A new Affordable Housing Act, published by the European Commission, would support EU Member States and cities in addressing housing affordability and availability in areas facing the greatest pressures.
Lack of affordable housing is one of the most urgent concerns for Europeans, with over half city dwellers considering housing to be an immediate and urgent problem where they live (Eurobarometer).
In some cities and popular tourist destinations where pressure on housing is strongest, the increasing use of housing for purposes other than primary residence can aggravate local availability and affordability. The Affordable Housing Act gives public authorities the legal certainty when they choose to act, based on local specificities, within EU law.
Some Member States have already taken measures to ease such pressures, but have been faced with legal challenges about the compatibility with EU law, says the Commission. The Affordable Housing Act brings clarity and predictability, and addresses the request of Member States and municipalities for greater legal certainty on how they can act in the context of the EU’s single market.
“Europeans should have the possibility to live, work and stay in the places they call home”, said housing Commissioner Dan Jørgensen. “They should have the possibility to find an affordable and decent home in the place where they wish to build their life. While building new and renovating remain essential, we urgently need to make better use of the homes we already have. The Affordable Housing Act gives our Member States and cities the tools to make more affordable homes available, especially in the areas most impacted by the crisis.”
The Affordable Housing Act provides the first-ever common European framework for assessing housing-related measures affecting the single market. It leaves the decision on whether to act, and which measures to adopt, to the competent authorities. Housing policy choices remain national, regional and local.
The Act is designed to provide legal clarity to authorities, when they choose to take action, in areas under housing stress, while safeguarding the Single Market and fully respecting the principle of subsidiarity.
The new rules are designed to help competent authorities identify “areas under housing stress” using a common methodology. Where authorities choose to restrict the use of housing, for instance for short-term rentals or vacant dwellings, they must show that this contributes to local housing pressures and ensure that any measures are targeted, necessary and proportionate.
As regards short-term rentals, any measure must be targeted at activities that reduce the housing stock available for long-term use, especially where their scale, frequency or commercial character aggravate housing pressure. Before introducing restrictions, authorities must also demonstrate that short-term rental activity has had a significant adverse effect on housing affordability or availability for at least three years, and that less restrictive measures would not be equally effective. They must apply and enforce the EU Short-Term Rental Regulation, including its registration requirements and the removal or disabling of listings that do not comply with them, and, where available, use the data collected under that Regulation to support their assessment.
Authorities are also taking measures affecting the acquisition or use of residential property, for example to address second homes or prolonged vacancy. The Affordable Housing Act also provides a clearer framework for such action. The Act protects legal certainty and legitimate expectations: conditions linked to acquisition cannot apply retroactively, appropriate transitional arrangements must be provided, and measures addressing long-term vacancy should take into account justified periods of non-occupation.
For residents in areas under pressure, the aim is that measures taken locally are better targeted, better supported by evidence and reviewed over time, and that they are accompanied by measures to increase housing supply. Investors and property owners operating across several local markets will benefit from more clarity on the EU legal framework.
The proposal is accompanied by a Recommendation on housing affordability and supply in areas under housing stress. It supports authorities in their efforts to increase housing supply in areas that need it most, including through faster planning and permitting of new construction renovation and repurposing buildings and facilitating investment. Authorities are also encouraged to concentrate such efforts to increase housing supply via Housing Acceleration Plans. Together, the legislative proposal and the Recommendation help authorities preserve housing affordability and availability while accelerating the additional housing supply the EU needs. The Act is one component of the European Affordable Housing Plan, alongside the new State aid rules for affordable housing and the European Strategy for Housing Construction.
Questions & Answers on the Affordable Housing Act
Commission Recommendation on housing affordability and supply in areas under housing stressMaking housing affordable – Housing – European CommissionEuropean Affordable Housing Plan
