High Level Event on the Housing Crisis in the EU
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HOUS European Parliament
Follow its sittings
Matthew Baldwin
I will be very short because I entirely agree with your analysis and what you've had to say on the shift that is taking place in attitudes and the coalition, which you all very much represent here today. It seems like it was yesterday since we met in this format in 2025. It seems like yesterday, but so much has happened in the meantime, and you've referred to it. Congratulations on the resolution in the parliament, adopted with such a strong majority in favor. The council has issued a set of conclusions.
It's busily working on a second set of conclusions. The European Council has discussed housing, and a summit meeting is planned for the second half of this year. And we and the commission are also proud to have played our part delivering the first ever European affordable housing plan under the stewardship of the first ever housing commissioner. But, madam chair, these are institutional movements showing, I think, the shift of attitudes, but the need for action remains. The need for this has never been clearer.
The affordable crisis rumbles on. We do need to be very cognizant of subsidiarity, the role of member states, the role of regions, the role of cities in exercising their responsibilities for housing. I hope we have begun to identify the European added value to support those efforts. Our work is not completed. I think today's discussion, very cleverly arranged, if I may say, around three critical themes, will show, I hope, that we're on the right track and that we've made a decent start.
But there is so much more work to be done. Thank you very much, Marjorie.
Irene Tinagli
Thank you, Matthew. And now, as I said earlier, we are honored to receive keynote contributions in the form of video messages from the president of the European Parliament, Roberta Mitzola, and then Executive Vice President Rivera. So I would just like to share with you the video of President Metzola.
Roberta Metsola
I want to start by thanking Chair Irene Etinali and the entire Housing Committee for all the work that you have done and are still doing to make sure that this issue gets the attention it deserves. And I'd like to thank Rapporteur Borja Jimenez Lara for his excellent report. A home is not just four walls. It is where our lives are built, where our children grow up, where people find stability and dignity. And when that becomes out of reach, everything else becomes much harder.
When one in 10 Europeans spends almost half their income just to keep a roof over their heads, something has gone seriously wrong. And right now, rising energy costs are squeezing those same families even further. I know young couples who want nothing more than a place to call their own. I have spoken with teachers and nurses who love their city but simply cannot afford to stay. This is the daily reality for millions of Europeans, and frankly, it is unacceptable.
I am proud that the European Parliament is leading on this. When we saw this crisis looming, we created the special committee on the housing crisis. We pushed hard to keep housing at the top of Europe's agenda, engaging with mayors and cities on the front line of this crisis and turning that into concrete proposals and recommendations. And that work continues because none of this can solve this alone, and this is exactly why this joint parliament commission effort is so important. We're looking forward to the commission's proposals, and I know our committee will be ready, engaged, and pushing hard to make sure Europe delivers.
Of course, member states and local authorities are central to the solution by investing in social housing, reforming planning rules, and supporting families on the ground. Ultimately, affordable housing needs all of us at the European, national, and local levels moving together towards the same goal. And the next long-term budget is a real opportunity to make sure that the EU funds are targeted, strategic, and focused on what people actually need, starting with a roof over their head. A young couple who can finally afford a home, a nurse who can live in the city where she works, a family that no longer has to choose between heating and eating. That is what we are fighting for, and that is what together we will deliver.
Thank you.
Irene Tinagli
Thank you very much. And now we have also received a video message by EVP Teresa Ribeira.
Speaker 5
Good morning. I would like to start with a word of appreciation for your work, a word of gratitude for inviting me to join you today. I have not been able to be there, but I want to stress how important the work you have been developing is. The Housing Committee of the European Parliament and the Housing Task Force has made a great effort to understand and to put a clear message on why housing is so important for the Europeans, and how we need to address this as an urgent issue for everyone. Affordable housing remains one of the major concerns of our citizens.
The members of the parliament, the policymakers, the civil society, the judge representatives want to stress this today. You have all gathered today to discuss and support the actions that the European Union is taking to address its housing crisis. To ask for more commitment, more engagement, more solutions. What you are doing is very important because housing is a priority for all, of course, for the citizens. But access to housing is a fundamental right that we need to ensure, and guaranteeing that right is essential if we want our democracies to remain strong and fair.
By now, we know that access to affordable housing is a European problem, and one to which we are working to deliver solutions. The report of the Housing Committee of the European Parliament has framed the challenge very clearly. Europe needs not only more housing, but housing that is decent, sustainable, and affordable. And across Europe, we are moving from words to action, together with member states, with local communities, with regions. To deliver, the commission is advancing work along three key strengths that you will be discussing today: first, by financing and mobilizing investment by redirecting available EU funding and by negotiating for a multi-annual financial framework that puts housing needs at its core. By providing member states with the necessary stated tools to finance affordable housing projects quickly and efficiently, and by encouraging the pooling and blending of European public and private funds through the Pan European Housing Investment Platform, learning from the others, learning from the good experiences, learning also for those experience that fail.
Second, by legislating. With the Affordable Housing Act proposal, we are working on designing a legal framework that supports our cities and communities in responding to housing pressure while respecting their own local context. And third, by making sure our rules foster inclusion. Too many young Europeans are locked out of the market. Too many are forced to delay their future because housing is not affordable.
This is not only a social issue, it's a generational and economic challenge. So across our actions, we have one clear objective: to ensure that access to affordable housing is not determined by the postcode, income, or age, but made a reality across our union. And it is so important that we need to keep on working hand in hand with measures, with local authorities also present today in this room. You, local representatives, bring to us the case studies, the data, real life experience, and insights that are extremely valuable to be able to understand what European cities really need and where Europe should help in the most impactful way. With that in mind, I'm curious to hear the takeaways of your discussion today.
I wish you a very productive and inspiring event. But more than that, I wish all us success we need to provide that is needed by our citizens. Thank you.
Irene Tinagli
So after these two inspiring speeches that set the tone for our exchange, just let me explain to you how today's discussion is structured. There are three panels, each addressing a key dimension of the housing challenge. So the first panel is financing the housing transition, the next MFF, and the Pan European Investment Platform. Panel two is about areas under housing stress, the Affordable Housing Act, and the construction sector. And Panel three is Housing and Young People, Access, Affordability, and Future Prospects.
So let's get started with the first panel on financing the housing transition. All the speakers will have 2.5 minutes for their intervention. And we start with Mr. Gualtieri, the Mayor of Rome and member of the Mayors for Housing Alliance. Roberto, thank you so much.
Roberto Gualtieri
Grazie. And the floor is yours.
Thank you, Irene. Good morning to everyone from Rome. Financing the housing transition is crucial because to address this emergency, we need clear resources. We estimate an annual budgetary gap, financing gap of at least 153,000,000,000 at the EU level. So it's clear that all of the institutions have to do their part.
We need public and private resources, EU, national and local resources. Next, MFF will be decisive for that. We appreciate the fact that in the proposal, affordable housing investment becomes eligible as they were in the next generation EU, but the possibility for us is not sufficient. So we call for Toulay College legislature to establish housing as an explicit and dedicated objective within a mandatory urban earmarking of the national regional partnership plans. This is fundamental because without this first urban earmark dimension, second central housing component, we risk the fact that actually with a single fund, other earmarking, at the end, erode the financing for housing.
Also, because in the traditional logic of the old style regional policy, normally, housing crisis are in cities which are in regions which are, let's say, so called most advanced. But now in the globalization context, division differences inequality are not among regions, but within regions and within cities. So it's fundamental. This urban chapter and year marking is fundamental. And we also underline the need for also the competitiveness fund, should have a window dedicated to social and housing investment, and as it was for Invest EU.
And this is also very important because for us, housing emergency, affordable housing emergency is not just an issue of social justice, but also of competitiveness, because hampering labor mobility, the current housing crisis is really reducing the growth potential of the whole EU. So this is clearly also a competitive issue. Oh, and by the way, addressing housing not only in terms of quantity of affordable housing, but also in quality of housing, including environmental quality, is also a driver of innovation and competitiveness. This, of course, requires a decision, a bold and necessary decision of colleges later as far as the structure of the next MFF is concerned, but also as far as the size is concerned. So the last point I want to make, we clearly have the need to increase the dimensional MFF, and the obvious candidate for this result is the 168,000,000,000 currently allocated to cover the first repayment installments of the grant component of the next generation EU.
We call for rolling over this component with rolling over the expiring bonds as any issuer does in the world. It's absolutely normal. All the central banks do the same. So it wouldn't really be understood as we are facing, as you know, so many emergencies and priorities, security, defense, innovation, energy transition, housing, that we are not even able to do a very normal thing like rolling over this expiring debt. That would increase the pocket of 168000000000 and would give a good contribution also to the need of properly financing the housing transition.
So thank you for your attention, and thank you for this very important conference.
Irene Tinagli
Thank you very much, Roberto. Thank you for being so, you know, keeping the time and so precise, very European. Okay. So now I give the floor to Sorica Edwards, Secretary General of Housing Europe.
Sorcha Edwards
Thank you very much for the opportunity to be here today to speak on behalf of public, social, and cooperative and community led housing providers in Europe. I will first quote an activist I heard speaking recently from my home city, Dublin. If housing was an organ, it would be the heart. And I think this is crucial because if the heart is not functioning well, doing its job, nothing else works. And I think some of the testimonies we've heard in this house, even this morning, are really proof of this.
When housing is not working, societal balance is not at risk, but also democracy is at risk. We see as housing fails, it's a big part of the growth in living costs, which is leading to a growth in anger and disappointment, in disillusionment, let's say, with governments. But on the plus side, and I think this is a real test for a democracy that we have at the moment here at European level, if we do this well, good housing policy can regain faith in democracy, regain trust in governments if we can actually deliver affordable housing at a price that people can actually pay for the long term. And I think these activists are seeing the devastating social consequence on a daily basis in many parts of Europe in what is a failure in housing policy, a heart failure. What we have to do is restore this faith in the government.
Speaker 9
And a big part of this is getting the investment right. So I want to make this point extremely clear. The housing crisis we are in now is not due to a lack of investment. Of course, we need massive and targeted and well-thought-through investment. But part of the reason we are here now is badly thought-through speculative investment.
Sorcha Edwards
So I think this has to be at the absolute core of all the work we do at European level. And of course, going into the talks on the MFF, this is extremely crucial. I will talk about just three points, as the time is short, of course, on what the characteristics of this investment from our point of view should be. I think from the EU level, we have to recognize, of course, that we should be acting more like seed funding because it's only a drop in the ocean of the amount of investment that is actually needed in the sector. But that is not to say that we can have a huge catalytic impact on the direction of helping to direct funding in the right way.
We want to number one, so three points. The one is that we should be focusing on revolving investment. So not investment that is extracted from the sector in the short term, sector that is invested for the long term in long term housing. I think the advisory board for the task force did an excellent job in stressing that housing has to be treated as infrastructure. And that means we have to think in the long term, and twenty years when it comes to housing is not long enough.
We should point to, it should be meeting actual needs. I think many of us here live in Brussels. You may have seen the latest data that shows 25 percent of people living in Brussels are at risk of poverty. They are earning at or below €1,500 a month. So I think we should be aiming at housing policies that actually meet their needs and are cognizant of the actual income levels.
And keeping in mind, of course, that low income groups, when they have some money to spare, will spend it in the low that it is sticky money. They will spend it in the local economy, giving a boost to that economy. Third point, it should be going in. I think here, Europe is extremely lucky. Unlike other continents, we have a strong fabric of public, social, affordable and community-led housing.
And they are already investing 50,000,000,000 annually in housing, right? They are struggling at the moment because of high construction, high land, and high capital cost. But we have a huge resource there that can bring this agenda forward. And what is the plus side? They will invest in the long term.
They will not be extracting profit in the short term. We don't, in Europe, have to resort to tools like securitization, unregulated securitization. We don't have to resort to narratives, which are simply build. Yes, we have to deliver homes at an affordable long term status, but we don't have to follow the build, build, build. And the last point, I would fully support the words of the Mayor of Rome.
We estimate that indeed, 100,000,000,000 should be coming through the MFF in different forms to support community-led social and corporate housing. That the focus of this should be to prevent speculative investment and prevent the risk of feeding into financialization using public money. Thank you very much for the time today.
Irene Tinagli
Thank you. Thank you very much. Now I give the floor to Mister Johannes Bohmer, vice governor for social development strategy, Council of Europe Development Bank.
Johannes Böhmer
Thank you very much, chair. Thank you very much, members of parliament. Thank you very much, European Commission for setting up this event. Thank you for all here in the room and online for investing your time in this important subject. Housing has been at the core of the Council of Europe developments mandate since the inception 70 years ago.
Speaker 11
This is our anniversary year, as a resettlement fund initially introduced for displaced persons in the aftermath of the Second World War. As Europe's social development bank, we remain deeply committed to that mission today. Our focus is on supporting social and affordable housing across our 43 member states. Council of Europe, think geographically, Europe, larger than the European Union. In fact, since 2010, so over the past fifteen years, the CB has approved nearly 8,000,000,000 in loans for the sector, representing approximately 17% of our total financing throughout that period.
Johannes Böhmer
The support has been instrumental in creating thousands of emergency and permanent housing solutions in partnership with governments, regions, municipalities, social economy actors, and other financing institutions from Ireland, Spain, Italy, Latvia, Finland, Romania, or Malta. In this context, we fully welcome the European Affordable Housing Plan and the establishment of the Pan-European Investment Platform. We particularly endorse action nine, addressing housing for young people and students, and action 10, tackling homelessness and housing exclusion. Given that these two are, as we consider them, the most vulnerable areas, and we focus, very much, on the most vulnerable populations in societies. The CB is ready to scale up support in these areas, provided two conditions are met.
