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Social housing crisis: A strong EU investment?

At a conference held in January on the challenges of post-2020 cohesion policy, Corina CRETU, European Commissioner for Regional Policy, said: “Social housing is essential through its contribution to our social fabric, an expression of solidarity, a barometer of growth and social inclusion in regions and cities. This is why Europe supports social housing in all Member States”.

Social housing is housing built with the support of public subsidies for low-income groups. This public support can be counted at both national and European level. Indeed, since the early 2000s, social issues have been at the very heart of the Europe 2020 strategy and investment in sustainable urban development, and there are many European investment programmes. But how is the EU responding in the face of the social housing crisis and imbalances within European territories? Are its investment instruments implemented relevant and effective? Is its political action appropriate?  

Social housing crisis and imbalances in the EU

Since the early 2000s, Member States have been facing a major housing crisis. Two main factors are responsible for this: First, the asymmetry of social housing stock between European states, especially the great disparity between East and West. Indeed, while it represents 30% of the total housing stock in the Netherlands, 17.6% in the United Kingdom or 16.8% in France, it only represents 3.7% in Italy, 2.5% in Bulgaria, 2.5% in Spain or 1.5% in Romania. Second cause: a lack of investment, particularly since the economic crisis of 2008, and a dysfunction in European real estate markets, which lead to a lack of social housing and an increase in housing prices in more and more European cities. To address these imbalances, the EU is strengthening even more its financial instruments, particularly since 2014. But is it enough?

2014-2020: An investment strategy that partially respond to disparities

Since 2015, the European Commission has been implementing the Juncker Plan which, by boosting 500 billion euros over the period, aims to relaunch investment in the EU in line with the European Strategic Investment Fund (EFSI). In the field of social housing, two main sources of European investment respond to this strategy: European Investment Bank (EIB) investments and grants obtained through the Structural Funds, mainly the European Regional Economic Development Fund (ERDF) and the European Social Fund (ESF). For example, between 2011 and 2015, the EIB invested more than 13 billion euro in financing social housing. These EIB loans are mainly concentrated in Western Europe, United Kingdom (14.7%), Spain (14.2%), Italy (13.9%) and France (12.8%). Like the criticism of the Juncker Plan, we can see a geographical imbalance in EIB investment between the West and East of the EU. An imbalance that is not necessarily compensated by the ERDF, responding to the priorities decided by each Member State and which are not always investments in social housing. However, the strategy drawn up by the Commission today, while not fully responding to the crisis, supports an increase in public and private investment in a large part of the Member States. So what about the 2021-2027 strategy, continuity or newness?

2021-2027: Which European strategy for tomorrow?

For the 2021-2027 period, the heir to the Juncker Plan has a name: the InvestEU program. While the main strategic axes are in line with the Juncker Plan, investment decisions on social housing are yet to be defined. This new programme is expected to continue to strengthen investment in social housing through cohesion policy, EFSI and EIB instruments, but in a more balanced way across all European territories. Above all, from 2021 onwards, in addition to extending financial investments, it is now essential for the EU to make social housing a key principle in its urban and spatial planning policy guidelines in order to respond even more effectively to the housing crisis.



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