Special committee on the Housing Crisis in the European Union Ordinary meeting
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HOUS European Parliament
Segui le sue seduteIoannis Tsakiris
For 2026, our ambition is even higher. 6,000,000,000 in housing support, which is nearly double the level of 2023. Allow me now to highlight three lessons from our experience so far. First, European-level attention creates momentum. Since housing rose on the EU political agenda, the demand for EIB support has increased significantly.
Cities and member states are seeking innovative financial structures combining EU funding, including the Recovery and Resilience Facility as well as cohesion policy funds, together with private capital. Student housing illustrates this clearly. In Greece, we supported an innovative public-private partnership model for student accommodation in Crete. Our subsidiary, the European Investment Fund, has launched a student housing fund covering several countries in Central and Eastern Europe, targeting 3,500 new beds. Second, partnership multiplies the impact.
Housing policy requires cooperation between public and private actors, between national and local authorities, and between European and national financial institutions. In France, our partnership with the Council of Europe Development Bank and Caisse de Dépôt has unlocked €5,000,000,000 for municipalities and housing providers. Through Banque de Teriturois, C. D. C.
Habitat and Beppe France financing is reaching cities of all sizes. We are pursuing similar cooperation with national promotional banks in Poland, Italy, and other member states. The third element, policy and investment, must go hand in hand. Affordable housing requires clear regulatory frameworks, especially in countries where this policy area is still developing. The Recovery and Resilience Facility demonstrates what is possible.
Portugal has launched the largest affordable housing program in its history. We are co-financing it with €1,300,000,000 to deliver 12,000 below-market-price homes. Where regulatory clarity exists, investments can scale. Looking ahead, our objectives are threefold. First, deepening partnerships.
In Munich last week, the EIB Group and Europe's largest national promotional banks reaffirmed their commitment to intensify cooperation on housing. We are working closely with the European Commission and National Promotional Banks to develop a pan-European investment platform. Since launching our More Homes, Better Homes portal last March, we have received hundreds of requests for support. Many of these projects can best be addressed by aggregating demand at the national or regional level through our intermediated lending model, in cooperation with national promotional banks. By pooling efforts, we can increase scale and maximize our impact.
Second, a strategic shift in the construction value chain. Doing more of the same will not resolve Europe's housing shortage. We must modernize construction processes and improve productivity. For this reason, we launched Housing Tech EU, which is an initiative backed by a €400,000,000 lending envelope to support innovation in construction materials, machinery, and engineering solutions that reduce cost, accelerate delivery, and improve the quality of homes. This is about strengthening Europe's construction ecosystem and industrial competitiveness.
Third, the strategic use of EU funding. Following the midterm review of cohesion policy, affordable housing is now a priority. Member states can reallocate grants and combine them with financial instruments to leverage private financing. Together with the European Commission, we have developed instruments that use grants as equity, interest rate subsidies, and risk-sharing mechanisms to crowd in investment. InvestEU remains a strong instrument to support social and affordable housing.
In the next multi-annual financial framework, affordable housing will be a specific objective under national and regional partnership plans, allowing member states to program investments from the outset. Housing support is also included under Erasmus Plus for students, and we are working with the Commission on a feasibility study for a student rental guarantee scheme under InvestEU. Honorable members, Europe's housing crisis is one of the most pressing challenges facing our citizens, but it is also an opportunity to modernize our construction sector, accelerate the green transition, strengthen competitiveness, and reinforce social cohesion. The European Investment Bank Group stands ready with scale, speed, and strategic focus to support Europe's efforts to deliver affordable, sustainable, and innovative housing. We look forward to continuing our housing road show across the European capitals and to working closely with this committee.
Thank you, and I'm looking forward to your questions.
Irene Tinagli
Thank you very much. Now we start our exchange of views, beginning with Nicolina Brundjak for EPP.
