work on various policies, but we need data in order to analyze them. This is where the EU and OECD could cooperate to share data and indicators.
The European plan for affordable housing has, as one of its aims, the collection of housing statistics in order to work on these issues based on data. OECD statistics are a great tool, but we have to make a step further because it is not only about markets. We have to analyze the causes of the crisis in order to respond in the most efficient manner. I would like to share an example from Croatia regarding tourism. We are trying to reduce the number of short-term rentals in tourism when data shows this is necessary.
In this way, we are trying to influence prices and housing supply. This is the way in which we can do more and solve this challenge that influences not only Croatia but the entire EU. Thank you.
Gabriele Bischoff
Thank you very much for the presentation. I think it's very clear that this will help us to base our proposals also on the empirical data that we could get, and also to see. I think here the OECD survey is very helpful. I have a question because you referred to the data problem in terms of homelessness. If you are aware of different surveys that were conducted in different cities. For example, in my city, Berlin, in 2024, we did a big survey really on the ground analyzing homelessness, with very interesting results. Not only do we have real numbers now, but also, for example, that we have more than 55,000 homeless people in the city, 47,000 in shelters. We also looked at hidden homelessness, as you were saying, and collected data showing that it doubled from 2022 to now. Additionally, we have data indicating that we will lose a lot of social housing due to conditions until 2034.
So, if no new social housing is constructed, this will increase. So, do you also have an overview of different sorts of surveys in certain big cities to use this? And my other question would be: I think it was quite interesting what you said and what you showed in your last slide on the different examples from Member States. As you said, there is no magic ballot, but are there more recommendations that you could give, especially as we are working on our housing report on compromises? Something where you say, "You should take this on board"? Thank you.
Irene Tinagli
Thank you very much. So now I give back the floor to Mrs. Plong for answers.
Speaker 4
Thank you very much for these questions and these very interesting points. Yes, I think maybe just on the first one, there were two that I picked up. First, on the links between housing and the labor market, and of course, housing and access to services, including medical services. And I think we were talking before this began. I believe Eurostat is working a bit on that.
I have colleagues also at the OECD who are working on this issue. And that's a key one as well. I wasn't able to go into it today. But in terms of the possible medical deserts, food deserts, things like that, understanding what those implications are and what policy can do about it is certainly an area of great interest. On the question of tourism and short-term rentals, this is something that we are discussing with a lot of governments.
In some cases, there is relatively good evidence of the impacts of short-term rentals on the housing market, on the long-term rental market, and on housing prices in specific areas. In some places, we do not have that evidence yet. And in fact, we were in Croatia, I think, in November in Zagreb, discussing this very topic. So I think what we can say at this stage is I would not say we have the right policy response because we need to have a better understanding, at least across the board, of what the impacts and implications of short-term rentals are. And so, we're going to need to have very targeted responses.
So, I don't have a policy solution I can give you, but I can say that this is certainly something that we're working on individually with countries to address. The very interesting questions from Germany. Yes. We are aware of the different, well, perhaps not every, survey that's been done in cities, but certainly many of the surveys that have been done. And I'm not sure if this particular one was part of the pilot project with the European Commission that was done in a number of cities over the past few years.
And as you say, these are vital exercises to understand what the situation is in some of the cities and towns. And they are key complements to the data that we can maybe get at the national level through other means. And certainly, it's a way to understand a bit and to assess this issue of hidden homelessness. That's another thing that we're working on at the OECD, in particular with Germany, to understand how we can better measure people who are less visible in the statistics. And so, hopefully, we'll have some interesting findings coming out of that work. And the final million-dollar, million-euro question is: what recommendations can we give?
I think maybe I can answer this in the following way. What, of course, I think the first point is that we certainly need to.
Speaker 4
Aware that whatever we do in one country isn't necessarily going to be transferable 100% somewhere else. There are very different context constraints, priorities, etc. So, I think that would be the first point. But maybe a more satisfying response is two things that we're looking at when we're working with governments right now: really looking at how we can do a better job and how we can expand the supply of affordable and social rental housing. That seems to be a really big demand in many countries.
And we have two ways of thinking about that. One way is: how can we build more? So what are the current obstacles to developing new affordable and social rental housing in countries, whether that's, you know, looking at spatial planning or permitting? Those are things we can think about: construction costs, how to address rising construction costs, and also renovating units as well. The other thing that we're looking at is how we can make use of the existing housing stock, so the privately owned housing stock, and make that more potentially open to people who might want to rent at affordable prices.
And so this can be done, for instance, through social rental agencies or other schemes where you're incentivizing property owners who are not using their properties. They may be vacant, or they may be in need of a bit of renovation or repair. So how can you incentivize those owners to then go into leases with social tenants by guaranteeing rent at an affordable rate? So these are some of the things I think we're looking at, but I would say very much focusing on the supply. How can we increase the supply? And of course, that has a bit of a cost, you could say, and perhaps one of the things we've seen in our work is that, as I mentioned during my intervention, there's been quite a bit of support for homeownership, which is not necessarily a problem, but it's just that often this is very expensive.
Often, it goes towards higher-income households. And so, there is a trade-off to that. And so what we're working with many governments now is looking at this issue of affordable and social rental housing and how governments can make that more of a priority. Thanks.
Irene Tinagli
Okay. Thank you very much. Now, we move on to the next MEPs for questions. I give the floor to Antonella Sberna for ACR.
Antonella Sberna
Thank you, Chair. I will speak in Italian. Thank you.
Thank you very much, Madam Chair, and thank you to our guests for being here. The OECD's work, in particular on the issue of affordable housing and the link between housing and social rights, offers us an analytical basis to tackle the housing crisis. From the data you've presented, it's clear that, and this is something that we share, housing has become a structural economic factor with direct effects on employment, the mobility of work, demography, and land. When housing is not affordable, people do not move. Companies find it hard to find workers, and entire regions lose competitiveness.
Another central point in your analysis is that just intervening in demand is not enough, and you said that very clearly. So, without strengthening supply, we may be spending a lot of money for very little. So, we should work on urban regeneration using the existing housing stock, looking at the conditions that encourage investments in housing. The Italian experience shows how important it is to work regionally. Housing needs change drastically between urban touristy areas and rural areas, so it's important to have that perspective.
The EU can, of course, help to facilitate access to funding, but we can't substitute regional management. So, we need more subsidiarity, and we think that's the path to tackle the housing crisis, especially given the facts you have presented to us. So my question is: looking at the Italian case, the OECD, what kind of policy levers would the OECD think could be strengthened to increase the supply of affordable housing, at the same time employment and territorial cohesion? Thank you.
Ciaran Mullooly
Thank you, Chair, and indeed thank you to the OECD, excuse me, for the analysis presented today. I want to focus my intervention on the intersection between housing, employment, and social policy. And I suppose how strategy is important, and how policy can sometimes backfire. Because I want to use an example from my own member state of Ireland that illustrates how sometimes good intentions can have unintended consequences. Ireland has recently introduced legislation that effectively, outside of modest increases, freezes rents for up to 6 years in large parts of the private rental market.
The objective is very clear. It's understandable. And when intended, it's to protect tenants during periods of housing stress and the cost of living crisis. We're all in favor of that. However, early evidence shows that the opposite is actually true.
Small and medium-sized landlords, who make up the majority of the Irish rental sector, are beginning to exit the market in significant numbers. It's making things worse. They are responding to a change in a system where, from their perspective, rising costs and decreasing revenues are making their business model no longer viable. Now, this has knock-on effects, which are detrimental to housing supply and, in turn, increase the cost of rent. Furthermore, this has the potential to increase pressure on the state's provision of housing where supply drops below a certain point.
So, I suppose my question is: I'd welcome the OECD's reflections on how member states could strike a better balance, protecting tenants without hollowing out rental supply, and ensuring housing policy supports both employment and social inclusion. And I want to apologize for not being here to hear your answer. I am going to a vote in the Pech Committee, but I will be taking very close note of your response. Thank you.