And this is, let's say, forward-looking and also based on the experience we've had in the past. First, continued Invest EU eligibility. Housing should remain eligible for financing under the Invest EU instrument or something similar to come. The Invest EU guarantee allows the CB to provide financing for riskier, high-impact social projects with flexible, affordable terms. It has enabled us to engage with public interest foundations and associations that are closest to those in need.
And I can really say and praise the EU for having set up this instrument, because it really made a difference and has opened us to work together with very dedicated local institutions, foundations that otherwise we would not have possibly been able to work with. Second, adequate subsidies. In the area that we are in, in particular, the homelessness, direct subsidies are essential for the financial stability of housing for those low-income or if at all income vulnerable groups. Our experience with the European platform on combating homelessness, EPOC, and nonprofit providers shows that these projects require subsidies between 20-60%. Without such support, the risk may be too high for the project to take off, as rent alone cannot cover investment costs.
Consequently, we propose specific earmarking to address housing exclusion and homelessness under the next multi-annual financial framework. Specifically, we support the Housing Advisory Board's recommendation to dedicate 3% of the European Social Fund, plus approximately EUR 3,500,000,000 for this purpose. To conclude, the CB strongly supports EU-level efforts to implement market reforms and mobilize funding. We stand ready to play our full part in the European affordable housing plan and contribute to efforts to ensure it delivers robust solutions, particularly for low-income populations and vulnerable members of our society. Thank you very much.
Irene Tinagli
Thank you. Thank you very much. Now I give the floor to Tangouy Des Roseau, chair of the group housing task force, European Investment Bank.
Tanguy Des Roseaux
Thank you, chair, and thank you for the invitation to today's event. Very pleased to be here, representing the European Investment Bank, having been involved with the initiative and launched our action plan some two years ago. So I'll try to summarize, two years of work in two and a half minutes, of which 20 seconds have gone. So I'll be quick. First of all, just to let you know, if you're not familiar with the EU Bank's action plan, we have three pillars.
We want to focus on the financing of innovation in construction, renovation of housing, and new build, so, construction of social and affordable housing. We do that via three means of support. First of all, lending as a bank, then we provide blending, so financial instruments combining some grant element and lending, and finally, advisory. So technical advisory and financing advisory. We provide our financing by way of loans, long term loans, which could be direct loans to project promoters, which could be intermediated loans through our partners, so national promotional banks to start with, and commercial banks as well.
We focus on all social housing, affordable housing segments, with various promoters and borrowers. We have a specific focus on student housing. We also support the more social segment, including elderly population. The EIB works together and has been working together with the European Commission from the outset, and I would and also with the European Parliament and the house committee. And I would like to say that our action plan fully supports both the report that has been approved and also the EC's action plan.
In what way do we want to mobilize public and private investments to boost supply. That's the first one. We want to support affordability, and one way to support affordability is to finance energy efficient renovation of homes. Another one is to finance innovation in construction to provide more affordable homes. What have we done so far?
And I'm over time already. So very quickly, in 2025, we had an ambition to increase by 40% our support to the housing sector, and we've increased by more than that, 50%. So more than €5,000,000,000 is dedicated to the sector. The ambition for 2026 is to go even further, so to 6,000,000,000 annually, which is about twice what we used to do over the past five years. Last year, we launched a specific loan for financing the construction sector.
So TechEU for construction, 400000000 euros of facility. Last year, we in March, we launched a web portal, presenting the work of the bank together with the European Commission, the National and Promotional Banks, and all MTBs, including CEB, and all stakeholders supporting the sector. Last year, we were quite proud to expand our reach to new member states that we hadn't been involved with, like Croatia, The Czech Republic, Latvia, and Estonia. This year, we want to go even further. Then in 2026, we want to do more of all of this.
More volume, more countries involved, more promoters involved. If we get to the questions, I may be able to give you some examples. I don't want to go too much over time. But, basically, we support promoters both national governments, regional governments, national agencies, municipalities, national promotional banks, as I said before, but also funds. We finance universities for student housing.
We could finance clinics for the elderly, housing as well. So the full range. Thank you very much for your attention.
Irene Tinagli
Thank you. Now I give the floor to Antonio Bandres, Director of the Instituto de Credito Official.
Antonio Bandrés
Thank you very much, sir, and truly honored to have your attention today, with a topic of the maximum relevance for us. I'm here on behalf of Instituto Crédito Oficial, which is the Spanish national promotional bank. But moreover, on behalf of the National Public Association of Public Banks, that represent 33 public banks institutions with a muscle of €2,800,000,000,000 across the European countries. I think I have a couple of good news and some bad news as well, but, I think one very good news is a clear diagnosis. There is no need of more dramatic figures to state the diagnosis, which is in a high proportion in need of new supply of refurbished households and new constructional house.
This is a challenge that has a four-line track that will run in parallel. These four potential bottlenecks, land, construction capacity, permitting, and financing, will go at the lowest speed of any of them. Financing, which is the role of the national promotional banks, as banks that we are, cannot be the one of the bottleneck. But financing, as it was stated, cannot be only public financing. We need as well to gather private capital for this challenge.
I think it was wisely and very work done on sizing the financial need by the housing affordable plan presented on December and the special committee. And this €150000000000 that has to be addressed, it's an ambitious, financial challenge. But the good news is that we have the structures. We have the potential to address this challenge. National promotional banks together have provided in one year 2024 three hundred and eighty thousand homes across Europe.
That has been a financial effort together with EIB, alongside EIB, of €75,000,000,000. I mentioned a sizing of the problem of additional homes to be provided on a number of 650,000, that require an investment of €150,000,000,000. So there's a proportion on the capacity and, moreover, on the structure, on the products that could be provided to make this happen. And this is grounded in evidence that the national promotional banks are the backbone to provide alongside the MFF and the financial products that could be provided and could be tailor made and financially sufficiently allocated to the need, and alongside with EIB could be part of the financial solution. We have here a double approach and European ambition, with a national execution.
And this is important because we can provide houses, it's not an iPhone. So there is a need in each country to have specific, certain elements that are not homologous with other countries. So in housing, we need this perception, this vision of the national promotional banks and the local authorities to tailor the tools, the financial tools at European level, and to apply these measures, atomized to each country. But on the other hand, this European ambition is translated into the practical application of the financial tools that the MFF has already provided in this period, and we are willing to keep being provided in the next period. And it was already mentioned, there are extremely useful tools, and we are asking for continuity and to scale up these tools.
In particular, InvestEU has been used by the national promotional banks. In our case, we have an equity product that we just closed of €700,000,000 committed with an objective of 20,000 homes to be made, backed by Invest EU, but my colleagues from Germany, Italy, France, all the national promotional banks have analog products. And this is important because we, as a network of public institutions, can share these products, can share the technicalities of those products to be extended to all the countries in Europe. And the impact of this product, I think, is extremely useful. And I would like to underline and also to congratulate the commission by the implementation, to also ask for more simplification, but a lot of work has been done, and the demonstration is that it works.
The other product is because there is also bad news, and it's obvious that the construction costs are increasing in my country since 2020 more than 32% yearly with the last events that we are observing. This gap is increasing. On the other hand, the affordable rent ceilings are indexed, and the gap is decreasing. So we don't have, and the more and more, we don't have room to build affordable, financially viable homes. There is a short-term solution and a long-term solution.
On the short term solution, we have the blending, and then it also comes the MFF and the European budgetary effort of the commission with a high multiplying effect. We have already proven how useful the blending, which is to blend grants with financial debt and with equity into making a product happen, in this case, housing, in the alternative fuel with CEF. In the case of Spain, we've done more than 30 projects, mobilizing more than €1,000,000,000 in projects that wouldn't have happened without the blending. So it's a very extremely efficient way of giving grants. Grants, it's a very dangerous product to be allocated, but it could be also a very efficient and with a high multiplying effect product if it's allocated in the right way.
And I think the commission setting up in alternative fuel, which was a complex sector, of course, because the demand there was not yet created, made a fair point that could be extended to the housing sector. And just to finish, this is in the short term. In the long run, we have to industrialize. We've done the renewals with a high success. It's also an opportunity for competitiveness, and this industrialization could be reducing the gap in the cost.
Sorry.
Irene Tinagli
Really? Because otherwise, we have three panels. We have to give the floor to the audience. We have MEPs. So but we will probably have the chance to continue explaining.
Now I give the floor. We have this format. We have the floor to one representative of the members of the parliament for 1.5 minute question, followed by two questions from the audience, and then followed by a reply by the panelists, one or more. I would recommend, if you can, to focus your question to one or two of the panelists, because otherwise, if everyone has to reply to every question, it becomes too long. So we start with MEP, Isabel Kalinec, from EPP.
Thank.
Isabelle Le Callennec
You, Chi. I'm going to be very direct. The question of financing is key. If we do wish to solve the housing crisis, build, renovate, and get on to the market. The European Commission has earmarked €43,000,000,000 for this.
InvestEU, Horizon, and the recovery plan. So the plan that was adopted in the clean recession last week, the parliament was very clear. There must be strategic deployment in a responsible manner, and it must be effective when it comes to investing in sustainable and affordable housing. And this must be done with the EU funds. Now, with the new architecture of the MFF 28 twin 34, nothing is certain.
Housing is integrated into the national partnership plans, and the funding then would depend on the choice of the member states. Thankfully, we have the Pan-European platform based on the EIB, and that's focusing on long-term investment. We have €10,000,000 over two years. When will this platform become operational, and who will benefit from it? That's my first question.
When it comes to combining public and private funding, the role of national and regional banks is to provide credits to individuals, including mortgages. Well, I mean, their role is essential. The prudential rules or rules imposed by the European Central Bank could be rather excessive. I mean, that is the case in France, anyway. Are these rules planned to be made more flexible?
Irene Tinagli
So, okay. So now, I give the floor to Giuseppe Lanorca for the EBRD.
Giuseppe Lanorca
Thank you, madam Certinagli, and thank you, mister Baldwin, for convening this high-level event. I'm here in representation of the EBRD, the European Bank for Reconstruction and Development. The EBRD supports affordable housing through a cross-sectoral delivery model combining finance, policy dialogue, and technical assistance with private sector mobilization as a core strength. We do that building on our green mandate, and we do that thanks to our deep local presence in Central and Southeastern Europe. Given the scale of the housing gap and the limited project preparation capacity in many of our countries of operation, DBRD sees a constructive role for public policy-aligned private sector engagement while recognizing that public, social, and cooperative housing providers are fundamental to address the EU housing crisis.
Speaker 15
Drawing on our ability to manage the risks that are inherent in private real estate development, DBRD believes it is best positioned to act as the principal interlocutor with the private sector within the future European housing investment platform in close complementarity with other European financial institutions, ensuring that private sector participations play a catalytic role rather than a speculative or predatory one. Looking ahead to the next MFF, we identified four critical priorities to effectively mobilize public and private capital. First, broaden new grants, guarantees, and risk sharing mechanisms to crowd in public and private capital. Second, strengthen advisory support and project preparation capacity, notably under InvestEU, to enable, among other things, public authorities to better manage and steer private sector engagement. Third, better mobilize capital markets, including municipal bonds, pooled vehicles, revolving funds, and securitization, while ensuring this does not drive price inflation or speculative behavior.
And finally, use the European investment platform as a genuine demand aggregation mechanism to pull resources and deploy blended finance at scale. Thank you very much for your attention.
Irene Tinagli
So thank you very much. We have one more question from the audience. As I said, I received way too many requests. Let's start with Filip Dillig, council counselor, housing firm rep of Austria. One minute and a half.
Here I am.
Philippe Dillig
Here is Philippe. Sorry. There must have been a mistake. Apparently, I didn't read the document correctly. I thought it's some sort of attendance list.
Irene Tinagli
K. So because of this, we are the speaking cards, so what we are to fill in for those who wanted to ask a question. Yes. Okay. Tristan Safes, secretary general, Aero Gypsum.
Tristan Safes
Yes. Thank you, Mr. Chairman. Thank you very much for the presentations. We represent the European Gypsum Industries, so also representing the producers of plasterboard solutions.
Speaker 20
Very much interested to know if the repurposing of buildings, in particular, and urban densification are topics that you believe will be central as far as the financing of housing supply is concerned? Thank you very much.
Tanguy Des Roseaux
Thank you, Chair, and thank you, Madam Nakalenek, for your question. I would like to start answering on the Pan European platform, because what we've done, together with the European Commission since last year, since the launch of the web portal and together with our partners, the National Promotional Banks, is to initiate the Spain European platform and make our resources already available to different promoters. Like I said, we work with, indifferently, national governments or agencies and local authorities, even private promoters. And this is already happening in reality. So now the question is scaling it up and doing that in all member states, especially those that have been underserved or because the housing market is underdeveloped.
In terms of using the platform for associating EU funds and EIB money, we have a very good example in Portugal where we, there were some RF money, put together with the national fund to support both the development of new social housing supply and affordable housing as well. I would say also what we've been doing for some time, but we now need to, again, scale it up and maybe replicate in other places is some alliances like the one that we've done together with CDC and CEB in France, the Alliance Social. So, this is a precursor. It's a form of aggregator that we plan to replicate in the construction of the Pan EU platform. Obviously, Matthew and the task force are piloting the new Pan European platform, so we'll be just instrumental in supporting.
Matthew Baldwin
Well, just quickly to jump in to complement Tongye's answer, and thank you very much, Deep, for the question, Madam McKananek. In a sense, it's a partnership with a number of the different folks on this platform, and we're working with the EIB, with the Council of Europe Bank, with the EBRD, with the MPBI community to bring together the public and the private sector in the best possible way to do as everyone has been identifying, to mobilize as much possible private finance in support of the very limited public money that we have available. And we're doing so in support of affordable housing, but also energy-efficient, affordable, and sustainable housing. So it's very much a work in progress. You will see over the coming months the launch of this platform, and I hope in a very practical way to really bring the best possible innovative solutions to bring patient, supportive private capital to the housing market.
Thank you.
