Tax incentives, renovation and less red tape to tackle the EU’s housing crisis 

This article is brought to you in association with the European Parliament.

• Short-term rentals should not threaten affordability of cities 
• Incentive-based tax systems needed to support low- and middle-income households 
• Enhance EU industrial sovereignty in the construction and renovation sector 
• Planning permits must be processed within maximum 60 days 

On Tuesday, Parliament adopted its recommendations on the housing crisis in the EU, proposing solutions for decent, sustainable and affordable housing.

The final report of the Special Committee on the Housing Crisis, adopted by 367 votes in favour and 166 against, with 84 abstentions, emphasises that millions of Europeans face precarious living conditions due to the housing crisis, and calls for EU initiatives to help address rising prices and shortages by supporting construction and renovation.

Improving living standards

To ensure decent housing, MEPs want the Commission’s Affordable Housing Plan to earmark specific funds for renovation, to improve the energy performance of residential buildings and to combat energy poverty. All new dwellings should meet quality standards on insulation, energy efficiency, and air quality, MEPs say.

Acknowledging the recent proliferation of short-term rentals, MEPs call for the upcoming law to strike a balance between developing tourism and ensuring access to affordable housing. It should set common objectives at EU level while leaving EU-countries, regions and local authorities the flexibility to design and implement measures adapted to their specific territorial realities and housing markets, MEPs say.

MEPs also want to see an adequate share of public and social housing in EU cities to increase the affordability and supply of housing for vulnerable people.

Parliament strongly condemns squatting – the illegal occupation of houses – and demands stricter measures to protect owners. It also urges member states to strengthen the protection of tenants’ rights ensuring fair conditions and preventing disproportionate rent increases.

Investments and fiscal aid

MEPs advocate incentive-based tax measures to support low- and middle-income households, the removal of tax barriers (i.e. high registration fees) for first time buyers, and tax conditions that make long-term rentals more affordable.

The report calls for more EU investment in housing by coordinating existing funding better and reallocating unused Recovery and Resilience Plan resources to support the construction and renovation of social, public cooperative, and affordable housing.

MEPs also say any revision of state aid rules should facilitate public investment in social housing, while respecting the diversity of national markets.

Faster and easier procedures

MEPs ask the Commission for a simplification package to reduce red tape in the housing sector. They want to see simpler permitting procedures, for example digital permit-granting procedures, and a 60-day deadline for granting permits.

Strengthening the EU’s construction and renovation sector

The EU must enhance its industrial sovereignty in the construction and renovation sector, MEPs say, urging the Commission to scale up innovative and sustainable products, reinforce the single market for raw materials, and include minimum ‘Made in EU’ origin requirements for components in EU co-financed projects.

Finally, MEPs demand action to improve the working conditions of skilled workers through training and fair wages. They call for easier intra-EU labour mobility, mutual recognition of professional qualifications and, where necessary, the recruitment of skilled workers from third countries.

Quotes

Rapporteur of the housing report, Borja Giménez Larraz (EPP, ES), said: “A generation that cannot afford a home cannot build a future. Europe is short 10 million homes, rents are up by more than 30%, and young people and families are paying the price. For the first time ever, the European Parliament is setting out a roadmap: a housing simplification package, faster permits in 60 days, investment in skills, legal certainty and protection for property owners and tenants, the mobilisation of private and public investment, and stronger support for young people, families and people with disabilities. No more excuses. Member states must now deliver.”

Chair of the Housing committee, Irene Tinagli (S&D, IT), said: “Housing is a fundamental social priority, and in the past year our committee has demonstrated that the housing crisis in the EU is real, affecting people in all member states. Today, the European Parliament is taking action to address this urgent social and economic crisis by putting forward practical and innovative solutions. The housing crisis has far-reaching consequences for the quality of life of Europeans, impacting people’s health, social cohesion, and access to economic opportunities. EU action is essential to restore balance and fairness in the housing market, because everyone deserves a place to call home.”

Press conference

On Tuesday 10 March at 17.30, rapporteur Borja Giménez Larraz (EPP, ES) and Housing Committee chair Irene Tinagli (S&D, IT) will brief journalists on the outcome of the plenary vote.