Irene Tinagli
Thank you. Thank you very much. I have one last speaker registered, and I give him the floor right now. Gordon Bosanas for the Greens.
Gordan Bosanac
Thank you, Chair, and thank you for the presentation of OECD data, which are actually in line with the other presentations we've been looking at, especially regarding youth policies and problems. You are confirming some of the data that has already been presented to our committee, which is very good because we have strong evidence-based data on which we can develop the policy. Yes, I was actually interested in the slide where it shows that traditionally most of the countries of the OECD were developing policies which focused on supporting homeowners. And that was traditionally very visible. And I see this also in my country: when the state wants to solve the crisis, they focus on how to support homeowners, how to subsidize the rent, how to subsidize the mortgages, etc.
But do you have any? You mentioned in one of your answers that this approach is actually one of the approaches that contributed to the escalation of the crisis. So what we need now is a big game changer, really understanding that this can no longer be the solution. Unfortunately, we are seeing this continue. And in my country, I'm not going to the concrete example, but still, when the states try to do something, it always goes in the direction of supporting the homeowners. No one is talking about increasing the taxes, but, you know, how to get more money and to build more.
So, that's the first question. How do you see it? Is it possible to overturn this trend? The second point you also mentioned is that it will be necessary to build more but also to mobilize the empty stock, etc. But my question is, when I compare to your first slide where you said that actually we have a huge housing crisis in cities, where do we build?
So, we can say we will build more, but yeah, really, where to build? And are we really going to this dystopian future where Europe and other countries will have only megacities? And that will be the way people will live in the twenty-first century. So, what can be said about this build is to build more, really, to see how we can distribute these attempts to build more. And my last question is about the data which you haven't shown, but I don't know, do you have this data?
The amount of the profits stock or being in the housing business really gained you a huge, significant profit. And this was very attractive to invest in the properties because people were thinking that in a short period, they could actually earn a lot of money. But then we've been seeing some models, as in Vienna, which were explaining to us that profit will also be there if we are looking and working long term, and not expecting to get a significant profit in a short time, but trying to also change the paradigm and invest to get the profit not in one or two years, but in thirty years. So, have you seen in the member states of the OECD this trend? Is it possible to change this trend of gaining a lot of profit? Thank you.
Sorry for being a little longer, but yeah.
Speaker 4
Great. Thank you very much. I will try to address the various questions. So I think the first one is kind of the policy levers to increase the supply of both affordable housing and employment. I would go back, I think, to this issue of a bit more focus on renters, on rental housing, because, as it's been mentioned, that can be better in terms of labor mobility.
And so that tends to be, not certainly the only thing that needs to be done, but from a housing perspective, I would say that that is one. Talking about rental housing, both private market rent, market rate rentals, but also social and affordable rentals. The very interesting question from Ireland on the unintended consequences of well-intended policies such as rent controls. Yes. I would say generally at the OECD, we would not be in favor of rent controls because over the long term, they can have these types of outcomes. Often, it's a matter of, again, I said the word trade-offs.
It's a matter of short-term assistance for longer-term problems. And not only that, there's the issue that, depending on how the rent controls are designed, they can help a few at the expense of many. So generally, we are not in favor of rent controls for those reasons. How can we better protect tenants? That's an excellent question.
And I think there are different ways that we look at to do that. Part of it relates a little bit to one of the last interventions about changing the policy paradigm. But even before we change the policy paradigm, there are maybe some smaller things we can do. One is, of course, looking at the current state of rental regulations. So, kind of the relations between the different rights and responsibilities of tenants and landlords, and making these as balanced as possible.
We're not arguing to go in either direction of too much protection for one or the other, but making them as balanced as possible so that tenants have the confidence that they can have a reliable and affordable rent, or at least a rent price that they will be able to count on. They will have a lease term that they know. It's, you know, not very common; they can't be evicted for no reason at all. But meanwhile, landlords also have some protections. So I think one that's an important one to think about in terms of better protection for tenants and then doing everything we can, as I mentioned, to increase the supply of affordable and social housing without using measures like rent controls, but other means.
For instance, I mentioned social rental agencies and, of course, increasing the overall supply of social housing. There were a series of questions about, yes. Oh, can we, is there hope to change the trend in supporting homeownership? So, I mean, yes, I think there is certainly hope. And maybe a few elements of response to that.
The first is that not every country has this type of approach. There are a handful of countries in the EU that have had more of a trend in support for renters, or at least more balance. So, it's not to say that this is inevitable. The second point is that some of the most impactful policies support homeownership, thinking here about tax incentives and subsidies. Of course, as I think you were getting at, it's very difficult to take some of these away once people have them.
But it has already been done. And I think what we have seen in countries that have been successful—it's not easy—but countries that have been more successful in doing this, and kind of relieving, you could say, or reducing some of these advantages for homeowners, is that they've done it in a very phased, progressive approach. So they can announce what is going to happen, and over time, they can work towards that. It has been effective. It has not been easy.
So, I would say it's possible, yes. And finally, no, there were two more. Building, so mobilizing the existing, okay. I think this was the question about, you know, how do we build more in cities that are already quite full, when you have land constraints. No.
These are important points. It's hard to give a statement across the board, but I think the general thing we would say is that increasing density is generally a good thing, but of course understanding the impacts and the costs of increased density in cities, mobilizing the existing stock. Even in very dense places, we see that there is quite a lot of underused residential stock. So the extent to which there can be tools to bring this into the more active market would be important. Of course, renovations and rehabilitation of existing buildings so that they can be brought up to standards would also be important.
And then there are questions depending on the country and the priorities and objectives, which is how you then also think about, you know, less urbanized areas and to what extent, you know, it's not only about bringing housing solutions to perhaps less urbanized areas, but also thinking about the economic and social policies that you need to accompany that as well. Your final question about the existence of data on the profits: we do not have that data, unfortunately. But you mentioned Vienna and Austria. Indeed, it is one example of a country where, I believe, because of legislation, they limit the amount of profits that you can get, at least for a certain share of the limited-profit developers who make up quite a large portion of affordable housing developers in Austria. And that amount of profit is limited, and it must then be reinvested in new affordable and social housing. So it's a very interesting and, so far, quite effective approach—not without its challenges, but certainly very effective.
Thanks.
Irene Tinagli
Okay. Thank you very much. Now I give the floor to the European Commission and to Ruth Passerman from DG Yenpoo.
Speaker 14
Thank you very much, Chair, and thank you very much to the colleague from the OECD for a very interesting presentation, which really, I mean, we are really hungry for data and mapping of what is going on in the member states. So, thank you very much. As you know, the European Commission has stepped up the work on housing by launching a European affordable housing plan in December. And so, there is a recognition of the problem and its wider implications. It's not only about housing, but it is indeed also about labor mobility, access to services, and actually also, in a way, increasing competitiveness, because if people can move to the areas which are more economically active, it improves the overall productivity of society.
So this, but like you said, it's a very tentacular problem that you have to look at from various angles, and there are many cases of unintended consequences of various well-meaning policies. So we really do have to take a whole-of-government approach. Now I'm coming from DG Employment, so I'm more interested in really the weaker in society. Those that typically do not are not homeowners and would like to access social housing and perhaps also have a problem of homelessness. Now, one of the things that was clearly recognized in the commission housing plan is indeed the need to increase supply, both, like you mentioned, with the construction of new builds, but also with the renovation or recycling, if you want, of existing buildings.
Notably, there is an excess of office buildings in many of our cities at the moment, and they can be transformed into apartments. What is also important is that we maintain the logic of mixed neighborhoods. We don't create ghettos. So it's not really that we're thinking so much about the development of ghettos on the borders of the city. But if you create something, it has to be a new settlement, which is fully, I wouldn't say self-sufficient, but it has schools, medical facilities, and a supermarket.
I mean, that it can be for people, that it is not just, you know, sleeping quarters, like a ghetto kind of thing. We have examples of good, actually good use of what we call social economy housing. So basically cooperatives, or I think maybe similar to what you mentioned—what was the word that you used? I can't remember. Limited or profit social supplies.