Yes. Sorica?
Sorcha Edwards
Yes. I think, thank you very much, Isabel Lekanenik, for raising some important points. I think we do genuinely run the risk indeed because of the new structure, even though housing has been named as a priority, that there will actually be no funding for housing at the moment. So I think we have to work together to make the case, indeed, that housing is a key part of competitiveness. We will not be a competitive society without inclusion, without the capacity to attract and keep a workforce and to include the most vulnerable.
We will also have to make the case that investing in housing is investing in peace. I've heard this recently in Estonia. They see good housing as divesting in investing in social peace and trust in government, and therefore defense. And this risk needs to be indeed analyzed, because we've heard from the Commission that there will be no possibility for earmarking. So we, within Housing Europe, with the team, are working on different possibilities within the KPI of the national plans and within the possibility of having a housing window in the competitiveness fund.
But this will require focused work over the next months. I also want to indeed come back on the risk that you pointed out on the debt rules. So we do have an issue definitely because as we represent public, social, affordable housing, very often, the investment is on balance sheet or considered as part of public debt. And this can definitely be, I think, an obstacle for the affordable housing plan and something to consider carefully. And on this point, indeed, many of the very sustainable systems, actually, the social housing systems in Europe, those which deliver up to a quarter of the new homes per year, indeed, we look at Austria and Denmark. They also use private finance, in a very regulated and public interest.
However, they are also at a risk, actually, of being considered as part of a deficit. So this is something we really have to avoid happening so that the EU is, on the one side, has committed to addressing the housing crisis, but then it's tripping over itself with the limits on investment. And even if that investment is private investment, publicly regulated. I think of the LIVRA IND in France or the guarantee fund in The Netherlands. We think of the revolving fund in Denmark.
A lot of them are using private finance, so we don't need to search for new examples, but it's publicly regulated private finance that is working for public interest. We have amazing examples of that in Europe, and we have to build on those. We don't necessarily need only to focus on new solutions, which are equity focused, looking at an exit strategy in the short term. I think we have to, I think this we would, we have been working on this for the last 4 years as part of our responsible housing finance working group together with the CEB, the European Investment Bank, and with parts of the European Commission. We'd be very happy to feed into the pan-European investment platform to share those good practices so that they can be reinforced and replicated by EU Finance.
Thank you.
Irene Tinagli
Okay. So, I would now move to the next round of questions, and we start with MEP Clara Dostalova.
Klara Dostalova
Thank you very much, and thank you for your participation in this panel. I have a few questions. The first one, how do you define affordable housing in practice? The second one, from your perspective, to what extent do current EU state rules limit the ability of member states to invest massively in housing? Third, in many member states, obtaining a building permit takes more than five years.
Speaker 25
From your experience, how significant a role does this administrative hurdle play? And the last one, the demand for housing investment to be better reflected in EU fiscal rules is being raised repeatedly. In your opinion, should this investment be exempted from deficit calculation as a form of strategic infrastructure? Thank you very much.
Irene Tinagli
Thank you very much. Now I give the floor to Philip Lusvelds, managing director of Build.
Filip Lusvelds
Europe. Thank you. Thank you. I'm representing Build Europe, which is the European umbrella federation of national federations of homebuilders and residential developers, especially. So, of course, it's not the first time we meet.
Speaker 24
We were here last year as well, and we have some very interesting bilateral meetings as well. And we must say, as we said in the beginning and last year when we were here, I guess, we need each other. We need to work together. On the Belgique, so we say in Belgium. So together, we can do it.
We are part of the solution, not part of the problem. And it's not always about money. Of course, it's also about being creative and administrative simplification, or even looking at some possibilities to save money. For instance, if you know that a lot of countries treat first houses, first homes, as jewels in their tax treatments on VAT. In some countries, you have the maximum amount of VAT to pay for having access to your home.
And it is, for us, really a big problem in different countries. It's not always about renting. Some people have a dream to own, certainly in these difficult times where budgets of the member states are really limiting and people want to have some security, and it's not bad to dream to have an own home. And we forget sometimes that this is also a very important thing to try to further stimulate, to have access to homes. And there, I guess that we are part of the solution.
And in some countries, we are even not allowed to get into the affordable housing market. That's why we are very happy now that Commissioner Ribera has set up a new state aid rule on the service of general economic interest for affordable housing, where there should be equal access. So if you for public and private initiatives. So because we believe that we can do it together, and we have to have the same means, because we think that we can help you, we can help the cities. We can help national governments, regional governments, and European Commission.
But please, let us work together on an equal basis and work to fulfill the dreams of a lot of Europeans to have their own house. Thank you.
Irene Tinagli
Thank you very much. Now I give the floor to, I'm not sure I can read properly. Loia Segura, head of the representation of Barcelona to the EU.
Loia Segura
Hello. It's very nice to be here. I have to say that as before my mistake, I didn't ask for the floors, but I'm gonna be very quick. I just want to restress the points made before by Mayor Qualtieri. I think the MFF is going to be the crucial, the where we need to find the crucial investment that we need to provide.
And I'm very sorry. I'm a bit nervous. But, yes, I think it's very important that we do not forget that more availability of housing for workers is very important. So we need to have the social and housing window within the ECF. I'm very sorry.
No. No.
Irene Tinagli
It is actually an opportunity, so I can give the floor to another member of the audience because we still have one minute. Give the floor to Jeva Giesseler, Head of Policy, Vestbetung Deslan.
It's.
Vespasien. Okay.
Jeva Giesseler
Thank you. Hi. Sorry for the time. Sorry. It's a permanent representation of North Rhine-Westphalia to the EU.
So I'm working for the permit of one of the regions, and I want to say thank you for this very constructive panel and for giving so much thought, especially from the Commission and from the Parliament. And we also stay in contact with a lot of people from the task force, and I wanted to say thank you for always having an open door or an open mind about our discussions. But for all of us here, maybe, in this very, very positive setting, please keep in mind the subsidiarity and to involve, like, the regions and the local authorities because it's in Germany, it's, like, a real thing for us to be part of the solution. In Northamersfalia, we already do a lot of things to push for the housing, and it's really important to keep us like a major part of it because that's really our role in the housing sector. Thank you.
Irene Tinagli
Thank you very much. Perfect in time. So now let's give the floor to the speakers. I don't know, yes, Sonica?
need.
Speaker 11
to work together. And what I appreciate a lot about this panel is really to see all of us here. You can see all of us working together. We co-finance with EIB. We share knowledge with you.
Johannes Böhmer
We share knowledge and work on solutions with the Commission. Really, this is a corporation, we are in this for the long haul. And our shareholders and our stakeholders ask us for that. Then just one additional remark on NRW. Well, yes, the demand is regional.
The demand is local. Ultimately, we depend on exchanges with you on the ground, because otherwise no project will fly. Only you know where the need is greatest and you need to prioritize us. You need to come to us, and we need to be in constant exchange with you in order to allocate the funds that are scarce. They are not endless.
Speaker 11
They are not, are they? They are endless, yes. We need to see where they are best targeted. Thank you.
Sorcha Edwards
Yes, thank you very much for the questions. How to define affordable housing? I think here, we have to take lessons from the UK. The concept actually comes from the UK. It's very much the concept was originally a financial investment instrument more than a policy approach to deliver long term affordable and social housing.
After they introduced the term affordable housing, they had to revise it to call it genuinely affordable housing because they realized that, yes, 80% of the rent in London was still not affordable and was still not in line with what people were able to pay. And this is the risk we have now. Also in Europe, that this is transferred into policy. We have, let's say, affordable housing that's only affordable for twelve years, after receiving many tax rebates, low cost land, and then investors able to step out after twelve years. I think if particularly if we talk about public investment, that's not affordable for taxpayers.
I think for taxpayers, if we're talking about investment from national level taxpayers, investment from EU level taxpayers, the most affordable housing is housing that will remain in the long term as part of the public good, and the most affordable there is either community led, cooperative, public, and social housing. Yes. It's not the entire stock, but what we see when you have a critical mass of this type of housing, then you can handle much more effectively homelessness, you can handle much more effectively women fleeing domestic violence, and it can have a stabilizing impact on the general housing market and also on the construction sector. So we've seen through the crisis that actually the limited profit sector, when it has a large capacity like we see in France, like we see in many member states, it can actually maintain action in the activity in the construction sector. So this is the most affordable.
You mentioned permitting. Again, I think subsidiarity, I mean, there is a huge added value in exchange on this topic, and I think we're seeing that in the work of the task force. Generally, huge added value, but, of course, it's when we talk about permitting, it's very much a subsidiarity question. On fiscal rules, you mentioned, but we already spoke about that. Definitely, it could be a real obstacle on the road to delivering more housing.
Thank you.
Matthew Baldwin
Yes. Thank you. Just very quickly to pick up on the building permit time. This refers to a big exercise we're leading from inside the commission on simplification. And I mean simplification, not deregulation.
Looking at what possibilities there are to address within European legislation, what we could do to make life simpler and easier for everyone concerned, both for new construction, but also for renovation and all other aspects. That needs to be done at all levels. We're starting our work inside the European Commission on that, looking at all the European legislation during the course of this year. Next week in Cyprus, there'll be a discussion between member states and what they are doing to also address similar issues. We need to work in a joined-up way on all of these different issues.
I now have to run to speak at another conference on financing of affordable housing and energy efficiency, but I should be back. And thank you very much, if I may, to all the panelists for a really good discussion so far. Thank you.
Thank you.
Be back shortly.
Irene Tinagli
Thank you very much, Smeti. Now I give the floor to mister Desrosso, who wanted to add something on this point.
Tanguy Des Roseaux
Yeah. I just wanted to add something for Matthew's benefit, but others will listen. I just want to highlight the strong, very valuable contribution by the commission for advisory services that we can provide, especially under the Invest EU. Because all these questions, whether it is definition of affordable housing, it's what to do with the fiscal rules or state aid, I think it is something that we can get involved with in the discussions with the local authorities. We have examples in Latvia with 13 municipalities, examples in Croatia with five larger cities that we've advised to structure the affordable housing market and social housing market.
So I think this is something to bear in mind, is that there are also resources provided by the commission for this purpose of advising on this market segment.
Irene Tinagli
Thank you. Thank you very much. Now we move on to the next round, and I give the floor to MEP Giorgio Tramaceri. Buenjana, you speak.
Giorgio Gori
Thank you very much, Madam Chair, for the excellent work that the House committee is doing. I'd like to welcome all of our colleagues and thank all of the speakers we've heard. I think Rome's experience shows us, as the mayor has said, that cities can really take a leading role in responding to the housing crisis. We've obviously heard about distortion of the housing market and the need for affordable housing. But I think the experience that we've had shows that we need to have adequate European support.
And without that, even the most ambitious initiatives are not going to be able to live up to their expectations. With the MFF, we've got the responsibility to guarantee we can provide funding for these programs that will enable the good functioning of the cohesion funds, helping us to balance out the territorial imbalances that we're seeing more and more nowadays, particularly when it comes to housing. And so there's a dual risk here, political and economic. And I think we need to ensure that we can have a very strong response to that housing crisis. I think that's something we need.
Europe needs cohesion more than ever. I think this is a real generational challenge that we're facing. And as has already been said, we need a coordinated, ambitious response, with the necessary funds as well. Now I just wanted to ask when the commission is planning on providing us with the report looking at the broader plan on housing. I have to say, in the EMCO committee, particularly, we're concerned about the delay in providing this.
Thank you.
Irene Tinagli
Now from the audience, I give the floor to the minister counselor from the permanent representation of Croatia to the EU. If you can also say your name, which I couldn't pronounce. I apologize for that.
Jelko
Thank you very much for the floor. My name is Jelko, and it's very good for you that you did not try to pronounce it, because it breaks my tongue in my language as well. My question was actually already answered in the first round of questions. It was on the platform investment platforms. Platforms.
Irene Tinagli
Thank you very much also for being concise. I give the floor to Theodora Borrego Quelles, president of the European Short Term Rentals Alliance. Good.
Theodora Borrego Quelles
Morning, and thank you for giving me the chance to be here today on behalf of the European Alliance of Short Term Rentals. We represent individual owners and local economies. I'd like to focus on something here, which may be a bit contradictory. We have a significant problem throughout Europe, including in large cities, and that is a shortage of housing. But I think we need to focus on large investment funds, especially American ones.
These funds are buying buildings, full buildings in city centers, throwing out owners to turn them into pseudo hotels. And these really are pseudo hotels, and they're flouting the regulations and rules for hotels. This is something that we've seen in many cities, and especially in Spain. Blocks of houses have been built with European money, and after a certain period of time, these buildings have been sold to turn them into pseudo hotels. So I think we've got a significant challenge here, and there's a very fine line between building more houses and having affordable houses for families, but also ensuring that the regulations are properly enforced to prevent these investment funds from acting.
Now small owners who rent out their houses is something which boosts the local economy, but that's not the same as a company building or rather buying a full building and creating these pseudo hotels. And we know how these things work. Now, when it comes to the short-term market, well, I think that we can deal with that issue. That is one part of the problem. And I want to thank you again for allowing me to speak in Spanish because that allows me to speak more freely.
And, again, just to reiterate the problem that we see, we have friends, families, employees who need affordable housing, and we must do it utmost. Thank you.
Irene Tinagli
Now I give the floor to the panelists. We need to be very short because we are running late, but I think we had very interesting points coming out from the audience, and also how can we make sure that there is adequate funding also in the next MFF? And how can we make sure that this funding and all the instruments and projects we put in place do not fuel speculation but really help bring back the market to a more physiological functioning and respectful of the local residents and the local economies, if this is what I understand. Who wants to start? Yes.
Mister Des Rousseau?
Tanguy Des Roseaux
Thank you, chair. Yes. Indeed, we understand that there is a very strong risk of speculation, and that has been identified from the outset. What we do at the European Investment Bank is that we put very strict conditions in the loans, to support affordable housing, social housing. We implement safeguards so that the assets that we finance remain affordable housing.