Nikolina Brnjac
Thank you, Chair, and thank you, Vice President Sakhiris, for being here with us again. And, since our last exchange in, I think, June, the Commission has, as you said, adopted and presented the European affordable housing plan. And this plan, the AIB group is giving a central role, especially under pillar two on mobilizing investments. So, a key element is the creation of a pan-European investment platform for affordable and sustainable housing, to be developed together with AIB, national banks, promotional banks, and other financial institutions by the end of 2026. And the aim is to bring the projects together.
And my first question is: how will this platform work in practice? Could you explain a little bit to us? Will it mainly function through InvestEU, which you mentioned, and blended finance, or will it be a separate structure with its own instruments? And, for example, I'll give you that we have 85% of the buildings which were built in Europe before the year 2000. And, from this amount, 70% of these houses have low energy efficiency.
So, how can the EIB also help with funding renewable energy buildings? Thank you.
Andreas Schieder
Yeah. Thank you, Madam Chair and Mister Vice President, for being with us. And you mentioned also that housing is not only a social issue, but it's much more. It has a strong economic impact. Also, we have to say the business cycle is directly reacting on housing, but also, let's say, has an indirect economic impact, as you mentioned, climate and other issues.
And I would say even if we are able, at the end, to provide for the middle class, working people, bureaucrats, and so on, affordable housing and good quality close to their working and living spaces, we could also avoid a lot of lengthy sustainability reports, traffic change, and other issues. So therefore, I think the contribution of the EIP to the system is very important, especially in this area where, let's say, no strong social housing model is established, because then your cheap loans are extremely helpful and very important. And I also appreciate that you mentioned the affordable housing plan from the commission and also our probably next week adopted housing plan of the European Parliament, which then we can act together. But may I also ask, because you mentioned the lending model where you go through classical business banks, let's say financial institutions, providing... And, of course, sometimes, I think we should also look at our governance model to be quicker in providing the answers, to be less bureaucratic in order to support.
And the question is if there is also a program running to evaluate, let's say, the governance model of DIP, the governance model of classical business banks, but also the governance model of public authorities, which are also, let's say, at the end. Because a lot of stakeholders also told me, the most important, besides having cheap money and an area to build on, is also to have a quick decision to be able to build on.
Ioannis Tsakiris
Okay. Thank you very much for the questions and also the support. Dia Nicolina, on the pan-European platform, which we expect to be up and running by the end of the year. The way it will work is, let's say, as a mechanism of pooling resources that we're getting together. And from there, we could, let's say, channel the resources towards the relevant financial instruments.
Because, as we have seen and analyzed, there is significant fragmentation throughout the European Union when it comes to affordable housing and social housing conditions in each country. Each country requires a different approach and different financial instruments so that by pooling the resources, we can decide on a case-by-case basis which is the best financial instrument and approach for a specific country. Now, on your questions about the renovation, that's one of the three, let's say, pillars that we are approaching in the market. It's new homes, innovation, and renovation because, first of all, we have, as you also said, and I think throughout Europe, a huge stock of homes that are closed and need renovation, particularly when it comes to energy and efficiency upgrades. In every capital, there are thousands of this stock.
So, I can tell you that almost 50% of our resources are going towards innovation. And, obviously, it has to go because it's a quick win. The timing of renovating an existing closed house is by far less than building a new one. So, obviously, that's one of our targets. We also work there a lot with financial intermediaries, particularly national promotional banks.
So we are doing this intermediate lending, which dear Andreas also asked about. And coming to your questions, we work very closely with each and every national promotional bank because, again, as I said before, this fragmentation means there are completely different conditions from member state to member state. And the only ones who know those conditions better are our local partners, which are the national promotional banks. So through them, we primarily try to channel funds and identify projects. With HVOR, for example, in Croatia, we have a cooperation that is particularly strong on this subject.
Now, another question is, given the pressing nature of the problem, how to, let's say, decrease the time to market. So from the time that the request is coming to us until we approve the operation, which is, I would say, we have to get out, how can I say, from our comfort zone as bureaucrats and think out of the box. And we are trying to achieve this by creating, for example, envelopes. So we are approving a big envelope of an amount of money with specific characteristics, and then each request that comes requests funding. If it falls within the already preapproved lending envelope characteristics, then it goes fast track for approval.