Anyway, we have examples in France and in Belgium. Austria is, of course, the main country that has this approach, where social rental agencies act as intermediaries between private landlords and marginalized groups. And this creates something which actually avoids the financialization of the housing sector and allows more access to housing for more people. We're also working specifically on the issue of homelessness. The colleagues and the problem that you identified on the date, I think we are all very aware of it.
At the same time, we really have good examples of policies for getting people out of shelters and unstable housing solutions, such as couch surfing, which is mainly what we call the Housing First policy. This policy is basically about making sure that homeless people are first given a stable place to live before addressing all the other problems they usually have, like unemployment or addiction problems, etc. And in these cases, of course, housing first requires that you have available housing to put these people in, which brings us back to the issue of supply. I just want to say that I agree with your point that it is a very complex issue, and the solutions are very local. And what may work in one country or city may not work in another country or city of the same country. So there are a lot of differences; it's very important to look at the national and local regional differences.
At the same time, I do believe there is a margin for learning from each other in Europe, which is why, also in the affordable housing plan, we have launched a plan of mutual learning so that we can at least learn from each other. And I think, yes, that's what I wanted to say. Thank you very much. And my colleagues from the commission, from other services of the commission, will continue in the next round on knowledge sharing because they are the ones who get all the information for us. Thank you very much.
Irene Tinagli
Okay. So, thank you. Thank you very much. So thank you, Mrs. Plant. Thank you to all the MEPs that have intervened, both parts and mine as well.
So this has been a very interesting presentation. We need data. We need evidence. We need practices to see what worked, what didn't work, and what we could do. Of course, being aware of the fact that despite this common problem, there are differences.
But if we don't have the elements and the instruments to understand these differences and how to intervene, it will be very difficult to tackle the problem. So, thank you very much. So, this exchange of views is concluded, but we will continue. We continue with the presentation by Eurostat of the 2025 edition of the interactive publication, Housing in Europe. So in this respect, I would like to warmly welcome colleagues from Eurostat, and I thank them for joining us today.
Siguita Gueske, Eurostat Head of Unit on Income and Living Conditions, Quality of Life, and Jose Domingo Martinez Solano, Eurostat's Deputy Head of Unit on Population and Migration. So, just before giving the floor to our experts, I would like to make a few brief remarks. We already had a very useful exchange of views with Eurostat in our committee last May, and we were very pleased to welcome them back today. This continuity of dialogue, I think, is very valuable because data and statistics are essential for working on housing. And as we go on with our work, we realize new and further details that we may need.
So, I think that, as I said earlier, it's very important. Without reliable and comparable statistics, we cannot fully understand the problem. And of course, we can't design effective solutions either. So, we welcome Eurostat's work on new housing statistics and a dedicated housing dashboard, which will be essential for shaping and monitoring European responses, including the European Affordable Housing Plan. So now I give the floor to Mrs.
Siguita Gueske for five minutes, followed by Mr. Jose Domingo Martinez Solano, for another five minutes.
Speaker 15
Thank you. Thank you, Chair, and good morning. We have the pleasure to be here and to present a work by Eurostat since May last year. So, I would start by saying that Eurostat is providing a wide range of statistics, and housing statistics have been in focus, in particular during the last year. And we have a lot of different users: statisticians, researchers, the general public, and policymakers.
And recently, we were working very closely with the European affordable housing plan for statistical evidence and data. And there were just these four highlighted figures where we start the presentation. And there were also the main ones, which were outlined by the European Affordable Housing Plan. It is at the EU level. So, as you see, house prices increased by 60% over the last decade, average rents grew by 20%, and residential building permits decreased by 20% since 2021.
At the same time, the unoccupied dwellings, the latest number from 2021, shows it at 20%. So, this is just an insight. When we think about housing, we actually think it concerns many aspects of life. And, as housing itself is, statistics itself is also very diverse. And we have gathered those five main statistical themes on housing statistics.
One is macroeconomic factors like national accounts, where we have investment in housing, consumer prices, housing prices, house sales, and price level indexes. We also have a social perspective where affordability is considered. We have housing, population census, living conditions, housing deprivation, labor force surveys, so how many people actually live in the housing sector, household and budget survey, and what people are spending on housing. The answer is that we can see a lot of differences across the households, areas, and many other socioeconomic aspects. There is also data on houses, housing in business, statistics like tourism, business demography, short-term rentals, and foreign direct investments.
As well, it is not the least, and it is also very important: sustainability. So, energy and environment, statistical domains, are also an essential part of housing statistics. And we also have hospital data, building demography, and grid data. So, just at the end of last year, in November, to help users better orient themselves in the housing statistics, we created a landing page where we put all relevant information on housing statistics. So it has an overview section, the database, visualization, where we have done different indices, visualization, a list of publications related to housing information and data, very importantly, methodology on how each dataset is collected, and also links to quality aspects of each of the data as well as the legal basis to collect the corresponding data.
So, where I would really like to put more emphasis today is on the database. So when you go to this site, you have direct access to the Eurostat online database, where data from more than 14 different statistical domains are published, and we are speaking about more than 200 different indicators. So you have direct access there, but that's not all. We also have access on the website to Census Hub, population census grid, and census dwelling grid. So, when you go to the database, there are different tabs you can open, and we try to put as many differentiating topics as possible so that it's easier to navigate the web page.
Then, the three elements which are also in the data tab on the website are: census habit, advanced queries on dwelling and demographic characteristics, population census grid, census data available in one square kilometer grids, and the census dwelling grid total number of conventional dwellings in Europe recorded in the 2021 census at a resolution of one square kilometer. So in November, we also released our annual and very popular publication, the Housing Interactive Publication 2025. And there, you can find different information in a very user-friendly manner, and you can interact with the publication by choosing countries and different indicators. So we are really welcome to look at this publication. It has data on prices, rents, size of dwellings, quality of dwellings, and ownership of dwellings.
Of course, it's not a full representation of 200 indicators, which are in the database, but we consider that it's a good summary of the most important indicators. What is new in the publication of 2025? The latest data show discrimination in housing when people are looking for housing. And this data comes from the six-yearly module in EU-SILC, so statistics on income and living conditions. So, unfortunately, it will not be available every year, but it is available for the first time.
And it shows discrimination: the share of people who felt discriminated against when looking for housing, and there is a huge difference between those who are at risk of poverty and those who are not at risk of poverty, the ones who are at risk of poverty. For most countries, it's much higher. These are the people for whom the disposable income is less than 60% of the national median. So these are very interesting data, and the country situations are also quite different. And there are countries where the differences are very huge.
So this is new data, published for the first time. And further, on the data subject, I will give the floor to Domingo.
Speaker 16
Thank you very much. Good morning. It's a big pleasure to be back here again. You can imagine a statistical office. It's very important for us to see how much the European Parliament is interested in and hungry for data in order to have evidence-based policies.
It's a great pleasure for us. Let's take a look at some data. We would like, of course, to cover extensively the large set of data that Eurostat is making available to all users on housing. We just want to give you a glimpse of some important indicators and to build up a bit on what our colleague from the OECD, in her excellent presentation, already delivered. Investment in housing is a big topic to address.
And here, we can observe again the big differences between countries. So it can range from even 8% of the GDP, but some countries are above 6% of the GDP in investment in housing, while others have investment in 2024 below 3%, even below 2.5%. It's again a very important issue where differences between countries, regions, and local aspects are very relevant. It's a problem that the housing issues must be analyzed in a very targeted and focused way. Very importantly, when analyzing affordable housing, it is, of course, necessary to take a look at the evolution of prices.
We are here telling the same story as the OECD colleague. We have seen large increases in prices. This is the house price index quarterly data, and this is the rate of change in the annual rate of change in every quarter as compared to the same quarter. So the same quarter of the previous year in the past 10 years. We observed increases that can reach double digits.
So, some quarters had increases in prices of over 10%. And in all this period, house prices have increased by more than 60%, which is well above the increase in income. We could take a broader look together at the increase in prices as it relates to the increase in all costs. And we can put this as related to the disposable income. And in our data, we can also choose the disposable income of the different people.