Therefore, as a matter of principle, we don't allow the resale of these assets. And if we were to consider it, we would need to ensure that they remain affordable over time. That means, it could only be bought after a certain time. It could only be bought by tenants that are not owning a property. So that answers your question about those most deprived ones.
And, we could even put conditions about, beyond the preemption rights by the public authorities, conditions about limiting gains on resale. So, I mean, we, it's very much scrutinized, and it is not something that we support as a matter of principle.
Irene Tinagli
Thank you very much. I don't know who else wants to intervene. Soraka, yes?
Sorcha Edwards
Yes. No. Thank you again for the opportunity today. I think the priority now indeed has to, our priority has to be, for those of us working on housing, has to make sure at least this stays as a priority and that we do manage to, let's say, make the case vis a vis the other many other priorities that are there. And I think it's an easy case to make because each euro that is invested in housing comes back in multiple euros.
So I think this is going to be our priority, and then to make sure that any finance that comes from taxpayers is reinvested in the economy and is not invested into speculative housing projects. And I think on this point, indeed, the governance, the local governance is crucial. It's not only about making the eligibility possible at the European level, while that's a big part of it. Our focus, and I think it is working well, is to make sure you have the absorption capacity at local level, the long term absorption capacity, whether that is local authorities, housing providers. And this is, we cannot have a blind spot here.
We have seen the in cases of the ROF where funding was distributed and did not really have the impact that we were hoping for when we planned that. So we have to work on local governance. We've been doing this, trying to build up more sustainable eco housing ecosystems so that you can have long term absorption of funds and making sure that those funds meet housing needs at a local level and generate the neighborhoods that we are future proof. So I think we would be very happy to contribute to the Pan-European investment platform with the work we've been doing over the last five years on that, to make sure we don't lose sight of the importance of the absorption capacity, and to make sure we don't miss our final goals for a decent housing for all in Europe. Thank you.
Irene Tinagli
Thank you very much. If there are no further replies from the panelists, I would now close the first panel and open the second one on construction, and just take a few seconds to change of scenery here so we can have the new name tags of the next panelist. Okay. I would say we get started, and I really ask all the speakers if they can kindly stay within the two minutes and a half, no more. So I will try to be stricter.
And I also want to welcome Stefan Moser from the task force of the European Commission for joining us. Now let's get started the second panel, Areas Under Housing Stress, the Affordable Housing Act, and the Construction Sector. So I start by giving the floor to Federico Brancaccio from ANCHE, Italy, for an introduction.
Federico Brancaccio
Good morning. Thank you very much. I'd like to thank Irene Tinale very much for arranging this meeting. This isn't such an important topic. It's more than just a topic for the future.
It's a topic to ensure we can actually have a future, and it's something which is a big risk for many of our European citizens. It isn't just a problem which affects the most fragile in our society any longer, but it really affects everyone. And it's a serious crisis which needs an urgent response. A house is not just a roof over your head or a consumer good. It is social infrastructure.
And so we need a policy for housing which has a real systemic approach, not something which just responds to crises. And I think using the experience from Next Generation EU, which has worked wonderfully in Italy, we need to ensure that, and in fact, this is something that we heard about in the first panel, we need to ensure that areas can become more competitive. They need to be able to attract talent, and they need to ensure that their businesses can grow. Currently, that's not the situation, though. Often, people say that if you can find a house, there isn't a job.
If you can find a job, there isn't a house. And I think we need to ensure that we've got financial, fiscal, and regulatory measures in place. I think it's very good. We've got the European Affordable Housing Plan, which is looking at bringing in procedural simplification. In Italy, this is all the more important given that the actions that we have taken in citizens really stem from a policy from 1942.
It shows, I think, just how long housing has been an issue. And so it's incredibly important and high time for us to ensure that we can resolve this issue. We need to have partnerships and flexible measures in place. Another lever that we can pull on is the financial one, of course, access to credit. The cost of loans is too high at the moment, particularly, of course, bearing in mind the geopolitical situation, but it makes it very hard for both businesses and for families.
And so we need to ensure that we can use the prudential measures and financial measures available to us to make things easier for families. We believe that we should be able to leave this threefold, if we do it properly. It's also vital for us to analyze the social impact, environmental impact, and the sustainability of new housing policies. It's only once I think we've got a rating that we should ensure that measures can be triggered. And we also, of course, need to make sure that the measures we take do not have a negative impact on the environment.
We are working at the moment with a lot of companies to try to create a real strategy to adapt housing to the climate crisis. And this is something which is very closely linked to our European housing plan. It will have an impact on our cities. Cities really can become an experimenting ground for measures helping us to combat climate change and adapt to it. People have always been able to adapt.
We just need to think about Italy, about Roman aqueducts, about all of the measures that have been taken in the last century and in this one. I think we've shown that people can adapt. In a lot of countries, we're currently seeing measures brought in to limit the sale of houses to third parties. And I think this is very important, but we also need to look at private investment and public funds providing a public guarantee in order to lever more private funds. I think the European strategy for the housing sector is very important, but we need to avoid any kind of ideological position here.
Nicolas Mackel
Yes. Thank you very much. I'm representing the free and Hanseatic city of Hamburg today, which is important to know that it's both German land, one of the German regions we have, and a big municipality. And what I brought you today is a practical example of how construction costs can be dramatically reduced. And this is kind of our answer to the European housing crisis and to support affordable housing.
Eva Maria Castelletti
In Hamburg, we are facing a dramatic decline in building permits issued. And it was the aim of the initiative for cost-effective construction, the Hamburg Standard, to identify opportunities how to reduce these costs. And the impressive result is that we found out that it is possible to reduce construction costs by up to EUR 2,000 per square meter of living space. This doesn't work. Okay.
Speaker 34
No. Sorry. This was a bit too fast. Here we are. Who was the initiative?
The initiative was formed by about 200 professionals from all over the construction sector, including public authorities. And how do we reach these up to 2,000 construction savings? We've got three key areas of action. First one is the building standards. There are lots of building standards both in the EU and on the German national level that exceed the needs for good quality housing by far.
And for example, we identified the thickness of the walls or sound insulation of floors. And by adding all these examples, it's possible to save up to €600. Simplicity and low tech. Is it really necessary to have an underground car park in every dwelling? Is it really necessary to have a basement in every house or an elevator? By considering these factors, it's possible to save up to €1,000. And then very importantly, and this has been mentioned already, the optimization of processes and planning and the acceleration of procedures.
And here, it's possible to reduce the costs by up to €400. And why is this so important for the further European discussion and for the process we're in? Everybody here identified construction costs as a very, very, yeah, cost driving factor to actually impede affordable housing. And I think we've provided a good example of how it is possible to reduce these costs. Further information can be found on our web page.
Thank you very much.
Irene Tinagli
Thank you. Thank you very much. And now I give the floor to Ivana Katurich for two and a half minutes.
Ivana Katurich
Thank you so much. Well, this panel was a little bit structured around the construction, but then stress areas, affordable housing act. And what I wanted to focus on is the housing system. I think that if we are discussing all these topics, we need first to start to discuss and to put it at the center of our topics, the need for a stronger housing systems. I think that, with the work of the housing advisory board that I was a member and the key recommendations that we have produced.
And, also, if we look at the research, in the housing, we all know that affordability is not produced automatically by construction volumes. And how affordability is produced, there is a knowledge unlocked within the European systems of some member states. And in some countries, nothing exists. So we had high levels of privatization of the housing stock. So our goal here, the goal of the affordable housing act, the goal of the next generation of the funding as well, is really to help build resilient housing systems.
And this is the focus of the discussion, the focus of the work that we have to do together. And the second thing that I wanted to say is that by strengthening the housing systems, it means to strengthen public providers, municipal housing company, nonprofit associations, cooperatives, limited profit providers, the full institutional architecture of housing. And we have written several recommendations on this topic, and this is something that really is a constant of the work that we have to do in the future. We did a huge work on how we can avoid speculation and how we can really make the affordability permanent, and this is something that we really have to think about. The second, the topic that is very often forgotten, is the role of land.
So if we are going to leave the question of how the access to land is granted at the margins of the discussion, it can happen that the subsidies that we are providing in the different formats for affordable housing are going to trickle towards the speculative land acquisition. We have provided a set of recommendations on the question of land, and this is something that is completely nonexistent in some of the member states. So to learn with the public sector, to enable them to really work with the mechanisms of the land acquisition, land banking, inclusionary zoning, so all sets of topics that we should really discuss and take into consideration. And I'm a little bit too long now, so I will try to be short, but I just wanted to say about the short term rentals. There is a recommendation 33 that we wrote as a housing advisory board, and I find that the discussion on the short-term rentals should really focus on profit regime.
So it is completely different if we are speaking about short term rentals that are supplementary welfare for a family or if we are talking about the large scale operations that are really making the critical imbalance in the access to the housing in many of the cities. So this focus is something that I hope we will discuss in this panel as well. Thank you.
Irene Tinagli
Thank you very much. And now I give the floor to Rolf Van Rumpei, head of public affairs of the Ethics Group.
Rolf Van Rumpei
Yes. Thank you very much. First, I'm very pleased that I can give an industry perspective to this discussion, and hopefully also come with some good news. It's not all that bad. Technically, there are a lot of possibilities to create additional housing in Europe.
First of all, renovation. As you know, Europe has by far an older housing stock than other continents. So a lot can and must be done to make that housing more energy-efficient and at higher standards. This could also include repurposing. In Brussels, there are a lot of office buildings which are vacant, which could relatively easily be repurposed into residential housing.
And at Etechs, the company which I represent, we provide the materials for that, which are, for instance, plasterboard to renovate internal walls, or mineral wool insulation to insulate roofs or attics. But we also believe in something else, and which is the new kid on the block, which is called off-site construction, where you basically produce, manufacture part of the house in a factory environment and not always everything on-site. We have chosen to do that with two D panels. So basically, we build walls in a factory setting, which are then assembled at the sites with a steel frame. With this technology, we can go up to 15 stories high.
So it's for big buildings. And it's currently already used in Ireland, the UK and some other countries for student housing, social housing, elderly housing. And why I'm making the case for off-site construction in the framework of affordability? There are several benefits to doing off-site, and I'll name five. The first one is that it can reduce construction time by 30% to 50%.
Now, why is that? Many explanations, but one of them is that in a factory setting, they are far more efficient. And when you look at how a car is built today in a factory, it's far more efficient than it was fifty or one hundred years ago. Also, you can work in parallel. In traditional methods, you need to do the foundations first and then wait, and then you can start building.
With off-site, you can do the foundations and in parallel already make the house or the walls in a factory environment. And, for instance, also weather doesn't affect that much the construction. You can continue, making off-site, when it's extremely cold or extremely hot. The second, and that's probably even more important for this forum, is the potential for cost reduction. Actually, today, a study is launched by BPIE showing that off-site can reduce building costs by 25 to 30%.
One of the reasons is less labor involved or less labor intense, cost, but also financing costs go down because the building cycle is much faster. Third, societal benefits. If you live in a city and there's a building site, you know what kind of disturbance that can create, or the road is blocked, there is a lot of noise. Obviously, when you do off-site, these are reduced. And also a societal benefit, and maybe also linking that to the next panel, is that it's also a way to attract new profiles to the construction sector, which has long been very traditional because, obviously, in off-site construction, digital becomes more important in project management.
The fourth benefit is less waste because you do it in a factory setting, you're far more accurate. And as you combine materials, you can also easily disassemble them at the end of the lifetime of the building, which enables you to reuse these materials or to recycle them. And then finally, and I'll stop there, obviously, these buildings are highly energy efficient. So people still have this idea of prefab in the seventies, low quality, that has evolved in the last 40 to 50 years. So today, in an off-site building, you can't really see that it was built in a different way.
Thank you.
Irene Tinagli
Thank you. Thank you very much. Now we open to the questions, and I start with MEP, Zabelella Lekalenek. Yes.
Isabelle Le Callennec
Thank you very much, madam chair. Our parliamentary report on housing, which was adopted in March, insisted on listing things that can stop innovation. Now I just heard you talk about the need for simplification, to respect subsidiarity and the need to involve regional authorities. Those are all things which are in our report. I also heard you say that standards sometimes go beyond what is needed.
Well, in France, we've got the 2020 regulation, which I think is sufficient. Now my question would be, do you think the EPPD on performance of businesses, energy performance of businesses, needs to be revised in relation to increasing construction costs. So that would be my question to both of you. Now in paragraph five of our parliamentary report, we asked, and this is a question to the task force representative, for a complete evaluation union-wide of relevant legislation, which affects affordable housing, quality housing, and environmentally friendly housing. Now here, the commission and the court of auditors, we have called on them to create a report on this.
Irene Tinagli
Thank you very much. Now from the audience, I give the floor to Barbara Steenbergen, the International Union of Tenants.
Emiliano Roketti
So, it's not Barbara Steenbergen. She could not come. So, Emiliano Roketti, policy officer at the International Union of Tenants. The International Union of Tenants is the only organization representing tenants' rights at the European level. And, we are present in more than actually, all over the world in more than 75 countries, with more than 50, almost 60, actually,
organization.
Emiliano Roketti
So on the subject of this panel, the IoT, of course, welcomes the ongoing work on the affordable housing act and to better identifying housing stress zones. However, as our contribution to the questionnaire of the commission highlights, each member state defines and monitors these in different ways and through different indicators reflecting different social realities and market structures. Definitions, therefore, rely on different combinations of indicators such as the housing cost overburden, supply shortages, and demographic change. At the same time, it's important to stress that too strict and rigid rules at the U level risk overlooking local dynamics and household-level affordability challenges. So my question to all the representatives on the panel, which are from construction, urban governance, and industry, is how do you see a new framework for identifying housing tension zones, striking the right balance between ensuring comparability and legal certainty across member states, preserving flexibility needed for local authorities to reflect real housing conditions on the ground.