So that's when we're evaluating projects before the approval to increase the speed of approval. And then, of course, because it's something very important for us when it comes to evaluation after the project, after the funding, we want to be sure that what we were provided for has been achieved and that the impact, particularly when it comes to cohesion, is what was agreed and written in the contract. So we always run an evaluation immediately after the end of the project, and we report back what went well, what went wrong, and lessons learned so that we can also improve our efficiency and impact. Thank you.
Ciaran Mullooly
Thank you, Chair. I suppose there's a phrase that says, "Actions speak louder than words." And that's perhaps the most positive way to start this contribution this afternoon: by congratulating EIB and Vice President Sekiris on what they have actually done since we were here last year. On Friday, I was in Flanders and became aware of the support you provided for the project there. In October, you were in Ireland where you supported, as you said, a €400,000,000 partnership project.
What I loved about the part project was the focus on providing a 40-year fixed-rate finance project for the housing agency and the local authority customers. Because I think this is true not just in Ireland, but around Europe, because it will allow long-term stability for people. And I think it's a model which can provide a rental cost at least 25% below comparable market rents. Because regrettably, in the period since we spoke in July, when you were here, rent is still going up. And, you know, purchase prices are also going up throughout Europe.
And in my constituency in particular, I'm faced with people on a regular basis telling me the average price of a home closer to the capital of Dublin is now half a €1,000,000. It's an impossible situation for people who are allegedly middle class and cannot consider doing so. On the downside, as I say, the affordability of affordable and social housing has worsened. Homeless figures have surpassed 17,000 in my country at the moment, and regrettably, that's an increase of almost 2,000 since you were here last year. The figure also reflects the fact that 5,300 children are homeless.
So, I think we need radical action by the member states. I think we need intensive, high-volume projects. And that's why I asked the commissioner, when he was here, our housing commissioner, to look at something like the Green Village model, the Green City model proposed as a master plan for Ireland by the Ballymore Group: 20,000 carbon mixed tenure homes alongside a project for a university for 25,000 students, a 5,000-bed eco village, a multifaceted project. Sometimes, we're not good at joining up projects, regrettably, in housing. And you will tell me there are two or three different agencies and two or three different groups involved, but we must do this.
We have to approach it in a multifaceted way. So I'm interested in asking you when we will see progress and when we are likely to see action, I suppose, as I complete my contribution from InvestEU in terms of that student project and student rental in the future, and when we're likely to see a joined-up approach across the member states. Thank you.
Irene Tinagli
Thank you very much. Now, I give the floor to Gordon Bozanac for the Greens.
Gordan Bosanac
Thank you, Chair. Welcome again to the parliament, and thank you for mentioning the really important role ABE is playing in Croatia. I'm coming from Croatia. I'm very much aware of the cooperation between ABE and the Croatian cities, which is a good example. So, my question is: as far as I understand, this project is more about capacity building and preparation activities before they build the public flats.
So, do you think that the logical next step would be, for example, to use the cohesion funds, either in the next MFA or even now in a midterm review, to transfer the money into building those flats? And this is the way how AIP actually cooperates very well with the Commission and the EU fund. Is this also your recommendation to the Croatian government to do that? And my second question is more because I am not coming from the banking sector, but I have learned a lot through this committee on banking. I think I have learned.
One thing I learned is about the role of private investments in housing and one possible threat. As far as I understand, and please correct me if I'm wrong or misinformed, private financing has a completely different logic than public financing. You are coming from the public bank. You have other benchmarks you have to achieve. When you work in private financing and want to invest in the housing sector, your benchmarks are more rigid, so you want to see more profit in a shorter period of time.
If you don't achieve this, you will be fired. So how do we actually talk to the private sector to slightly change the philosophy so that it is more compatible with the current housing crisis, and not repeat the financialization of the housing market? Because this is what I'm afraid of. And if you have any safeguards you can recommend to this Parliament, because I'm afraid that our report will not include such recommendations. What are the safeguards to prevent the financialization of the housing market from repeating? Thank you.