And there, in the green bars, you can see those who have low income, income below 60% of the median. And in those cases, we can see that the share of housing costs is very large, again with major differences between countries. But we can see that in some countries, the share of housing costs for households with low income is above 50% of the disposable income. So there, we can see that housing costs are a major part of what households dedicate their income to. And of course, when taking those households where the income is above 60%, the figures, which are represented by the blue bars, are much lower.
But this indicates an important indicator of how housing costs represent a big burden and a large share of the total income of European families. Again, this is something that we have been analyzing and that was discussed a lot in the previous presentation from the OECD colleague, which has drawn a lot of attention. It relates to ownership and tenure status. And we try to analyze this by providing further granularity. We have four different colors for each country: the blue color represents when they are owners, and the red and orange colors represent when they are tenants. And then, we have two different colors in each case.
So those owners who have a mortgage and those who don't have a mortgage. And in some cases of tenants, we have those who are in the free market and others who have a reduced rental price. And this again shows big discrepancies between countries. But the distribution of that population is very different. We see the predominant ownership in some countries, which goes even beyond 90%, while in some cases, a very telling example is Germany.
Rents: the tenants represent a higher share. This provides a very good overview picture and again focuses on differences between countries. And it's a very important issue to take into account when conducting a broad analysis of housing elements. We would like to complement these two previous graphs with a regional picture. We provide, at Eurostat, very granular geographical data.
The map on the left shows two regions for owner-occupied dwellings. So there, we can see that we represented at the national level in the previous chart, at the regional level. And again, we see very big geographical differences. If we look at Eastern countries, for example, the share of homeownership is very large. And then, the map on the right provides further regional granularity.
So that's not three-level regions, and it represents the unoccupied dwellings. This has also been a big issue for analysis. You were discussing before the policy needs, the need to mobilize; some members of the European Parliament were asking to mobilize the empty stocks. So, this data shows the percentage of unoccupied dwellings, which in the EU averages around 20%. And here, again, we would like to focus on the regional discrepancies.
And this is very granular data at NACH3 regions' level. We also provide aggregated data at Eurostat. So we divide the territory of the European Union into one square kilometer little squares, and we have some data on dwellings and buildings that focus on that. And in cooperation with our colleagues in the JLC, who are going to present after us, we have dwelling sensors on these grids, which provide very rich data and are very important for analyzing housing phenomena. Another big topic has been short-term rentals.
We have seen an increase in the nights spent. Again, the EU totals, that is what we are showing here, do not reflect the whole reality. And here, I'm not going to extend myself more because our colleague in the commission at the Joint Research Center will focus in his presentation later on more focused, more targeted data analysis on short-term rentals, nights spent, and also how much that represents of the total stock. We have been working together with different commission services to provide very good and useful data on this subject to the users, not least to the policymakers and lawmakers. So, we are very happy to go into that.
And finally, another very important element that is drawing attention and that has been mentioned in the discussion with the OECD colleague relates to the housing supply and to the permitting. That's again a big issue. And we provide this data: the building permits. It's in real estate and in the total construction sectors; there is very rich data on that matter as well. We show again the time series for the last 10 years in this graph.
We have seen that since 2021, building permits in the European Union have been decreasing. This is again a very important element to take into account when analyzing. Just with that, I finish the presentation, but I would like to take up or reply to show some good news to one of the members of the European Parliament who made a question on the profits of the construction industry before this data was available at Eurostat. So, we have the gross operating surplus for the construction industry and also for real estate services. And this you can find on our website.
We are happy, of course, to provide the link. We also have net turnover, gross added value, compensation of employees, and its detailed breakdown. So it's very rich data, very granular information on that topic as well, that we are happy to put on the table for the policy discussion, which I believe provides very relevant elements. Thank you very much. And we would like just to summarize: we are a bit over time, but for our next steps, we are very happy to have delivered what we promised in the presentation we made in May 2025.
It looks like a long time, but it was only a few months ago. In the meantime, we have published our web page. As Sigita has mentioned, we have streamlined statistics. We now have this whole database on housing statistics, and we would like to continue improving it. We will publish a dashboard in the coming weeks. And, most importantly, we are communicating. We are constantly discussing with all data users, most notably with policy makers and lawmakers, to further develop, to streamline what is already available, and to adapt to this large dataset, the large set of data already available at Eurostat.
And we would like to use new data sources. We are working on that to develop new statistics, which we believe would be very important to address this very big concern for all the EU CDS, as it is a big concern, especially for young people, as the OECD has explained before and as this committee already shows. Thank you very much. And now, we are very happy to take up any questions you may have.
Irene Tinagli
Thank you. Thank you very much. Now I have a request for the floor from Marcoviers Ligai for S&D.
Marko Vešligaj
Thank you very much. I would like to thank you for all the data you have presented. I would just like to share a brief comment with you. We've heard a lot, and we have to digest it. But one thing is sure.
Based on everything we've heard, we would need a commentary on public spending: how much public money has been spent. And, for example, when it comes to GDP share, how much public money has been used? Why am I talking about this? Well, it seems clear to me that it is the private sector that is the major funding force behind this. And perhaps we should think about housing as a source of profit that should somehow be tackled.
We have a new commissioner for housing in the European Commission, and it has been said so far that there will be some guidelines for the member states. I hope that in one of your future studies, you will be able to work on that as well. A lot of work has to be done, and unfortunately, the data we see is still not at a sufficiently desirable level that we would like to see. If you could share some more information about rural areas, I would be very interested in that because I come from a rural area. Are there some differences there?
Are there some achievements and specificities regarding the rural population? Thank you.
Irene Tinagli
Thank you very much. And now I give the floor to Gordon Bosanat for the Greens.
Gordan Bosanac
Thank you very much. Actually, I don't have additional questions, but I just want to thank you for the data that you are constantly providing, not only to the parliament but also to the European public, which we find very interesting. And it helps us a lot in our policy making. And I'm really looking forward to this profit data you mentioned. So, let's be in touch about that.
Thank you.
Speaker 15
So thank you for the question, and I would like to answer the first question regarding government spending and investment in housing. So this information is available on your website and is accessible. I didn't present it there. However, of course, it needs to be supplemented by more data and where it is invested. So this kind of information and needs, one indicator cannot capture the whole picture.
So, this needs to be combined, taking into account the country-specific situation. We will try to develop, together with colleagues from the task force commission, a good basis like a dashboard where we put all the relevant information, what is important. And then we will also include, where possible, the data regarding the specification for the granularity of the NAT2 regions. In fact, it's true. We have the data. Some of them are utterances.
NAT2 level, so it's really for smaller regions. Some data in Eurostat have a breakdown by cities, urban areas, and towns. And there we have several indicators, but we will look together with the colleagues to have a dashboard that is really sought, because we have an interactive publication, which is more for general users. The dashboard is more sought after by policymakers, as it goes one step deeper and provides more data focused on specific questions. And, of course, the granularity of data is a very specific question in this.
So, we will tackle it. And regarding government finance, Eurostat is already aware of the issue, and we are working together with countries and also with other policy DGs to look at this issue. At this moment, I cannot comment more on this question, but we take care of this question as well, as it was outlined by you and also in the policy context. Domingo, would you like to?
Speaker 16
Thank you very much. Just to complement, indeed, the presentation showed, of course, only a small subset of everything that's available. But there's no need to further elaborate on what Siguita has explained about public finances. In rural and urban areas, there is plenty of information available, and we are working to have more available. Recently, we published tables by degree of urbanization relating to the 2021 population and housing census.
They are freshly published and available. And we will have a new data collection, three times per decade, on buildings and dwellings and all other demographic characteristics, which will be available by local administrative units, which are very granular areas, and functional urban areas as well. And much of this information, we will streamline by degree of urbanization, covering urban areas, rural areas, and the outskirts, the sovereign. So, we will enrich that publication. And yes, we can work to provide a mapping by the geographical granularity of what's available: what is not two regions, which are very detailed regions; not three regions, which are further detailed regions; and then these local aspects and this degree of urbanization dimension, which is also very relevant.