Additionally, I would like to also stress one indicator that was not mentioned, at least, like, as one of the possible indicators in the questionnaire, of the Affordable Housing Act, which is, should be speculation and financialization of the housing market, which is a real indicator of housing tensions in many areas of Europe. Thank you.
Irene Tinagli
Thank you very much. Now I give the floor to Elizabeth Alves Diaz, directrice Federaciones Enterprise Social Pogolabita.
Speaker 41
Yes. Thank you. I didn't really have any questions. Honestly, this was about the first session.
Irene Tinagli
So the floor to Eva Maria Castelletti, policy and advocacy assistant, Caritas Europa.
Peter Kamerling
Thank you very much. Commoning Spaces Network is a European network of community-led houses. I have two questions. We can see that depending on the region, 10% to 30% of the housing units are abandoned. So we do have enough houses.
Renovation is faster, more affordable, and more sustainable than demolition and new construction, which is the most common way to do it. Civil movements usually want to renovate. Will you give legal leverage for the reactivation of abandoned buildings to social movements, NGOs, and others? The second question is subsidies, affordable credits, risk sharing, and public regulations are crucial for affordable rents. We highly appreciate all your efforts.
All of them, or mostly all of them, after 20 to 30 years, always flow into the profits of owners and investors and do not stay permanently for affordable housing. How will you address this, for example, in the European Housing Act? Thank you very much.
Irene Tinagli
Thank you. Who wants to start from the panelists? Okay. Yes, please. Sorry.
I didn't see you.
Eva Maria Castelletti
Okay. Thank you. I'll start with the first question. Thank you very much. This question is very relevant for us in Hamburg, indeed.
In Hamburg, we are strictly committed to the climate change goals, to the goals of carbon neutrality, and we even face stricter standards in Hamburg regarding this because due to a referendum, the whole city has already or must be climate carbon neutral already in 2040, which is much earlier than other legal goals. So our policy regarding the housing sector is strictly decarbonization first. So we focus first, how is it possible to change heating systems to carbon neutrality, to use renewable energies for heating systems? And as regards renovation of the existing buildings, energetic renovations, our approach is if parts of the building reach the end of life, then it's okay to do the energetic renovation. And then that has to be done for social reasons, to reduce rent costs, and to provide for affordable housing.
But, again, we need an approach, decarbonization first, and we really, yes, are committed to this approach. And another important factor as regards big housing companies, companies who hold a lot of residential housing in their portfolio. That would be really necessary to provide for a cross sector sheet of carbon neutrality. For example, if some houses in these portfolios already reached high levels of energy efficiency, it's very useful to support the way toward climate neutrality in 2040 by allowing, at least for a certain amount of time, to calculate the not so good buildings in this portfolio to make a financial approach. Thank you.
Rolf Van Rumpei
Yes. I also would like to come back to your question on simplification and lowering standards, or what to do with the PPBD. I think it's a good idea to look at standards and to see if they are all necessary, and I think this is what Hamburg has been doing. But I think it's dangerous to not have standards at all or to lower them too much, because we're thinking of energy efficiency of buildings, and this is what the EPPD is about, is also about affordability, but affordability in the long run. Because if you have a building which is well insulated and can be heated or cooled with a heat pump, your operational costs over the lifetime of the building will be low.
So cutting standards on energy efficiency will lead to cheaper housing from the start, but will be more expensive housing in the long run. And then on the point on shouldn't we renovate more vacant buildings, I think it's not or it's an end to end. I think renovation, yes, this is my first point I made, and we have a very old building stock in Europe. So let's do lots of renovations to bring them up to standard, but it will not solve all the issues we have. So you also will have to have a new build or a combination.
Basically, you can also have an existing building where you add one, two, three floors with off-site, again. So I think it's a mix of measures also depending on the region, or the city.
Thank you.
Ivana Katurich
I would like to add about the real cost. I think that Serge has said what is affordable for the taxpayers. So this is something that is a topic we really need to take into consideration. We know that we want to recycle buildings. We want to recycle land.
We want I can see Cecile from the compact city partnership, Mihaela from the housing partnership. So there is a strong agenda towards this. But how to implement this in the local realities with the current legal systems? This is incredibly difficult. So it is about the mechanisms that can work at the local level.
And also, there was the question which is related to stress zones, how to deal with them at the local level. The question is also about data. In some cases, you are waiting for six to eight months together, the basic data for the municipalities to calculate the housing gap. And these things are things that should be resolved from the, I would say, European and national levels in order to make it workable at the local level. So it is about the housing systems, housing action plans, something that is working on all components of the systems that is including the land recycling where we build.
The easiest solution now is to promise high numbers to build on the periphery, something that is, in the short term, cheap, but in the long run, it is very, very expensive for taxpayers. We will pay for the infrastructure, for the maintenance, and at the end, we will create environments that are really not beneficial to our communities. So to build the systems, to build the providers, but also where to build and under which circumstances, these are the questions that we have to resolve now in the policy environment. Thank you.
Irene Tinagli
Thank you very much. We move on to the next round of questions, and we start with MEP, Leila Chaibe.
Thank.
Leila Chaibi
you. Hello, everyone. I'll just give you some time to put your headphones on, because I'll be speaking French. I wanted to highlight a study which was published recently from Etui, which says that in most European capitals, the rent cost is above the minimum salary. It's over €700 in Czechia and Prague, as well as in Lisbon and certain other capitals such as Malta.
So that raises the question of what a tense housing market actually means, of course, in the context of building, but also in the context of the Affordable Housing Act. What's a stressed area? Is it an area where there's not enough construction, or when there's a discrepancy between offer and demand? Are there other reasons such as vacant housing rent, which is too high, houses which are left vacant by people who own multiple homes, or when they are engaging in speculation? Is it due to short-term rental?
So I would like to have the opinion notably of Frederic and Micheal or Ms. Katurit on this. My next question is on construction. This mainly relies on subcontracting. So that raises questions in terms of work conditions and environment.
Are you ready to accept aid from the European funds or the EIB when we are thinking about these environmental conditions? So this is directed at the panelists, particularly Mr. Laurent Pais.
Irene Tinagli
I give the floor to Lorenzo Gottsmeets. You are a fair adviser, association of Netherlands municipalities.
Lorenzo Gottsmeets
Pushing the wrong button. Sorry. Thank you very much. Yes. I'm representing all the Dutch municipalities.
And I like also the fact that we're now talking a little bit about the criteria for the areas under housing stress. I would like to welcome the support that the UEP and also the commission puts in addressing this issue of housing crisis. But I would like to warn for a European definition, since it's already stated before there's a lot of differences in collecting data between regions and cities. So we risk ourselves to give even more administrative burdens, trying to prove that you're adapting to criteria for that at a new level. So, caution with this one.
And I think the European Commission really tries to solve the issue that is actually in the service directive to regulate on short term rentals. So why not just adjust the services directive instead of creating a new act to solve this issue? Then also, towards the MEPs, I would like to ask caution for the plea to have a fixed sixty day deadline for building permits, since there's different situations in different municipalities and different building sites. So there needs to be made a real adjustment and assessment per case to see what is possible regarding time limits. Then three things that can be done at the EU level: set clear standards for off-site construction, specifically uniform EU guidelines and legal clarity on what constitutes circular and interpretation of the end-of-waste status in the Circular Economy Act.
And we would also call the European Commission to enter into negotiations with the World Trade Organization on reforming the government procurement agreement in order to raise the EU thresholds for construction contracts as well as for supply, service, and freelance contracts. And finally, specifically and clearly exempt housing corporations and municipal land acquisition companies from the anti-tax avoidance directive to free up investment for affordable housing. Then to end with a question, to both Mister von Rumpay and Missus Mechel, because I really like the example from Hamburg, where do you see space for more harmonization of building standards at the EU level?
Irene Tinagli
Thank you very much. Now I give the floor to Katharina Erdmann Ger, Secretary General of the Architects Council of Europe.
Katharina Erdmann Ger
Yeah. Thank you very much. Thanks for the opportunity to participate in this, very, very interesting debate. Just for the architects council of Europe, which is basically the umbrella organization of the architects chambers in Europe, a few remarks and a very short question at the end. We too basically very much support, of course, this discussion and the aim of providing affordable and quality housing for all.
I'd just like to introduce a few more aspects of the debate, which maybe have not been that much touched upon today. One is actually the sort of the local ownership of building and construction projects. They're, again, very much like the example from Hamburg there. But to have these participatory processes in building as early as possible in the process, so they're actually owned by the communities, which in the long term also can also lower cost because if you integrate the people who are living in a certain spot as early as possible in the project, you avoid social cost at the end. And then that process, of course, is to include the architects and design as early as possible.
And that's my other aspect. That is actually the quality of the buildings. Architects are people who will be able to provide a lot of knowledge and actually the quality, the livability of buildings. We very much, in this context, support all that has been said about renovation and the possibility to reuse buildings, support a lot of, of course, what you also said about the life cycle of buildings and the lowering of emissions. But if I may, one more point there on the idea of off-site construction.
I'd really like to react to that. Of course, there may be a lot of advantages to that, but we would definitely call to make it more a component-based approach, again, here to be able to include aspects of design and quality of design in the off-site to avoid uniform deconstructuralized buildings. Really, so, again, to link it back to the community, link the house to its context, and give it good design, which actually doesn't have to increase the cost if you have a good quality design. And so my question there is actually how to all the panel, how you are considering actually the principles of the new European Bauhaus. Those could actually be very much read as a unified European quality benchmark for good quality buildings.
So how do you integrate those, the new European Bauhaus, and your reflections? Thank you.
Thank you very much.
Eva Maria Castelletti
Who wants to, yes. Missus. Okay. I can start again. First question addressed to myself was, what's the criteria for areas under housing stress?
And, under German federal legislation, we've got regulations regarding this, and these regulations provide various definitions in order to provide the flexibility that is needed to declare an area under housing stress. You mentioned correctly that there are various factors that can put housing markets under stress, and this German legislation exactly provides for this situation. In Germany or in Hamburg, the whole territory of the city of Hamburg is declared by an ordinance of the Hamburg Senate as an area under housing stress. And the reasons are various. The main reason is the demand for affordable housing far exceeds the supply.
We've got very few offers of new rentals and rising costs in new rentals. And not rising costs, but exploding costs in new rentals. And that's our reason why our housing market is declared an area under housing stress.
Mister Van Rumpey?
Rolf Van Rumpei
Yes. I can touch upon a few points. First, there was this question on what can be harmonized at the EU level. And the gentleman made reference to circularity. I think so, indeed.
I mentioned many building materials could be recycled or reused, but we need an ecosystem to be in place to handle that. And I also have high hopes that the Circular Economy Act, which will come later this year, will boost recycling or the reuse of construction materials in the EU. What can be standardized more? One thing pops up, which is the whole life carbon approach. We have very different building materials in Europe, the very traditional ones made from cement, for instance, or the more modern ones made from wood or other kinds of bio-based materials.
For me or for us, they are all fine. But we should, of course, when we talk sustainability, compare apples with apples, which means looking at the full life cycle of these materials. So from the inception of it until the end of lifetime, and then we can make proper sustainability comparisons. And then the final point on off-site construction, I'm going to be a bit provocative towards the architects. Not every building made by an architect is beautiful.
There are also very ugly buildings, made by architects, as there are also off-site buildings which will not be so nice and ones which will be nice. So I think, obviously, the design, the quality of design, is extremely important. And I can assure you, at least with the two d methodology we use, which is more a penalized approach and not a full house, the design can be adapted and is very much integrated into the area. So I think, again, it's not black and white. I don't think that every off-site has quality.
Ivana Katurich
Yes. Please, miss. So, yeah, there are many interesting questions. It's not so easy to answer. So first, concerning the criteria for the areas under housing stress, it's maybe a better question for commission.
There are many different recommendations in which direction we should go. I think that there is always a need to design a set of indicators, of course, to include financialization and speculation as one of the important sets of indicators to understand really the situation on the particular market, the short term. I mean, there are so many indicators, but I think that this is, how I would say, the bank of indicators that you can use. But in reality, who is going to use these indicators and how are we going to step forward? There is a gap.
There is a huge gap between the knowledge that is needed at the local level in order to assess the situation at the housing market, the capacities of the local level really to work in the direction of understanding the housing systems, what should go first, and the action plan that they should make that is looking integrated at all aspects of the housing system. So I think the implementation factor is critical. Sometimes when we are discussing at the European level until it arrives at the city level, there are so many filters of the national level, of the regional level, and so on. And at the end, when you are arriving at the practical implementations, then you understand that there is no data, there is no knowledge. There is so much knowledge, but you don't know which knowledge is right.
So these things should be really specified and worked upon in order to make it realistic, to make it happen. Otherwise, we will have, maybe one set of regulations, one dimension that maybe we can regulate for from the European level, but many other dimensions will float around. So this is also related to your question about the new European Bauhaus, about the recycling of the land, recycling of the buildings. Policy directions are, I would say, sort of consolidated for quite some time. We know in which direction we want to move.
But how to translate these directions into the reality of the European territory? There is still a huge work to be done. So one is the conditionality of the financing. So, for example, EIB is already working in this direction. They are discouraging the diffuse development of the housing.
So this is one huge step forward. I will cut it down. So I just want to say that we can divert really long about the frameworks, but I think that we should divert really a lot about implementation mechanisms. Thank you.
Federico Brancaccio
Thank you. I'll try to respond a little bit to all of the very interesting questions that were put to us. Housing stress, I think, very clearly is connected to the labor market. And I think here it tends to be mostly in big urban centers where there are a lot of jobs, and that creates a market, of course, and creates an unsustainable increase in costs. And so I think that's something that has to be looked at when we're looking at the major housing plan.