Ioannis Tsakiris
Thank you very much for the questions. Mr. Mulloli, on your questions about the continuous increase of prices. When it comes to Dublin, we had the same family experience: when my son wanted to do a master's in Ireland, we found out that renting a one-bedroom in Dublin was almost impossible. But allow me to say that it takes Tatango.
And what we need is also, because we, as the European Investment Bank, have almost developed all the financial instruments. We have plenty of technical assistance to mature projects and accelerate their completeness so that they are able to receive financing. But what we cannot do is, let's say, create the market. So we need the promoters to come to us and ask for our help, both when it comes to financial support and advisory support. And I can guarantee that all the requests from member states, municipalities, and regions will be satisfied accordingly.
So, we also need to create the demand for our products and financing. So now, I see that day after day, month after month, everybody is also getting involved with the road shows that we are doing. You know, the potential promoters are, let's say, alerted. They understand that the IB can help together with the Commission. So we have, let's say, an increased demand for operation, but it's still a long way to go given the size of the problem.
Eventually, we will get there. Now, on the question of private investment, obviously, if we want to accelerate the solution to the problem, the private sector has to be involved. And we have seen projects, particularly PPPs, where the private sector is involved.
And.
Ioannis Tsakiris
I like the way you posed the question, which was exactly, let's say, in very simple terms, what needs to be done. A private investor usually wants a big return; there are two things. Either the private investor wants a big return in a short time, or it needs a low return but guaranteed for a long period. The first one is speculation. The second one can work together with the public.
And as we see, the affordable rents are directly linked to the cost of construction by giving a long-term loan, a 40-year loan, and by providing the land from the public sector. Also, as is the case now, the availability of cohesion funds as grants can lower the construction cost significantly. And in this way, the private investor can accept, agree, and contractually commit that he would provide, for the next 40 years, a specific home or apartment or whatever in affordable terms because he will make a decent return over those years. So it also works for them. To conclude, we need to set the framework, and we have set the framework on how we can involve the private sector to avoid, obviously, speculation and all these things that we don't want to see.
But somewhere in the picture, the private sector needs to be involved because this also accelerates the solution to the problem. Thank you.
Leila Chaibi
Thank you very much, Madam Chair, and thank you very much, Vice President, for coming here today and for your presentation. This will help us see how the funding of affordable housing works by the EIB. So this could help us to look at what can be done in the future action plan on housing. I have 3 questions. First of all, the environmental and social conditions.
So, when it comes to funding for which you are the intermediary, is this something that already exists? Are there social and environmental conditions that need to be met? And if not, is that something you are planning or that could be possible in the future? For example, in the conditions, there may be a ceiling on rents and prioritizing the lowest income families or whole households. Secondly, state aid.
The commission provided us with a document, which shows the difference between affordable housing and social housing. Do you have any objectives based on figures on funding for that, whether it should be 50-50, for example, or 70-25-5%? So, is the proportion for affordable housing higher, or is there an objective to have more affordable housing than social housing? Now, thirdly, I feel we don't talk enough about homelessness here, especially when it comes to the report that we're going to vote on next week in the plenary. But the EU did set out targets to reduce homelessness or even eliminate homelessness by 2030.
That was one of the objectives set out in Lisbon in 2001. The EIB could play a role here, not to fund housing, but to fund, for example, shelters or other forms of action. Thank you.
Irene Tinagli
Thank you very much. Now, I actually have only one request after. This is the closure of the first round, but I only have one request for the second round. So, I would give the floor to Isabel LeCale next, so we can conclude.
Isabelle Le Callennec
Thank you very much, Madam Chair. Here in the House Committee, we have regularly reiterated the key role played by the EIB. And the EIB has set out an objective for €6,000,000,000 in 2026. You mentioned several examples of projects in 2025. I'd like to know if the report that we can consult, which includes the exhaustive list of those projects, also provides an idea about the interest rate for the loans.