Now, what's also very interesting is that we have a statistical atlas of the European Union, which, as we mentioned in our previous intervention, divides the territory of the European Union into little squares of one kilometer on each side. And this grid data can really provide very detailed information on rural areas as well. And there, we have many demographic characteristics, mobility data, and data on dwellings and construction. So there's room for improvement indeed, which we are working on, but there is already a large set of data available on that front at this moment. I mean, we expect it to increase in the near future. And then, on the question related to the profits, we will streamline that table because we see that it is critical.
We will put a direct link in the database, but this is notwithstanding that we can share the link, of course. And together with other information that is relevant to the economic performance of the different European industries.
Irene Tinagli
Okay. So, thank you very much. I have no further requests for the floor. I think it's very important that we keep this collaboration and dialogue ongoing. I mean, it's a developing project, and the attention on this is growing also in terms of policies.
So, I think it's important that we keep a constant dialogue and cooperation with all the relevant authorities working on the data part. So thank you very much to Missus Geske and Mister Martinez Solano for their contribution. And then we can move on to the next point on the agenda. In exchange of views with the European Commission on the evidence needed to support your housing policies, in particular through data analysis and identification of key gaps. And in this regard, I welcome Mister Felipe Batista, team leader for analysis of cities and territories at the Joint Research Center.
And so, thank you very much, Mr. Batista, for joining us this morning. So, as I said earlier, it is really important for us to gather all the possible information, data, and evidence. The study mapping the housing needs in the EU, recently presented to our committee, clearly shows how data can improve our understanding of housing needs. At the same time, it also highlights important data gaps. So, of course, as I said earlier, Europe is characterized by very different housing realities.
So many housing challenges only become visible at the regional and local levels: city, neighborhood, or sometimes other levels. So, sometimes national data alone are not enough to capture all these differences and needs. This fragmentation of data limits our capacity to compare situations, monitor trends, and design targeted and effective responses. So, without shared definitions, harmonized indicators, and strong monitoring tools, housing risks remain insufficiently integrated into broader EU policies and funding decisions. So, with this in mind, I'm really pleased to invite you, Mr.
Batista, please share your insights, and then we will open our exchange of views.
Speaker 20
First of all, good morning to everyone. And thank you, Mrs. Chair, for the introduction, which has been very relevant, and you paved the way for my introduction very much, highlighting the granularity of statistics that GRC has really been working on for many years, not only on housing but more broadly. Thank you also for the opportunity given to the GRC to present the current state of the art on evidence and knowledge on the housing affordability crisis in the EU and how we have supported the European Affordable Housing Plan. Next slide.
So, I will be asking to change the slides. Allow me to start with a brief word about the JRC, the Joint Research Centre, for those honorable members who may be less familiar with it. The JRC is the scientific service of the European Commission, and its mission is to provide independent, evidence-based knowledge and science supporting new policies to positively impact society in many areas. Since the creation of the task force on housing, you should all be familiar with it. Task force on housing by the current commission: the Joint Research Center started working on this topic, specifically by gathering available data and developing... No, Beck, please.
If you could go back. I haven't finished. Yeah. Developing, on top of existing data, new analysis and evidence on housing to support the preparation of the European Affordable Housing Plan. There is input that I will mention in this presentation from several units and directors across the GSE, specifically three directorates and five units, which have covered many aspects in multiple dimensions of the plan.
I must add that I was not directly involved in all the work to which I will refer today. I will try to do my best to represent my colleagues. We are having some issues with the presentation. So now, yes, next slide. I will start by referring to a couple of flagship datasets that we develop and maintain at the JRC. The first example is Mapidomo, which is a harmonized cross-country dataset offering detailed housing stocks and transaction data on housing.
It contains data for 1,100 of the next three regions of the EU and a time series covering the 2010s. It is based on the best available data from official sources, and there is ongoing work to, one, update and expand the dataset, and two, release a new interactive platform, hopefully also available to the public. And this is where I need to highlight the collaboration between JRC and DG Ekfin, which was the Commission service that started Mapadomo and is now handing it over to the JRC. The second example in the next slide—hopefully we will get the next slide—is the digital building stock model (DBSM). Next slide.
Thank you. The DBSM is an open pan-European digital map of buildings with energy-related features. It is very granular. It contains more than 270 million individual building records. And for each one, we have the geolocation, the footprint, the height of the building, compactness, use, construction epoch, and rooftop solar potential.
It relies on a combination of heterogeneous data sources, including Earth observation. And there's ongoing work to improve and expand this data set further, and use it for highlighting areas with higher innovation needs or identifying potential for repurposing buildings for affordable housing. There would be more data sets I could mention in this presentation, but I need to move on to some analysis that we have conducted in the last couple of years in support of the affordable housing plan. If you can move a couple of slides, please. Yes.
The first example of analysis is exactly what has already been mentioned by the Chair: housing investment needs, going directly to the results. We, the GFC, have estimated—this is an estimate, of course, with some uncertainty—that 7,000,000 additional dwellings are needed to cover unmet demand growth between 2025 and 2035. We see that this additional demand is needed; this is on top of construction that is likely to happen. We believe this result is very actionable because it tells you how much and where. It does not tell you how, but it tells you how much and where to invest further to expect building going forward.
There were three components to this estimate. One is estimating already existing gaps up to 2024. Then we looked at future housing demand; in particular, household growth was going to happen or is likely to happen at the regional level. And then, of course, what additional construction and renovation are likely to happen. And then, of course, the 7,000,000 additional dwellings are the gap between the two.
Moving to another analysis in the next slide, thank you. It is something on prices as well. So we've seen from Eurostat and OECD trends on prices. We went one step further and tried to explain why prices are higher in some places and lower in others. Of course, we know that there are macro-level determinants for lifting prices generally up, and this is, of course, linked to expansionary monetary policy, inflation and inflation expectations, increasing overall demand, and also increasing financialization and use of real estate as a financial asset. But we were looking at the place-based determinants.
So, what did we find? Municipalities that had higher house prices were those with stronger demand, and this was due to demographic growth, which in Europe is mainly driven by immigration. Higher share of working-age population, decreasing household size. So smaller household size also means more households in total, better economic performance, better infrastructure, and, of course, tourism and short-term rentals were also associated with higher house prices in municipalities. Looking at supply, those municipalities that had low supply dynamics, where the growth of dwellings was lower than the demand for dwellings, where available land for construction was limited, and where the number of unoccupied dwellings increased a lot.
This was also associated with higher housing prices. And one note on short-term rentals: we did see an association between short-term rentals and higher housing prices, used mainly in cities, not so much in rural areas, and not so much for the rental market. It was more relevant for the sales market. Next slide. Going a bit deeper, we saw that imbalances between supply and demand were associated with price levels.
What is happening with housing stock in the last 10 years based on the census data gathered by Eurostat? So we had an increase of 10% in the number of households and an increase of 9%, just below, in the number of dwellings. So this is not contributing to support well; it is contributing to supporting the increase of the prices. But even more interestingly, on top of this, we have seen an increase of 21% in unoccupied dwellings. And even the increase in unoccupied dwellings was happening in regions where population and households were growing.
Regions with more than 1% population growth were still experiencing an average growth of unoccupied dwellings of 6%. Unoccupied dwellings are residential properties that are not currently inhabited or used as a primary residence. It's good to stop here. It's not totally empty. It could also be second homes, homes that are used seasonally or occasionally.
So not all of these homes are really totally vacant, but they also include vacant homes. And on top of these, vacant houses or unoccupied dwellings, as defined, are 15 times more numerous than short-term rentals across Europe, just to give you some perspective. Next slide. Short-term rentals. So, my colleague from Eurostat mentioned that I was going to mention something on short-term rentals.
So, here is the fulfillment of this promise. This is very new. You are seeing some of these slides for the very first time; they are being presented. And what you see is that we have mapped each individual functional urban area, which is basically major cities and their commuting areas. How many short-term rentals are there in comparison to the dwelling stock?