We also have to be looking at infrastructure, which would enable us to reduce housing stress in our big urban centers, so that we can kind of spread it out a little bit towards kind of medium sized towns and cities. Now on, the quality of architecture here would say flexibility is also incredibly important in providing answers in the future. I think if you look at our buildings in Europe, they are quite old, and they don't necessarily correspond to the needs of modern society. And so we have to try to be flexible. We have to understand that in 10 years, needs will be different again.
Now on building costs, obviously, I represent business owners, but I think what is absolutely fundamental is for the rules to be clear and certain. I think otherwise, we do risk a further increase in costs. We've already seen a 16% increase in costs. And so I think that's the first point. Now, industrialization of the sector is another.
I think that's somewhere where we do need to be careful. Adaptations need to take place in the medium term. And I think we have to look at what can be done. We have to ensure that, we I mean, we are looking at more and more industrialization in many countries, and I think we need to ensure that we can maintain European strategy and make sure that European businesses are investing in off-site. I think that's incredibly important.
Now there was something else. Yes. Sustainability. That obviously is very much linked with growth and adaptation. I think here, we have to ensure that we can adapt as a private sector as well, and we have to make these kinds of adaptations to buildings obligatory.
We have to take into account the social and environmental impact of housing. And here, I think, is where the ratings and the rating system have a big role to play. I think it's an opportunity for us to ensure that buildings are built correctly and adapted correctly, that they do respond to our needs in terms of climate, social issues, and cultural issues as well. Thank you.
Nicolas Mackel
Okay. One last thing regarding harmonization. When it comes to construction costs, it's not just, or it's not so much the question what can be harmonized, but the awareness in the harmonization process of the cost driving factors of harmonization. So I'd strongly recommend in the harmonization process to strictly adhere to the objective. What do I want to reach with the harmonization?
Eva Maria Castelletti
What's the objective of the harmonization and not go beyond that? Because, as I mentioned, up to 600 can be saved by sensitive, harmonized billing codes. Thank you very much.
Irene Tinagli
K. Thank you. Thank you very much. Super interesting. Now we need to close this panel because we are running late, and we need to move to the third panel.
Speaker 52
So thank you very much to all our guest speakers, and just a few seconds to allow the change of scenery here, before we move to the third panel. Okay, colleagues, please let's proceed. So panel number three on housing and young people, access, affordability, and future prospects. And I start right away by giving the floor to Tito Rodolfo, Martha Galassi.
Good.
Tito Rodolfo Martha Galassi
Morning, everyone. I would like to thank the chair, Mister Nayle, very much for holding this event and inviting us to be here. Our organization helps students ensuring the direct involvement of student decision makers into the whole process. And here, I think it's an incredibly important question to ask, and that is why the housing crisis affects students. I think very clearly, this is because there is a real gap between the desire of Italia citizens to be able to live near where they study and the reality.
Students find it incredibly hard to access affordable student housing. The majority of us, in fact, in order to live where we study, have to turn to private rental agreements. We need to have large university cities able to actually provide better housing. This is a topic which in 2023 caused student protests where students stood outside the university asking for a very simple thing. There was even a student who had to sleep rough in order to be able to study.
And so, how are we going to respond to this in the EU? The EU affordable housing plan, particularly the fourth pillar of it, is a very good place to start, but we need to ensure that we can monitor the progress and ensure that it's actually effectively implemented in the member states. And in order to tackle this topic, we need to ensure that more student housing is created, and that we can get students out of private rented accommodation. Here, in many cases, for example, in Italy, in Milan and Rome, there are many private landlords who are speculating on the student housing market. This is something we heard about in the first panel, and we know that quite often, student housing sits above standard rental prices.
It's even more expensive for students than it would be for a normal citizen. We therefore need to stop the speculation on the market because it means that students no longer have a right to learn and study. We therefore need more student accommodation to be provided, and for there to be funding for students as well. Thank you very much. Thank you very much, and thank you for sticking to the time.
Irene Tinagli
I give the floor to Sarah Velodre Perez, vice president of Consejo de la Torre in Espana.
Good.
Sarah Velodre Perez
Morning, everyone. I will start by giving a brief overview of the situation of youth in Spain, but this is true for young people throughout the European Union. Now perhaps it's a bit obvious to say this, but it's actually not a negative overview. Young people in Spain and in Europe see becoming independent as a distant dream. Only 15% of people in Spain are able to leave their homes, and this is the worst situation it's been since, I mean, 15 years ago.
Speaker 54
We've had COVID. We've had other situations. And it's not just about numbers, our life plans are being put on hold, work plans. And this generation lives in uncertainty, and that is the norm. We don't know what the future holds for us.
So the situation is becoming consistently worse. Public policies have improved the conditions of young people in the working market in recent years, but there's still an elephant in the room, housing. 92% of a young person's salary has to go towards housing costs if they want to live on their own. Otherwise, they have to share a flat. If we want to buy a house in Spain, it would take four and a half years of our salary without using the money for anything else to buy a house.
And so it's not just an economic issue. This is impacting the mental health of young people because, I mean, this is constant uncertainty, and it's difficult to be young. So living in shared housing with people that we don't know, living in poorly equipped housing. This just adds to the frustration and the lack of control over our lives and our ability to have a fulfilled life. So depression, anxiety, these are worse in people who are not able to become independent.
We can't build a future because we don't have the possibility to become independent. Our materiality is precarious, and we're seeing that the measures that are being taken are not improving the situation for young people. Well, young people stop believing in the system. And we talk about the system. We're talking about the political classes and institutions, because that is what is leading to disaffection in young people.
What do we need? We need urgent measures. We must freeze rental prices with the increasing cost of living. We have to take immediate measures, because the European plan for housing is good. Okay?
But there is a social crisis, which has significant consequences. We must deal with that so that young people can once again dream about the future, and actually have a future to dream of.
Ruth Paserman
you. FEANTSA is the European Federation of Organizations Working with Homeless People. There are more than 1 million people in the European Union sleeping rough or in temporary accommodation every night. Five percent of Europeans have experienced homelessness in their lives. And in most member states, the numbers are rising.
Finance therefore strongly welcomes that both the commission and the parliament have placed homelessness high on the agenda of the affordable housing plan. Concrete steps such as tomorrow's council recommendation on housing exclusion, a work stream on social housing and homelessness under the European under the pan European investment plan platform, and the continued work of the European platform on combating homelessness are all positive signals, and Fiance works looks forward to playing our role in their implementation, although many questions about exactly how remain open. But I think the real question is not whether homelessness is mentioned in all the documents relating to the plan. The real question is whether these initiatives will deliver tangible improvements for people who are homeless or at risk of becoming homeless. And at the moment, I think that remains unclear.
We heard about the need for a paradigm shift on housing this morning, and I'm not sure that all of the initiatives proposed under the affordable housing plan really constitute a paradigm shift. I think we are still focusing too much on overall supply, not getting into enough detail about what type of supply is affordable for whom, and this seems unlikely to deliver for those with the lowest incomes or the highest support needs. I think we need to be really honest about who struggles most with housing. Yes. The housing crisis affects everyone, but it doesn't affect everyone equally.
And the consequences of housing stress for poor households are much worse than for any other households. So just to put this in context, 26% of people in the lowest income quintile are overburdened by housing costs compared to just 8 in the second and 3 in the third. Too often, this stark inequality is glossed over in EU housing debates. And I think we've heard actually a bit of that today. The affordable housing plan rightly includes a pillar on those most affected, but it groups, for example, homeless people and youth together.
These two categories, while obviously they can overlap and youth face many challenges, are not equivalent. Homelessness involves living conditions that violate human dignity. Young people are not a homogeneous group, and their housing situations vary widely. Intragenerational inequality is at least as important as intergenerational inequality when it comes to housing outcomes. Sometimes I have the impression that the line between identifying groups in housing need and mapping out market segments is very, very blurred.
And I think when it comes to purpose-built student accommodation, it's an excellent example. Obviously, students need affordable accommodation, but in practice, this sector has become a very profitable asset class, where prices are determined by what the market will bear rather than what struggling students can afford. And we've seen in countries like the UK bubbles in this sector, inflated rates, and oversupply, which cities then have to deal with. Public policy would be better directed towards social and nonprofit housing models, including for students. I think we've heard a bit about the multi annual financial framework, so I am running over time.
But I think it is really important that both homelessness, affordable and social housing are listed in the objectives of the NRPPs. But as we've heard, the money is not ring-fenced. The strong competition between priorities and the proposed performance framework is not fit for purpose for measuring the social outcomes of investment in housing, so we need to do better on that front. Fiance supports the parliament's call for a dedicated and increased ESF plus budget, and we strongly support the proposal in EMPL's current draft report on the ESF as part of the NRRPPs to ring fence at least 5% for the fight against homelessness. Without clear priorities and protected funding, good intentions will not translate into dignity, security, and homes for the homeless who need them.
Irene Tinagli
Thank you very much. Now I give the floor to Jens Koehler, general manager of Studentdorf Berlin.
Jens Koehler
Thank you very much, and thanks for the invitation and the possibility to speak here. I'm not only here for my student housing coop in Berlin. I'm also here for the European Student Coop Housing Alliance. We founded it two years ago. And, let me say one thing first.
Student housing, affordable student housing, is one really big point for the equal opportunities in education. This is one really important point. So one answer to the housing crisis of students is funding student housing costs. It's a relatively new movement. We have small ones.
We have big ones like mine in Berlin. We have 300 rooms, and we had unique conditions. We had buildings there. And against the wishes of the political authorities, we simply had to preserve them. And on the other hand, we had a new build.
We had a mezzanine lender. We had a public land seller who was interested in the outcome rather than the profit, and very favorable loan terms from in Germany. So, all these student housing coops have one major advantage. This is the high level of identification and commitment among founders and users. Look at wonderful examples at Edinburgh and Heidelberg Collegium Academicum.
But one thing we don't have, that is money. And the self-commitment model is not suitable for everyone because the students' job is their studies, and this is a temporary period of their lives. So we just can be a part of the solution, but not the solution. Then if you want to scale this up, you will lose more and more identification and commitment. We can see this in Geneva at La Sigu.
For scaling up, you need a professionally run co-op like Woco in Zurich or my co-op in Berlin, which are controlled, for example, by student unions or universities or other public stakeholders. So what we need is co-op laws like in Switzerland or the UK, clear exemption from competition rules for housing providers focused on the public good, grants or equity capital, we can't afford new projects out of the rent of the existing houses. This is not the duty of the students who live there. We need affordable land, leasehold below the market, access to abandoned office buildings, favorable financing, long term mortgages. We need support from universities and municipalities.
Good would be long-term restriction on use, rent caps in case of funding, and especially for resident involvement. We also need to reach the money. So a model enabling initiatives to channel their financial interests locally and pool them via providers focused on the common good. A good example could be AgriTech, a group in Budapest with MOBA in South-Eastern Europe to make a test on this. We need a model enabling collaboration between commercial local banks and the European development banks like we have in Germany between banks and the Credit Landschaftsverwideroffbau.
And we need to develop two or three different models because we have different rules in different countries. But I can give you some good examples. First, the Stedienenwerk in Germany. It was developed from student support organizations in the 60s, and they were transformed into semi-public institutions, which look after student needs. We have the WOCO in Zurich.
It's a co-op run by the student unions in Zurich. We have in the UK, student co-op homes, which was found by private persons and different housing co-ops in the UK who are looking for housing co-ops, to give financial support. So they have Edinburgh Student Housing Co op, one in Belfast, and they try to support running groups in Dublin, in Cork and so on. So give these groups help and maybe also support our small network. We have our next gathering in September.
Thank you very much.
Irene Tinagli
Thank you. Thank you very much. Now we open the floor for the questions, and we start with the MEPs, and I give the floor to Nora Yunco Garcia.
Nora Junco García
Thank you, chair. I'd like to thank all of the panelists for being here. I'll be speaking in Spanish. We've been talking about funds all morning. We've been talking about European plans, investment funds, but let's come back down to the ground level.
We have representatives from youth organizations from two countries where the situation is serious. Italy and Spain. In Spain, a significant number of young people live at home, and the lowest number of young people live independently. And since 2008, I mean, we've had a serious increase in prices of rental causes. And when it comes to housing in Spain, it's not that there's a lack of housing or a lack of ground to build on, but it's other issues that we've talked about many times.
The sources of funding, well, I mean, if local councils continue to speculate, there's gonna be a snowball effect. Ultimately, what I'm trying to say is that we need a political commitment here. The situation is the same in Spain, Italy, Portugal, The Netherlands. There's a generation in Europe that is trapped between rental payments and living with their families. And we've got the issue of the demographic pyramid.
We're worried about young people not having children, but, I mean, were these children going to sleep? Are they going to sleep in a shared flat with 4 strangers? So a number of questions that I'm thinking of here, then. Given that the competences when it comes to this issue are national and regional, how can we create a European strategy for affordable housing that actually works for young people? And what is the key to improving affordability for young people?
If you had to choose one single reform to improve access over the next five years, would you do it through tax measures or by building more?
Irene Tinagli
Now take two questions from the floor. And, the first one is Catherine Robeau, from the.
Speaker 59
Yes. Hello. Catherine Rubeau, Abita Humanism. This is an organization which lobbies for housing and for the accompaniment of vulnerable populations. We work in France, but also in Belgium and Luxembourg.
We completely agree with what Fianza said. We have two questions, comments. How can Europe support an accompanied housing plan to favor the mainstreaming of vulnerable populations, notably among young people? And how can Europe work as a, work and be with solidarity to promote alternative or innovative models of housing such as intergenerational housing models to help solve both the housing crisis and also the vulnerable situation of certain populations such as young people, but also the old, the elders, elderly. Thank you.
