EU housing plan to reform state aid rules and enhanced European Investment Bank funding

The plan acknowledges the scale of the housing challenge facing member states, with officials estimating an additional 650,000 homes a year are required across the EU to address supply shortfalls driven by rising construction costs and disrupted supply chains.

The EU's first-ever affordable housing plan will see reforms to state aid rules and enhanced involvement from the European Investment Bank.

The plan acknowledges the scale of the housing challenge facing member states, with officials estimating an additional 650,000 homes a year are required across the EU to address supply shortfalls driven by rising construction costs and disrupted supply chains.

The document says housing is a "fundamental right" and proposes four pillars: boosting supply, mobilising investment, enabling immediate support with reforms, and supporting those most affected.

The commission adds it will focus on short-term lets and "support national, regional and local authorities, to address the issues, notably linked to short-term rentals".

"It will also address concerns on speculative practices and help EU countries drive forward structural reforms."

Irish MEP Barry Cowen said while housing policy remained a national competence, the EU's approach "reflects both legal reality and political caution among member states".

The Midlands North-West MEP said his focus at European level had been on removing barriers that directly constrain Ireland’s ability to scale delivery, particularly the treatment of housing bodies under EU state aid and fiscal rules. 

In that context, the proposed relaxation of state aid rules for affordable housing represents a “tangible and practical gain.”

“This package needs to be judged honestly. Much of what is being proposed, no matter how well intentioned, consists of recommendations, and housing will rightly remain primarily a matter for member states.

“The real, practical win here for Ireland is the movement on state aid rules and the increased role of the European Investment Bank. Taking bodies like the Land Development Agency and approved housing bodies out of a rigid on-balance-sheet straitjacket will be an absolute game-changer in terms of scale, ambition and long-term investment planning.”

“With revised state aid rules, Government support can go further without crowding out future spending, while EIB finance can be used strategically to back delivery at scale. That combination eases pressure on the State’s balance sheet and frees up space for sustained investment over time.”

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EU commissioner for energy and housing Dan Jorgenson said in a series of tweets that "action is urgent" and that the EU "has a role to play".