So, we hear a lot of fuss in the news: Barcelona, Madrid, Berlin. What exactly is the share of short-term rentals compared to the 2,000 stock? Well, in Barcelona, it's 1.1%. In Berlin, that would be even 0.4%. For the top 10 most populated functional urban areas in Europe, the average is 1.1%.
Of course, if we go to the neighborhood level and see some spots here in Paris or Barcelona, in the very core city centers in the historical neighborhoods, we see much higher concentrations. We can go up a couple of percentage points. But this shows that for short-term rentals, we really need a place-based approach. We had an MEP from Croatia referring just before that they want to control short-term rentals. In fact, Croatia shows in our data as having some cities with the highest numbers of short-term rentals.
So this is actually the data showing some of the perception, at least for Croatia, but this is mostly medium-sized, very touristic cities. It's not a UI issue, especially since Northern and Central Europe is not really a big issue. Next slide. A completely different topic is intergenerational fairness, to which we are contributing as well. This was also part of the plan, the affordable housing plan.
There's a new report. You can look it up in more detail by comparing income, homeownership, and housing affordability for individuals across generations. Two key points to retain from this report are that we see in new generations, newer generations, a declining trend in homeownership rates at Engage. For instance, if we are the 30-year-olds born in the 1980s, that's my case, we have six percentage points less homeownership than the 30-year-olds born in the 60s or the 70s. We also see a trend of newer generations having a higher risk of low-paying jobs, inequality, and poverty.
And this is very important because the inability to afford decent housing affects life choices such as family formation, having children, and so on. This is very much linked to demography and creates a kind of loop where you don't have a house, so you don't create, you know, you don't form a family, you don't have kids, and this increases the demography issues and also impacts economic growth. Final slide in terms of analysis. This is really a catch-all thing from the JRC. The next slide, please.
Yes. So this is showing a number of other projects that we are running or have run in the JRC, looking at climate adaptation of buildings. Climate change may impact concrete corrosion. What are the renovation costs related to that? We are looking at the energy efficiency of billings. And we have also collaborated with the Parliament on a number of projects related to housing.
It was a pilot project on integrated renovation of buildings, and then the preparatory action also with the Parliament on the new European Bauhaus, which is very much linked to what we are talking about today. One last slide on data gaps. So the GC has done a lot, has delivered a lot of new evidence on innovative emerging data sources, but we found important gaps in our capacity to really have tailored policies at the moment on a couple of topics. So, one thing is unoccupied dwellings. So I mentioned there are 20% unoccupied dwellings in Europe.
We know more or less where they are, but we don't know how many of those are really vacant, how many are actually used to some extent by owners living in other primary residences. This is very much needed. For those that are really vacant, we also don't know what the needs for renovation are. Are they ready to be used for housing, or do they need some level of renovation? So, we don't know this.
And without this information, we cannot really act. On short-term rentals, it's very important to understand what the life cycle is. I have a short-term rental, and I also use it some months. It would never really be available for housing anyway. So, if short-term rentals were removed from primary residences before and are now used fully as short-term rentals, they may impact housing availability and housing supply to some extent; we don't know this detail of information. And one thing that is really very much across the board is that we see supply lagging.
We need more supplies. This is very much part of the plan. But what we have not understood very well are the obstacles, the disincentives to supply. We see unoccupied housing growing. We see long-term rentals shifting to short-term rentals.
We see construction lagging. Why is this happening? Why is the economy not, you know, working at the moment? Why isn't the market working and delivering what people need? So, something is obstructing the market according to the data.
We also need geolocalized building-level data on the use of our buildings, whether they are used for commercial or industrial purposes. This is important for identifying our empty industrial and commercial buildings that could be retrofitted for housing. And also, one thing that we miss is energy performance certificates at the building level. So, this is one of the oldest European policies: to have energy certificates at the building level, but we don't know the situation for each building. So, it would be really good to launch data collection on that at the building level. Yes, that's what I had for today.
The GRC has delivered a lot. We have identified gaps, and we hope to continue supporting the European Union on the topic of housing going forward. Thank you very much.
Irene Tinagli
Thank you very much. We start our Q&A session. I give the floor to Gabi Bischofe for S&D.
Gabriele Bischoff
Thank you very much for this presentation. And indeed, it looks like there is a huge data hunger in the European Parliament. We are in a situation where we have to make the best use of the data we have, but also highlight where we need more and more differentiated data. But I would like to address some points because it will help us to do well-informed policymaking. You mentioned that 7,000,000 added dwellings would be needed, and you also highlighted, and I think it was done before by Eurostat and others, the increase of unoccupied dwellings on one hand.
And on the other side, also the problems regarding short-term rentals. What is your assessment if we lived in an ideal world where we could address these two topics, reduce tremendously the unoccupied dwellings, and also limit short-term rentals? What impact would this have on the housing market? And the other point, which was already a topic the whole morning, is how the young generation is affected. Also, thank you for your link to the societal impacts. On one hand, rising prices, and on the other hand, the higher risk of younger people these days to be in low-paid jobs, etc. How can we address this topic much more in support of young people, finding affordable housing here, and also maybe special programs for this? If you could elaborate a little bit on that, it would be very much welcomed. And I have a question. We discussed here also with the commissioner that you are looking for data on the analysis of financialization and speculation.
Do you already have something? Or how long will it take to come up with this data? Thank you.
Barry Cowen
You know, I welcome the contribution that's been made, and I just wanted to elaborate if I could, if you could indulge me and maybe for the commission to respond as well. This data and the availability of such data are readily available. And while I welcome the analysis, the mapping, evidence, and gaps, I want to speak about a very practical IRS perspective here. You know, I don't get to spend as much time as I'd like at this committee, the key files, and other committees in agriculture and international trade. But in return today, again, almost as usual, to the consistent frustration of mine with the work of the committee, too often we spend more time diagnosing the problem rather than fixing it.
And Ireland, like many other member states, continues to be in the midst of a housing emergency, and we don't lack reports, studies, or diagnoses. What we lack, from my perspective, are EU-level frameworks that actively enable delivery. So, two issues stand out. EU state aid rules are overly restrictive when it comes to large-scale public investment in housing, and the absence of meaningful low-cost EU financing for social and affordable housing is a major constraint. So my question is, then, is that the parliament report was launched last October.
It contained recommendations around training for labor, speeding up construction and renovation at scale, specific schemes to target homelessness and vulnerable groups, short-term rentals, as has been mentioned here again. But I've always said, ultimately, housing is a national competence. And we then have to be razor-focused on what we can actually address. So, beyond identifying gaps, what tangible progress can the commission point to? Or can they give us the timetable to respond to the public consultation that took place in relation to state aid rules, to conclude it, I think, on January 14?
Because for countries like Ireland, evidence is only useful when it leads to actions. And the ultimate test of our work must be whether it helps put homes on the ground, not just paper on shelves. And I think it's essential that we move quickly and at pace in order to prove to those who give us the privilege of being here that we can and will have a timescale in place to address the issue of state aid rules, which is hamstringing many countries like my own in their efforts to address the social housing funding deficiency that exists.
Speaker 20
Thank you so much. So, regarding the honorable member from the S and D, thank you so much for your appreciation of the work we are doing in the European Commission in gathering new evidence. You touched upon a number of relevant topics. I will try to address most of them. So, we do see an increase in unoccupied dwellings.
We see, in some instances, short-term rentals, which are important at the neighborhood level. You asked what the impact would be if we were able to really tackle these things in an ideal world. So, I think, first of all, it's good to differentiate. I think the impact would be greater if we tackled the issue of unoccupied dwellings first rather than the short-term rentals because there are simply a lot more of them. There's a lot more supply pool of potential housing units amongst the unoccupied dwellings than in the short-term rentals.
So this is the first point. So I think there would be a sizable impact on supply, and, you know, economic theory knows more supply grows more than demand, prices will come down. That's a certainty if all other things are under control. On short-term rentals, actually, I mentioned that this is a much smaller aspect overall. Of course, not to discard that in particular locations.