Irene Tinagli
Thank you very much, also for the timing. And now I give the floor to Rui Vinha, treasurer of the Erasmus Student Network.
Rui Vinha
Hello. Thank you for the commission and department for this initiative and the opportunity to speak today. So I speak on behalf of the Arab Network. We represent the voice of international students and the Erasmus, also in particular, our 44 countries of our network. In the past years, housing has, of course, consistently emerged as the central debate in the international students going abroad, based on our research and also our student surveys, is in fact the primary challenge that students face when considering going abroad on mobility.
It has also become the leading cause of students dropping out of their mobility even before they go, because they cannot afford living in the city of the destination. For those who are able to go, many of them end up spending almost half of their total budget on housing. Erasmus students are particularly vulnerable considering that they are going to different countries in conditions that differ from their national realities, with language but also cultural barriers, making them targets for scams and higher rent prices. This is particularly concerning given the importance, of course, of the RAIS plus program in the European project, promoting European values among young people, but also for fostering intercultural understanding and integration, but, of course, supporting students in their personal and academic development that equip them with essential skills for the labor market. Of course, we commend the affordable housing plan with initiatives such as a pilot scheme under Erasmus Plus for mobile students from disadvantaged backgrounds.
My question for the panel will be, how can we assure that, of course, when addressing the wider housing crisis, we can still target the needs of Erasmus students and international students in the policies that we can actually also help for the wider benefit of young people and students. Thank you.
Irene Tinagli
Thank you very much. Now, in the meantime, I welcome the commissioner who has joined us for this third panel. We know that this is also a topic very close to the heart of the commission. So thank you so much for joining us. And, so who wants to start the reply among our panelists?
Thank.
Sarah Velodre Perez
you. I'm going to be quite concise. When it comes to building homes, it's not so much about building homes. We've seen it in Spain the last 14 years. There's been a 663% increase in houses.
But people can't afford houses. That means that other people are accumulating houses. So it's not an issue of building houses. It's about accumulating ownership. A small number of people own houses, so we need regulation for that.
So just another quick point. I just want to illustrate how frustrating it is. We've seen through this panel that we've talked about fine funding, financing, architecture, etcetera. But when it comes to talking about young people and initiatives, we don't have that much time. So I think that's something that gives us food for thought, because young people don't always participate in these decision-making spaces.
Well,
Tito Rodolfo Martha Galassi
When it comes to what has just been said, I think the issue of that housing crisis has a major impact on the emancipation of young people. I think this is particularly a problem in Italy. But when it comes to these solutions that the EU could put forward to help resolve this problem, we would really say it isn't just about building new student accommodation. It's other measures as well. For example, in Italy, we have a lot of buildings which require renovation, and this is somewhere where local authorities, I think, can get involved.
Often, the local authorities don't provide enough funding for this kind of work, that older buildings can be used for different purposes, for student accommodation or accommodation for laborers. Now I think the EU can also, of course, provide financial incentives as well to support this kind of intervention. We would suggest that these financial measures also come along, come together with monitoring measures in, from the EU. We had a next generation EU in Italy, and one of the major points here was to increase the number of student housing by 60,000. There are various factors that have to be taken into account here when we're looking at why that goal wasn't achieved.
But particularly, I think the money in Italy went to private landlords. And, for that reason, students weren't actually able to access this accommodation at reasonable cost. Italy, therefore, wasn't able to achieve this 60,000 goal that it set itself. And so I think not only do we need funds provided at EU level, but we also need work to be done at national and local level as well. Thank you.
Irene Tinagli
Thank you. Thank you very much. Now I would like to give the floor to the commissioner, because I know that you have a very busy day, but we really appreciate and thank you for being with us and, in particular, also on these aspects. So, Mister Jorgensen, I give you the floor.
Dan Jørgensen
Thank you so much, honorable chair, honorable members, dear friends. It is a pleasure for me to join you here today. I know that many of you have traveled from across Europe to be here. I thank you for making this effort and for sharing your experiences and expertise. I would also like to thank my colleagues in the European Parliament, especially those in the Housing Committee, not only for organizing this event alongside the commission, but also for your hard work and good cooperation over the past year.
Indeed, it was just over 1 year ago that we met in this room for our first conference on affordable housing. Since then, we have made great progress. Europe's first ever affordable housing plan, the report, and the resolution on housing adopted by the parliament. These are the first steps in a new era of European action and cooperation. While the past twelve months have been good and we've seen progress, they have also brought fresh challenges.
Most recently, our citizens have been impacted by a new rise in energy prices caused by fossil fuel volatility. This has added another layer to the cost of living, and it has added greater urgency to our work on housing. In our panels today, you have discussed some of the next steps that we must take. Our first panel had a focus on financing, and this is a good place to start. Whether building or renovating a house, or building Europe's housing system, the first thing we need is money.
That is why we are working to mobilize every cent we can from public and private sources. This includes EU funding. Under current MFF, we are already directing at least €43,000,000,000 towards house-related investments. New funding possibilities will be unlocked in the next MFF. In particular, the future national and regional partnership plans include social and affordable housing as one of their specific objectives.
To support national funding, the commission has adapted state aid rules, making it easier for member states to invest in affordable housing. However, we know that public funding will not be sufficient in itself. To this end, our pan-European investment platform will mobilize a broad coalition of financial actors to scale up investments in housing supply. This coalition will include the European Investment Bank, national and regional promotional banks as well as international financial institutions like the European Bank for Reconstruction and Development. Finally, while we must enable private investments, we must also fight speculation.
This is a priority for me. Housing is not just another commodity. It is a fundamental right. Therefore, later this year, we will present an analysis of housing price dynamics and speculative patterns. We will promote greater transparency and help member states put in place measures that limit harmful speculative behaviors.
Through a combination of these actions, we can ensure that public and private funding is directed towards affordable housing as effectively and efficiently as possible. However, financing alone will not deliver housing supply. We also need structural reforms, and this was the focus of our second panel. Here, I would like to highlight three areas of work. One, we have started preparing a housing simplification package, which we will present next year.
Our first step is to map EU legislation and assess how it impacts the supply and affordability of housing. The work has already begun. Two, we are implementing the European strategy for housing construction. To match current demand, we need to increase the supply of homes by around 750000 per year. To deliver these homes, we must address a shortage of labour and skills in construction.
We also need rapid digitalization, the adaptation of modern methods, and increased circularity in the sector. Our strategy for housing construction sets out actions across all of these areas, and we will start delivering this year. Finally, we will present an Affordable Housing Act in the coming months. Our objective is to help member states and cities to address the growing pressure from short-term rentals on local housing markets. We will provide common criteria to identify whether an area is under housing stress.
We will give more legal clarity about the measures the public authorities can take in those stressed areas. And we will include a package of recommended measures to increase the supply of affordable housing in these areas. Our final panel today focused on young people. And here, let me take you from Brussels to Barcelona. A few weeks ago, I spoke to young people in this city about the challenges they face.
They told me how average rent is often higher than the average salary of a young person. I heard about young families struggling to secure their first home, about young workers forced to choose between paying rent or taking off a job opportunity, about students who faced long commutes simply to pursue their education. These people are the future of Europe. But how can they build their future if they cannot afford to live in the present? I assure you that the commission will work with member states to examine all possible solutions and mobilize all possible investments in student housing and affordable rentals for young people.
We will explore funding options through Invest EU, the cohesion policy, the pan-European investment platform, and the next MFF. Together with the European Investment Bank, we are assessing the feasibility of a guarantee scheme to reduce or eliminate the need for security deposit for student trainees or apprentices. And under Erasmus Plus, we are developing a housing pilot scheme to help the mobility of students from disadvantaged backgrounds. Dear friends, let me conclude, not with my own words, but with the words of Madam Chair, if I may. When we met here over one year ago, you said this is where our journey starts.
Since then, we have come a long way. We have made good progress, but we are far from finest. So let's keep our focus. At the beginning of this journey, there were many doubts about what Europe could do to tackle this crisis. But with every step we take, we leave these doubts behind us.
We're showing the true value of European cooperation. Together, we can overcome our difficulties. Together, we can make a difference. Together, we can reach our destiny, which is a Europe where every person has a place to call home. On that note, I thank you for your time, and I look forward to continuing our good work together.
Thank you.
Irene Tinagli
Thank you very much, commissioner. And now we continue. I don't know if there were other comments on the previous question, or if we can move to the next round of questions. Ruth, you had some comments. Yes.
Ruth Paserman
Maybe just one comment on the question from Habitat Humanism. I think that in the area of exchange and promotion of good practice, there's still a lot that can be done at European level, and maybe the plan is underexploiting that method of European cooperation so far. And I think Habitae Humanism is a really powerful example of a social economy nonprofit model that delivers housing for very, very low income and vulnerable households. And I think that it's the kind of organization that will be able to bring a lot of useful expertise to the Pan-European investment platform.
Irene Tinagli
Okay. Okay. So let's now move to the next round of questions. We start, as usual, with an MEP, and I have the floor to Laila Chaibe.
Leila Chaibi
Well, thank you very much to the four speakers. I'll give you some time to put on your headphones. Thank you to the four speakers on this panel. I think it's a very interesting panel. I'm sorry that Mr.
Commissioner Jorgensen didn't stay longer to listen to more feedback. I think this is a very important meeting because you're showing us that this matter of accommodation isn't a market issue, a speculation issue. It's a social issue. Those are the stakes. And notably, young people are on the front line in terms of being victims of this housing crisis, whether that be students or vulnerable young people, for all the reasons you've brought up.
My questions are mainly for Tito Rodolfo, Maras and students in general. When it comes to living together, so this is something that's very common among young people, roommates and flatmates and so on. More and more, cities are using flatmates as a lever to make money, and this seems like a new way, a new, well, to get money and to speculate on. So co shares, and so on. Is this something that you've noticed?
And is this a stake we need to tackle from the start? Because it feels like we're really focusing on short term, let's. But in cities where that is regulated, well, investors have found ways to make money with housing in other ways. And I'm thinking about co-living, co-shares, and so on. My next question is about rent and the context of rent. Young people are experiencing a housing crisis times 1,000, but it's the same housing crisis.
Often, young people have small living spaces, and they are often victims of very high rent. Do you think we speak too little about rent. I know this isn't a competence of the EU, but we can make recommendations to the member states. So do you think that creating frameworks for rent would be a useful way to help young people not have to deal with rent, which is higher than the minimum wage, for example, in the case of Barcelona? Thank you.
Irene Tinagli
Very much. Now I give the floor to Amanda Ferro, senior policy adviser, European Roma Grass Organizations Network.
Amanda Ferro
Thank you very much, madam chair. Amana Ferro from ERGO Network, representing Roma communities across Europe, but in this case, talking about young Roma because this is the topic of our panel. So, I want to speak about young Roma access to housing, but, obviously, what I'm going to say also applies to other ethnic minority youth as well as racialized young people, young migrants, young refugees, including those who are undocumented. Young Roma already come from segregated neighborhoods, informal settlements, overcrowded dwellings with subpar living conditions, no access to utilities, infrastructure, or community services. They face discrimination at all levels, intersectional discrimination that combines racism and anti-gypsism, as well as sexism, ableism, ageism, discrimination based on family size and number of children.
They are met with refusal to rent and with discrimination from landlords, neighbors, local authorities, and housing providers. We have spoken a lot about young people who are urban, who are educated, who are students, who do international mobility, but we have not spoken about young people who live in extreme poverty, who live in rural areas, who are farmers, who have been working ever since the age of 16, and who are parents. Roma youth are, and in general, ethnic minority and racialized youth provide a significant contribution to Europe's economy, to Europe's demography, and to Europe's democracy. So my question to the panel, now that I have its attention, is how can we leverage the affordable housing plan to tackle discrimination in the housing market, including for young people? And how can we make it deliver for racialized youth, including young Roma in Europe?
Thank you very much.
Matthew Baldwin
Thank you very much indeed. I'm briefly taking over the chair. Mister Tenjali will return in just a few minutes. Can we turn now to Sven Engel, please, who's the director of international relations in DSW? Sven, are you there?
Sven Engel
Yes. Thank you very much for the opportunity to make a small remark and then maybe ask a question towards the end. My name is Sven Engel. I'm the director of international relations for the German National Association of Student Affairs and Services, Deutsches Studentenwerk. And together with similar public student services agencies like the Studentenwerk, and many even know the Italian entities for the right to university study, we provide about close to 500,000 units in easily accessible and affordable housing to students in higher education in Europe.
Speaker 66
And I really want to stress the point that Mr. Koehler has already mentioned. And we've been talking a lot about speculative risks this morning. What we really need for students, I believe, is housing that is affordable and accessible in the long term. Of course, we need rapid construction. We need renovation.
We need immediate measures. But we also need to make sure that these will not just pass away after ten years or maybe twelve years when people move out and investors take over and rent out these units on the infamous platforms where you can rent a room maybe in Barcelona for a week that local residents cannot even afford in a month. And so we have made some really good experiences with large government financial programs like the Young Living program in Germany, but also in France. Mixed results with the 60,000 units in Italy. Yes.
But my key point here is that we do have the social infrastructure for affordable, accessible housing. It's already there. We have public agencies who operate large student residence halls, a large student housing park, and they can guarantee that this will also continue after 10 years, after several generations. Every Erasmus student will have memories of the etcetera. And I think this is something really crucial that we involve these local or regional actors who have the contextualized knowledge on student housing within their cities, regions, or towns where higher education is concentrated, and include them in our further steps.
So my question to the panel is, how can we address that these existing public and non-profit oriented structures for construction and renovation of student housing can be strengthened in the further initiatives and particularly in the legislative and financial initiatives that Europe is, as the commissioner has said, been embarked on, and how can we make sure that these players play a crucial role in the affordable housing plan? Thank you.
Matthew Baldwin
Thank you very much. Does anybody want to jump in from the floor? We have a couple of minutes if anyone has a burning question. Yes, please.