Secondly, under the objectives of the EIB, there is a significant focus on renovation and new building. You mentioned Housing Tech EU, which has €500 million for innovation. Could you say what type of companies will be eligible for those funds and under what conditions? And the third question: I imagine that you are following the latest news from the Commission and the Parliament, especially when it comes to the MFF 2028 to 2034. We want to know what the fate of the housing sector will be because it is not explicitly mentioned in the national plans or in the competitiveness envelope.
Furthermore, we want to know how the performance regulation will be applied specifically to the housing sector. What do you think? Because you have experience with the criteria, you select the projects that will be subject to the criteria. So, I'd like to know what you have to say about the performance there. Thank you.
Ioannis Tsakiris
Thank you very much. On the question of environmental and social conditions, allow me to say that, first of all, at the European Investment Bank, we have a set of environmental and social conditions that are applicable to every operation we undertake. So that's the general idea. Now, when it comes to affordable and social housing, each project has to have a benchmark in order to be eligible to be categorized as affordable. But when we are evaluating this project, it is saying that our rental prices will be much lower than the current market or even fixed amounts or a percentage, for example, of the annual income of the tenant.
So, there is a specific, let's say, social aspect. Environmental issues are the same. You know, we are the climate bank, so we follow all the relevant requirements. But when it comes to social and affordable housing, yes, each project has specific criteria in order to be eligible, criteria that have to do with the rent that someone is going to pay. Now, when it comes to the purse and your questions on the percentage between social and affordable, I cannot tell you off the top of my head how much it was.
But, obviously, affordable housing was bigger than social housing. But, again, this does not, how can I say, rule or guide it because that's the demand from the member states, from the municipalities that we are receiving. So I cannot predict how much is going to be in the future, or in 2026. In general, the need for affordable housing is obviously bigger than social housing. Imagine that when we're saying affordable housing, it concerns even employees of this organization; it is almost, you know, not for everybody, but for a big part of our society that really, with the salaries and the income, cannot afford to rent a house in the place where they are working or want to move.
On your questions about shelters, of course, shelters are eligible for our operations, and it would be very good news for us if somebody, whether a municipality, an organization, or a member state, asked us for this type of financing. It would really be a milestone for us. On your questions about the list of operations, I think it is public that we are working on affordable housing. Obviously, there are no details on the interest rates, etc., but I don't know how we can deal with it. Allow me to get back to you later.
Now, on your TechEU question, this €400,000,000 is to support technology in housing, and we have quite a demand from companies and venture capital funds, particularly when it comes to new materials that are cheaper and quicker to produce. We also have requests for funding new methods of building, you know, through robots and so on, because let's not forget that we have expensive materials in Europe, but also a shortage of labor. So let's say industrializing a sector that for many years hasn't changed a lot. It's the same way we were building twenty years ago, the same way we're building today, which creates significant added value. And on your last question about the MFF, as we are not involved in the discussion, we're only giving suggestions.
From what I know, the discussions that they're having go in the right direction when it comes to the cohesion funds and the state aid, let's say, to support affordable housing, to the extent possible given the limitations of eligibilities. We are happy with what's going on from what we hear and what is going on so far. But it's not our, let's say, remedy to guide the discussions. We're giving our feedback, and I think the response from the European Commission is quite positive and taken seriously into account. Thank you.
Irene Tinagli
Okay. Thank you. Thank you very much. I have no further requests for the floor. So let me just thank the Vice President for the presentation and for answering all our questions.
I think that now we have a comprehensive view, but, of course, everything is still in progress. So, we count on this cooperation to keep monitoring and to have future updates on the EIB's activity, as well as its involvement in the pan-European investment platform for affordable and sustainable housing, which will be launched in 2026 as part of the Commission's European Affordable Housing Plan. So, there will be other developments that will require our attention and fruitful cooperation. So, thank you. Thank you very much for your availability and your work.
Thank you. Thank you also to all the colleagues who participated, and to the interpreters and the staff for making this possible. Thank you. The next meeting is on March 24.
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