This might be a problem, not just related to housing. You have really too many tourists crowding some places; this causes hassle and issues with the perception of residents. But this is beyond short-term rentals. Short term rentals, actually, the mainstream accommodation demand is 2.7 times higher; there is 2.7 times more demand for normal hotels compared to short term rentals. So, mainstream accommodation is still much bigger.
Nonetheless, there aren't that many studies on what the impact would be if you removed short-term rentals completely, and what the impact on price would be. There is no evidence of that. And actually, the GRC is working on a paper to really grasp how much short-term rentals, where they are present, are contributing to the formation of prices. So unfortunately, my answer there is that we are really still working on the evidence. On the young generation, well, it's really difficult to make a call from the joint research center.
We are not a policy DG. I cannot speak about the actions. I'm sorry, I have to speak about the data. But there's one thing I dare to say: it is what we shouldn't do. Just more subsidies to the vulnerable and to the young are not going to solve the housing crisis.
It may help individuals, but if you don't match that with additional supply, subsidies to people directly will only feed prices more and more, again, according to economic theory. So, we need more supply. And on the speculation of financialization, we started something some years ago. There was a project on the GSE looking at the financialization of housing, but this was just looking at some case studies. And we need a lot more emphasis on this work at the moment.
We do not have a lot to show, I'm sorry to say. To the second MEP, Cohen, from Ireland. Well, I'm even more at a difficulty in replying to your questions. But at a personal level, I couldn't agree more that we need more homes on the ground. We need fewer studies and more action.
I couldn't agree more from a citizen's perspective, a personal perspective. We have an affordable housing plan that was issued on December 16. The story is not finished there. The plan issues a number of actions; I believe 9 or 10 actions in total to put on the ground. So, I think we need to now stick to that plan and make sure that the Commission delivers on those actions in the coming couple of years.
I would, of course, not challenge the commission; I would not challenge that policy, but the policy is defined, and there's a roadmap with specific actions. State aid rules are mentioned as one of the actions. So, I would just refer back to the affordable housing plan. But of course, on a personal level, I agree that we very rapidly need to boost supply in locations where that is most needed. And there, the JRC has provided, in fact, a number of pieces of evidence.
Thank you.
Irene Tinagli
Thank you very much. Now, I give the floor to Mrs. Junko Garcia for ECR.
Nora Junco García
Thank you. I will speak in Spanish. Thank you.
Thank you very much to Mr. Batista Varela, thank you for all the data that you've provided. It really highlights the problem of a lack of housing: 7,000,000 housing units are lacking. I don't know if you've compared the data between new housing, the needs for that, and the permits for building new houses. There was another question I had.
About the figures you have regarding price caps. Does that mean that there has been a drop in housing available in cities like Paris, Berlin, or Barcelona? And then you also talked about 20% of unoccupied housing. And it wasn't very clear if that was because they were second homes or because they were completely empty. My question was about how long it takes to get a house back if tenants are not paying their rent.
Or does that have an impact on the increase in rent prices? Thank you.
Irene Tinagli
Thank you very much. Now I give the floor to Irene Montero for the Left.
Irene Montero
Thank you very much, Madam Chair. I apologize for what I'm about to say, but we are having a debate here today. And at the same time, in Spain, there are politicians from groups represented in this committee. They're voting for 60,000 families to end up on the street. These can be women.
These can be disabled people. They can be families. And often, they talk about defending families, but these 60,000 people are going to end up on the streets. I don't know if anybody's wondering where they're going to eat, how the children are going to go to school the next day, or how they are going to heat themselves during a wave of cold. You're talking about the lack of evidence to support the housing policy.
You have the evidence, but the institutions are leaving people on the street. People can't pay the price of rent. And I'm sure that you agree with me, and I'm sorry for being indignant, but people need to know what institutions are for. If, at the time of their need, nobody protects them. Nobody helps them get a roof over their heads.
If no institutions can do anything, it has to be people who buy houses and live in them, not to speculate on housing prices. And everybody knows that if we really wanted to, we could do something. Housing prices can be brought down by law. Evictions without providing an alternative can be banned. And I think that people are seeing more and more that this is not being done because housing is a business.
So, beyond the data and beyond the research, it's time for action because we have the evidence. There are thousands of families who don't have enough money to pay the rent and who are threatened with homelessness throughout Europe, particularly in Spain. And this is a political decision that is being taken by institutions.
Speaker 20
I'm very challenged by these two interventions. I'll try to be as neutral as possible. I think your intervention did highlight the aspect that I mentioned on supply: these incentives. We also see the previous intervention from Renew, which said that people are abandoning real estate. They sometimes prefer not to leave the house empty rather than rent it or sell it.
Because I think there are some of these incentives at play. Some homeowners may feel unprotected because the justice system may not work. There are risks in putting a house on the market. And if the reward is not there or is highly uncertain, then they would rather not have the house on the market. So this is an element of this incentive that may theoretically be at play, which I think we should indeed investigate with the data.
Now, on your intervention, I think I'll take the freedom to challenge you and say that what you are seeing are the effects, and you are describing the problem very well. We have very acute social problems at the moment. The GRC is contributing to the assessment of that as well. We are highlighting the vulnerable, but also specifically the young generations who are facing the issues. Now, when it comes to solutions, I have to put my head of commission and say that we have a plan with a number of actions.
We need to move forward with that. This may not be fully satisfying for you, as we see people really struggling every day. But as a scientist myself, I cannot really comment too much on that. And I will just make this one comment. I will just make this one comment: according to not only economic theory but also empirical data, if we put rent controls and keep prices fixed, we will only disincentivize supply.
So even though the price may be limited, if you don't find a home where you can pay that price, then you are still homeless or you are still with your parents. So we have to discuss and agree on the diagnosis, but we have to be careful with the recipes. And really one thing that I think the GRC is really helping with is when we identify that there are 15 more unoccupied homes than there are short-term rentals. I think this is very actionable. We should not get too distracted by something that is small compared to something that is big. Thank you.
Irene Tinagli
Okay. Thank you. Thank you very much. And I give the floor to Volker Schurbusch for ECN.
Speaker 28
Thank you very much, Madam Chair. Thanks for the presentation. It was very interesting. And thank you also for debunking the myth of the big problem that short-term rental causes in terms of overtourism. It seems to be not an EU-wide problem; it's very locally specific. And I agree with you on the subject of unoccupied dwellings.
This is the biggest problem. But, if I understand you correctly, there is not sufficient data to explain why the dwellings are unoccupied. This has just been published in Germany, a study by the Pestel Institute. And they say, we don't know why they are unoccupied. Most of the time, they are in rural areas that are not very attractive, or they are owned by elderly owners who do not want to rent them out anymore, or they are economically not viable anymore.
So, they are not fit for the market. And I would be interested in more data on this subject because, as I just mentioned, the PESTEL Institute's research just came out, I think, last week. So maybe there is more data from single member states, maybe not for all the EU, but for some single member states. And then also, you mentioned, of course, that there are some regions where the demand is too high and the construction does not keep up with the demand. The presentation was very fast, and maybe I missed it, but could you point out which regions are mostly affected by this phenomenon?
And also, you mentioned, of course, that one of the causes for the growing demand and the missing supply is urbanization. Rural areas are becoming more and more populated in Eastern Europe and also in Germany. But of course, migration has played a factor since 2015. And my last question would be if there is specific data on the cause or the effect of migration in certain urban areas. I'm not sure how this plays out speaking of urban or rural areas because in Germany, for instance, migrants will be spread out in every area actually, but I don't know if there are certain hotspots that maybe you can point out according to your data.
But once again, thanks very much, and it's very helpful to have data on this subject, not only rumors and assumptions. Thanks very much.
Irene Tinagli
Thank you very much. I have a question myself, a couple of things. On vacant homes, I know that the usual argument and explanation is that owners do not feel safe enough to rent because they fear that they cannot return. But this is such a widespread phenomenon in countries that have completely different legal systems. So, countries that do have high protection for tenants could be a disincentive.