Polina Batasevich
My name is Polina Batasevich. I'm from ITT Fort Worth, and I wanted to ask about solutions for young people who are not students, for young people who cannot afford housing. For example, what about people who have to stay temporarily with friends and family members and because of lack of permanent address cannot access income?
like to.
Turn first to Jens Olmeg.
Jens Koehler
Thank you very much. To the question of mister Engel, I would say that the things I asked for, like access to land, fundings for affordable housing are the things, also these providers like in Germany are needed. And in Berlin, we have a special situation that can't invest in new housing. So, the local municipalities have to support all these providers so that we can still build new housing as well. And we have one point in Germany, which I think is not so bad.
We have something like a mark where we want to go. We have a mark that we want to have 10% of the place at the university in affordable housing. And this maybe is a good idea to say, this is our mark we want to reach. And we do everything for that, and we have to find providers who are going with us. And, the next or the last thing I also said is we need this restriction on use long term.
Ruth Paserman
Thank you. So, on the first question, from MEPHIB about rent regulation, I mean, I think, absolutely, regulation, not only of rents, but good tenancy regulation in general is an absolutely central part of this puzzle, and it's not only slightly in the frame of the affordable housing plan as it stands. And I do think that's a huge missed opportunity. There are things that could be done even in the framework of EU consumer law, and we're not paying enough attention. And I think it's a fallacy to imagine that we can completely solve the housing crisis from the supply side, particularly if we decide to constantly widen the type of supply that we're talking about with this affordable housing concept.
And so we need to look at all the levers, and proper regulation of the market is definitely one of those levers. On Amanda's question about the living conditions of young Roma people in Europe, I think there is a disconnect between this EU housing agenda and anti-discrimination agenda. I hope that when the poverty strategy is published tomorrow, there will be sufficient synergies between those two things. But I think, the very legitimate issue that you raise is symptomatic of this whole exercise not being sufficiently grounded in unmet housing need. And if we identified the needs properly rather than always be making them more and more abstract, then we would identify the solutions and put the precious resources where they are most needed.
I think on the question about permanent affordability of student housing, absolutely, it's true for all of the housing that we're talking about, and it's terrible that we have put the state aid rules with twenty years, for example. That is, as Sorka said this morning, not a long time in housing. And on the last question, like, what about students, what about young people who are not students? I think it's such an important question. Like, when we look at homelessness, for example, young people leaving care, they are hugely represented.
They're a very vulnerable population. We know where they are. They're coming out of state care, so they should be easy to intervene with and support and provide them with housing, and it's not happening. So I think, like, it's a huge risk to say anything negative about Erasmus in this kind of setting, but I do think, like, are we being credible about housing as a social right if we're doing more for students than we are, in concrete terms, for homeless people? And I think that the highly mobile student population, like the digital nomads, we know, like, it has an important impact on housing markets, and just fueling that impact is probably not going to get us out of the mess we're in.
Matthew Baldwin
Thank you. I'm I depart from my role as neutral chairman just to note that there is a need to address the issue of tenants issues in the plan. And as we've discussed, I think, with many stakeholders, the plan is very much a starting point and not an ending point for these issues. And ditto by ditto, by the way, in relation to the, I was gonna say, discrimination agenda, I should say, the anti-discrimination agenda. This is very much on the commission's radar, and we need your support and encouragement and ideas exactly as you said, Ruth, to make that concrete.
I think we're coming to the end of this segment, but I think Tito, you wanted to come back in.
Tito Rodolfo Martha Galassi
Yes. Thank you. I just wanted to make a comment here responding to what the MEP said. When it comes to house sharing, here I'm talking from an Italian point of view, it's very common in Italy for there not to be kind of student housing as such, but rather for people to rent a room or two or three rooms in a house. And I think perhaps it's not sharing here that's the problem so much as it is the speculation, which creates worse and worse conditions for students year on year.
And it effectively means that you've got more pressure on private landowners to kind of put more and more students or fit more and more students in one house. It's this kind of speculation that's making the situation worse throughout Europe, I think. It's not only about the worsening conditions for students, but also this kind of drive for profit from the homeowners. Often, we've got single rooms which have a student agreement for, say, 5 years. They then make that a room for two students the next time, and it's just this kind of worsening of the situation.
Rents are also getting higher, and our aim when we're looking at policy making is to really highlight our needs and to talk about the doubts that we have in relation to policies. I think we need to ensure that we can have a policy which brings around a real reduction in rents. We want to create a housing market which works better. In Italy, we've got a lot of houses which are being rented on the gray market. And here, the contracts, the rental contracts, obviously, are not in favor of the students at all.
This puts the students at great risk. And this, however, is the only way to access affordable accommodation for many students. Thank you very much.
Matthew Baldwin
Indeed. And then just briefly, I think a quick word, sorry, from Sarah, and then I think we complete, if you could be very clear. 2
Sarah Velodre Perez
Things I'd like to say. The first, it's not co-living. It is precarity. Co living is just not a thing because 87 percent of young people can't afford to pay for a house. And these 87% are not paying for co-living.
It's paying because they can't afford to live on their own. And when it comes to renting out rooms, in 2024, it was €1,080 for a room. But, really, when we look at the numbers, the numbers just don't add up. It's the perfect storm to make things impossible. And it's not because, I mean, houses are more expensive.
It's just because owners are charging more.
Sarah Velodre Perez
It's incredible that today, 2026, we have to continue talking about students who are studying a degree and they're not able to live in a flat. I mean, we need to look at policies which can ensure that young people have support on all fronts. We need laws on housing which meet the requirements and the needs of young people throughout Europe. Thank.
Irene Tinagli
Thank you very much. Now the last round of questions, and I start by giving the floor to Gabi Bischoff.
Gabriele Bischoff
Thank you very much, Chair, and thank you for this overview. My question would be, we talked a lot about financing and how important it is to, on one hand, finance nonprofit organizations, especially that provide affordable housing for young people in educational training, in the different forms. But at the same time, also that we are talking about the European Investment Platform, the European Investment Bank, and the conditions for handing out the money. What are if you have one wish free, what would it be in the con in the way we are now setting up this investment platform, how to guarantee this? And if I might have a small one, we are discussing at the moment in the parliament the next MFF, the multi-annual financial framework.
What are your key expectations if you think providing housing for young people, what needs to be in this next MFF to make sure that we are better off in the future than we are currently in the present. Thank you.
Irene Tinagli
Thank you very much. Now I give the floor to Peter Kamerling, board member, Commoning Spaces Network.
Peter Kamerling
Thank you very much. In our network, there are several students' houses as well, and most of the housing projects include space for vulnerable or highly vulnerable people. So, I'm coming back to my question on panel two. I think with the abandoned spaces we have all over Europe, we can solve the European housing crisis. They have to be renovated, and this is quicker, more affordable, and more sustainable than demolition and reconstruction.
But I see that the owners have their property, and they don't sell it. There are many reasons for abandoned spaces, I know, and it's sometimes very difficult to reactivate it. But I see that without legal leverage, we cannot reactivate as many as we need, only a small fraction of it. So my appeal is that in the upcoming European Housing Act, there should be implemented a legal leverage to reactivate abandoned spaces. Without that, it will not be possible.
Thank you very much.
Irene Tinagli
Okay. Before we close the floor for questions, I just take one question if there is someone. Yes. Freaking.
Speaker 71
Thank you very much. I've got the impression that young people think that we need more regulation because it's not enough. I think that it's better because of the Spanish experience that it's not needed to make more regulations, but better regulations. Because if not, the results can be the same as that we've got in our country. We are so over regulated that 40% of all homes for families that were rent for long term have come out of the market.
And now the situation is that we've got more than 1,000,000 homes, of properties empty because the owners fear that they don't have enough legal security to put them in the market. If this or this 40% would come back to the market, then, of course, the prices would come down. The result we've got now is that these 40% of properties will probably be in, if the rules do not change in short term, in the hands of investment funds. And this is a real problem that we've got. It's not to make more regulations, but better regulations.
Speaker 72
If there are more offers, of course, the prices will come down. And it's right. In the whole Europe, we've got a lot of empty properties that we have to think to put in the market as soon as possible. Thank you so much.
Irene Tinagli
Okay. Thank you very much. Now I give back the floor to our panelist. Who wants to start for the final round of answers?
Ruth Paserman
Ruth? Okay. Okay. Thank you for all the questions. On the question of conditionalities attached to EU funding and finance, I think it's a really critical question.
I think it's actually technically quite difficult. I think my wish list would include permanent affordability, nonprofit housing, or at least limited profit, but preferably nonprofit housing, and the sort of social housing. We as I think that we should maybe have a minimum percentage of social housing in these projects, or because I think that the category of affordable housing is too large, and there's a danger that we will miss the kind of core problems that we're supposedly trying to deal with. On the MFF, I think that we need a real social fund like we have currently, in the next MFF, and I very strongly support the parliament's suggestion that 5% of that fund should be reserved for the fight against homelessness. I also think that it would be quite embarrassing for the commission to end up with an affordable housing plan and no actual money for investment in affordable and social housing.
So I think we'd like to try and avoid that. I, on the question of better regulation, yeah, of course, I'm not arguing for overregulation, but tenancy law is wildly different across the European Union, and that leads to very different housing outcomes, and we could maybe learn something from that. Yeah. I think those would be my main answers to the questions. Thank you.
Jens Koehler
Oh, I'm sorry. Last answer I will give in German. I'm sorry, but it goes faster. So, first.
On the financial question and what we need. Here, let me answer you with an example. In Berlin, we had three areas for students, with 400 places, with own capital. We also had funding from the state, but the building in Berlin was created in such a way that we weren't able to make our applications, or rather they were refused because we needed to have 20% own capital and we hadn't reached that figure. And so we instead looked at this differently.
We have invested a huge amount in recent years without there being own capital. We need help from the state without all of these conditions in place. We need that, otherwise we're not able to do our work. And on regulations, I would say that regulations always come from crises. Often here, we're talking about community-led housing or cooperative housing.
We've got funding from banks, there's over-speculation, and it's always us that suffer, and I think we need to be careful here. Our kind of cooperatives, so many of them have gone bankrupt in recent years. We have cooperatives since the 1890s, have been creating cheap housing in Berlin, and it's worked so well, but the situation is becoming more and more difficult.
Sarah Velodre Perez
I'll be very brief as well.
Based on what we've heard. Housing shouldn't be something that is bought and sold on the market. There is a basic social right here. It's not good for investment because supply and demand don't work the same when it is a basic need. We can't substitute housing for another product, for example, so we have to keep that in mind when we're developing public policy for housing both nationally and at European level.
Matthew Baldwin
Well, I shall be very brief because the commissioner already made some overall assessment comments from our side. I'd just like to make a personal comment to thank you all for joining the discussion from the floor. I think the discussion we had last year, we ran out of time to get that real exchange back and forth on the different issues. That exemplifies for me the spirit of the work on housing, which is in the parliament and in the commission around what we're trying to build with the European Housing Alliance, with the Pan European Investment Platform. It can only work because we are not planning to do this whole big top-down thing.
Listen up. This is how it's all gonna work. It can only work with the input we are receiving from you on a continuous basis. Listening to you speak, Jens Hoover, reminded me of the changing nature of the representation of issues, as well as finance, and I see talk in the back on housing Europe. We now have a European, collaborative housing alliance looking at these different issues facing co ops, facing nonprofits, facing the student housing sector.
My three last words, we bring it on, engage with us, continue to help us shape this housing agenda as we move forward. Thank you very much. Thank you, chair, for the brilliant organization of this, the expense.
Irene Tinagli
Which was shared. So thank you very much, actually, for the organization. I really want to thank all the staff, the members of the secretariat, the committee, the commission. It was a collective effort that really took a lot of energy, but I'm very glad that we did it. It is very important.
The work that we have done in this year and a half, I know that now it's the critical point, and there is a need to see the results. But what we've already achieved, it's quite remarkable because two years ago, one and a half year ago, nobody at the European level was even talking about these issues. We brought these issues here. We brought all the stakeholders, their voices, and their needs. And so I think that this is already an important step forward.
We now know each other. We know with our which are all the players, the stakeholders, those that could really play an important role. We will need your help. We will do our best to continue pushing. Today, we've talked a lot also about financing.
The issue of financing came back also in the panel that we are not dedicated to financing, because, of course, it is critical. And as you know, right now, there is ongoing debate and discussion on the next multi-year financial framework. I really ask you to keep pushing in all possible venues because this budgeting process is very complex. It touches upon many different committees, not just actually, it does not touch the housing committee. So we are the one pushing the other committees, but we need this alliance.
This alliance that we are building, we need you to help us push for more resources and dedicated financing on housing because right now, other colleagues in other committees are deciding on these as well as the member states in the council, which will decide on that. So it's not just upon us, it's also on the member states. So we've embarked on this effort trying to carve out a role for the European Union because we believe and we've seen in this year, and today's debate also reminded us, that what we see today, the symptoms that we see in all places, they might be local symptoms, but they trace back to more global European kind of problems. There are structural problems behind what we see, and that's why we need a European action. Because if we want to tackle what is happening in terms of financialization, speculation, these kinds of dynamic market distortions attracting the right type of investments, this requires some form of intervention at the European level, but we can't do it alone.
We need the member states. Housing policies, in the end, will remain in the hands of the member states, and the member states will have a voice in the council when it comes to calls for more financing for housing in the next MFF. Member states will be crucial in also implementing the affordable housing plan that has been set out at the European level. So if we all together keep working and pushing on this topic, we will keep the momentum, and we will help the delivery of what we're trying to build. So thank you very much.
I know how much each one of you in your own organization, in your own country, and here in Brussels as well are trying to work for this common objective that we share. So we will try to do our work as well. So thank you very much, and good luck to everyone.
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