Housing crisis grips Europe, but EU power is limited

The problem of high rents and a lack of affordable housing facing Portugal is common to most European countries and promises to be a central issue in the European elections on June 9. But how far can the EU go in solving these problems?

Eurostat data shows house prices increased by 47% between 2010 and 2022. In Portugal the increase was 77%. There has also been an increase in the number of families in which housing costs account for 40% or more of their disposable income, i.e., exceeding the so-called effort norm.

Over the same period, house prices rose by 192% in Estonia, 172% in Hungary and 135% in Luxembourg, Eurostat highlights. Back in May, Balakrishnan Rajagopal, the UN special rapporteur on the right to adequate housing, stressed that “far-right parties thrive when they can exploit social divisions arising from underinvestment and inadequate government planning… and when they can blame foreigners ” . The warning comes as far-right parties are expected to increase their representation in the European Parliament, according to polls.

The UN rapporteur also warned that “the housing crisis no longer affects only low-income people, migrants, single-parent families, but also the middle class”: “This is a social problem of the 21st century.”

What can the European Union do to solve housing problems?

In Portugal, it is Marta Temido, who heads the PS list, who is most advocating that the fight against the housing crisis should be a pan-European fight, proposing the creation of a “European Affordable Housing Plan”. AD also proposed including the right to housing in the Charter of Fundamental Rights of the European Union. But the European Union has to deal with several restrictions.

“It is very difficult for the European Union to solve this problem, since housing is the responsibility of states,” says Francisco Pereira Coutinho, a specialist in European constitutional law. SATURDAY. Even AD’s proposal to include housing in the Charter of Fundamental Rights of the European Union would only be “symbolic” if it were not accompanied by a “devolution of power”.

According to the expert, it is unlikely that European measures will be taken that will greatly influence the solution to the housing crisis. A professor at the Universidade NOVA de Lisboa Faculty of Law explains that “Members of the European Parliament can discuss this topic and make recommendations to member states so that they achieve certain goals.” Moreover, neither the European Parliament nor the European Commission has “the competence to issue a document such as the Mais Habitação, which defines measures to combat the housing crisis.”

Despite this, Francisco Pereira Coutinho states that “housing is a very broad term,” meaning that the Union can “develop measures and projects related to housing, but they will always have limitations.”

The reality is that the European Commission already has an affordable housing initiative, which aims to “make buildings green, create jobs and improve lives.” In Portugal, two projects related to this initiative can be found in Setubal and Matosinhos, but they are more focused on the energy transition of neighborhoods rather than building more houses.

Regarding concerted action by member states on housing, there is another option that Francisco Pereira Coutinho considers even less likely: the issuance of joint public debt between different member states, as was the case during COVID, but this time aimed at housing. This is unlikely to happen because although it is an issue for several countries, it is not an issue for all member states, so “not everyone should give it the same importance.”