But there are also countries where this protection does not exist. And so you wanted the floor? Okay. And so, I wonder if this is really the reason or if we are witnessing something else. I think it's also interesting to better understand the nature of the data.
When the colleague pointed out, do we have any numbers on whether these vacant homes are more located in cities, rural areas, or suburbs? Because this can also help us, maybe they are not appealing or worth it if they are located in areas where the rent would be very small. There are not big incentives because of economic reasons, not legal certainty. And so, maybe we need more information. So, another thing: I know it's difficult, but when you say that they could be second homes or holiday homes, we know for sure that these are not rented as vacant homes. So do we know? Because I could have a second home on the seaside, which maybe I just keep or rent occasionally.
This is how it is counted? Is it vacant? Because if it doesn't have a long term, I'm not sure. So, I would like to understand better how this is calculated. Last thing, I was very interested in intergenerational fairness.
And I have another thing, though, I had it at the moment. Do you have any analysis on the impact of these housing trends and developments on inequality? Do we have data on housing inequality? So, how much property and ownership are concentrated today among certain people compared to the past? Do we see a process of concentration and therefore an increase in inequality in housing ownership?
Because back then, when I was younger, the rich ones had one holiday home or maybe two, but now I know people that have 10, 15 houses spread out. That is what we see. But I don't know. This is just, you know, I don't know if you have statistics on that. I would be very interested in learning more.
Speaker 20
Thank you for these two additional questions or sets of questions. So, I will not be able to answer every aspect, of course, but on the first intervention, yes, indeed, our analysis highlights where investment is most needed. But here, investment means extra investment, extra that is not likely to happen if the trend that we have observed in the past continues until 2035. And you mentioned where, which type of regions have this gap bigger and require additional investment? I think this was your question.
And there is a map; you can really pinpoint which regions. If the slides are shared, we can really see them. It's also in the report. But in a nutshell, if I recall correctly, 35% of these investment needs are in the top 30 metropolitan areas. So, this is mostly an urban aspect.
And of course, regions where economic growth and demographic growth are present, coastal areas which are also attractive for tourism, tend to be the ones that concentrate most of these additional investment needs, whereas there will be many regions where such investment needs are basically zero, the majority of the regions. So, this is a very localized thing. Well, migration, my only take there is to say that when we talk about demographic growth in Europe, because of very low fertility rates, demographic growth is mostly driven by immigration internal to the EU, but also from outside the EU to the EU. So, of course, if there are hotspots where there is a rapid increase in migrants, this will impact the housing markets as well, in terms of prices and shortages, if, of course, there is no keeping up with the supply. On your many questions, Mrs.
Chair, I think you highlighted many of the data gaps. And unfortunately, we hope the commission will get from your intervention and from across the room the real need to invest more in improving the data, the database, and the knowledge base. There is Action 8 that refers to the housing plan, which aims to improve housing statistics. One of the aspects we need to understand more is indeed these unoccupied dwellings. So to clarify, unoccupied dwellings are dwellings, housing units, which are not used as primary residences. If they are used by a tenant as a primary residence, they are not there.
If they are used by an owner as a primary residence, they are not there. So it's houses that are either left completely empty and not used even a single day of the year, or could also be houses that are used occasionally or seasonally. So it's a big bag, a big mix, and we don't know how to decompose it. And our suspicion is that the distribution, the decomposition, will vary very much depending on where we are in Ebrahim. If you go to touristic areas, you will see that most of these unoccupied houses are actually not unoccupied in the sense that we perceive them.
They may be used seasonally, but if you go to rural areas, the share of houses that are really empty because people left and there's no demand is going to increase a lot. But we don't know this. It's just our perception. And on intergenerational fairness and increasing inequality in homeownership, I don't really have data to back this up, but there is a perception. I think this study highlights important points; maybe my colleague will add to this.
But I think there is indeed a concentration of capital in fewer hands. I think this is relatively common knowledge. I think this is also linked to monetary policy. Those that have access to credit in the first place, those that have access to the fresh money that is printed out in the first place, they benefit from lower prices. They acquired assets, and only then did the prices increase.
So this is well beyond my remit of work, and it may also link to how monetary policy is conducted. But I think it's common knowledge that there is more ownership concentration in Europe. And my colleague wants to as well.
Speaker 16
If I may, Mr. Chair, can I add to this part? Thank you so much for this opportunity to reply, even if the question was addressed to the colleagues in the JRC. On unoccupied dwellings, this data comes from the census. And indeed, I can only confirm what the JRC and Philippe have pointed out: that unoccupied dwellings include those in seasonal areas.
And if you remember the map that we showed, there was a large share of unoccupied dwellings in touristic areas, in coastal areas, and this shows exactly this phenomenon. This data usually comes from registers. And in registers, I don't really have the information on whether this is seasonally used. It's the primary use that matters, and that's why we collect the data in such a way. And, unfortunately, it's very difficult to resolve this problem as a primary data source.
That's why, in Eurostat published data, unoccupied dwellings include seasonal dwellings and seasonal buildings, which are not unoccupied as such or which are not to be mobilized in any way that could increase the housing stock in the future. On concentration, we have data available on the capital stocks depending on who the owner is. So we can differentiate if the housing stock is owned by financial corporations, non-financial corporations, the government, the public sector, or households. So that does not reply exactly to the data you are mentioning, but provides some more elements to understand the situation. This data is available at Eurostat, and we have it streamlined in our database as one of the main indicators.
Thank you. I hope this helps.
Irene Tinagli
Yes, it does. Thank you. Thank you very much. So, we have completed. Hi, Gabriel. Oh, sorry, Gabriel Michel for S&D.
She had a question. Yes, sorry.
Gabriele Bischoff
I just have two points. One is, if I understood correctly, that you said that rent controls are not working. I would like to know on what kind of studies you rely, as this contradicts the meetings. We had a lot of meetings with the mayors. And in cities where they do have rent controls, they said it is working and also provided data on this.
So, I think to clarify this: do you also have case studies of concrete cities, or do you just analyze the general data that is here? And the second question or comment is that in my city, there are also a lot of unoccupied dwellings, but the legal situation makes it very complicated. If someone uses it for one or two days and can prove this fact, it is very complicated, you know, to address it. Do we have any data on the use of these unoccupied dwellings, their partial use, or data showing that they are not used at all? Thank you.
Speaker 20
Thank you again for the reiteration. Let me just clarify. I didn't say that rent controls do not work. They do work in the sense that they keep controls in check. So, they do what they are supposed to do.
What I mentioned was that we need to be cautious because if we do that, it might also create a disincentive for the market to work. I don't have studies in the back of my head to refer to, but I'll be happy to refer to this broader analysis on the impact of such rent control. I mean, there's ample literature on price controls in general and their impacts on supply. But it was more of a general remark and not a specific one. And for your last point, as I will reiterate what I have already mentioned a couple of times, we have a data hole, a big data hole, on these unoccupied or vacant units.
We don't know how many of them are actually partially used. For those that are not partially used, why are they not used, and why are they not put on long-term rental? This is again something we need to study. We don't know the wise man. We don't know the state of renovations that might be needed to put them back on the market. Maybe they are not in the market because they need renovations and the landlords cannot afford them, or for some other reason.
So this is really an area where I can only say that we need to also invest in new studies. I'm sorry for that, but that's really an area where we need more evidence.
Irene Tinagli
Okay. Thank you very much. I think that we have now completed our exchange of views. I really want to thank Mr. Batista, thank you for his presentation and the ability to answer all these broad questions.
So as I said, I think that this kind of exchange and dialogue is crucial to the work of this committee, and we will keep monitoring as we get more additional data. The data gaps are evident, so we hope—no, it's not easy to gather and collect more indicators from all the countries at the granular level, but I think it's an effort that we need to make collectively. So that's why it's important for us to keep pushing. I think also asking for more data. So thank you very much. I also want to thank you; I never had the time.
I want to thank the interpreters. I want to thank everyone who all the time helps us do our job. Thank you very much.
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