Opinion of the European Committee of the Regions – Smart, sustainable and affordable housing as a tool for local authorities to face multiple challenges (Own-initiative opinion)
Date: 2024-04-17
Institutions: Commission for Territorial Cohesion Policy and EU Budget, European Committee of the Regions
Subjects: building, cost of living, housing, housing policy, property market, right to housing, social policy








C_202403667EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/3667


26.6.2024







Opinion of the European Committee of the Regions – Smart, sustainable and affordable housing as a tool for local authorities to face multiple challenges

(Own-initiative opinion)
(C/2024/3667)














Rapporteur



:


Andres JAADLA (EE/renew E.), Member of Rakvere City Council









POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),






1.


observes that the housing crisis in Europe is deepening with rapid urbanisation and migration trends exacerbated by the successive crises, particularly by the COVID pandemic, rising energy costs and inflation due to the war in Ukraine, which are pushing local and regional authorities to their limits to guarantee a sufficient affordable housing stock, an inclusive social environment and decent, healthy and sustainable living conditions;










2.


notes with concern that the housing cost overburden and a steady upwards trend of rents and house prices in large cities and metropolitan areas increasingly affect not only low-income households but also middle-income households, whereby 10,4 % of the EU urban population lives in a household where total housing costs represent more than 40 % of disposable income. Gentrification and touristification (short-term letting for tourists) pushing up prices and energy poverty affect around 34 million Europeans, increasing the risk of exposure to evictions and exacerbating homelessness, particularly for low-income households, young people, people with disabilities, seniors, large families with children, migrants and specific cultural or ethnic groups and LGBTQIA+;










3.


reiterates the right of everyone to have affordable, accessible and healthy housing, in accordance with Principle 19 of the European Pillar of Social Rights, in line with UN SDG 11: Sustainable cities and communities, and with the Geneva UN Charter on Sustainable Housing;










4.


emphasises that local and regional authorities are primarily responsible for addressing the housing demand and for managing large stocks of public buildings and public spaces, with a primary role in planning and funding;










5.


warns that excessive housing costs have a detrimental impact not only on local and regional economies, but also on mobility within the Single Market. Qualified individuals and graduates often find it prohibitively expensive to relocate to areas with professional opportunities in their field; similarly many key professions such as teachers, police officers, and nurses are being priced out of the housing market in cities, while critical workers in low wage jobs face hours of daily commutes. In many cases, local and regional authorities, public agencies and private companies providing these services face extreme difficulties filling vacancies for some of these key posts.










6.


considers local and regional authorities’ right to regulate public interest objectives, particularly in relation to housing and town planning, within the relevant legal framework, to be key for delivering cohesion and integral to subsidiarity;










7.


reiterates the challenge posed by expensive housing on education accessibility, particularly in larger towns where higher education is concentrated, and rents are at their highest. The lack of affordable housing limits access to education, underscoring the need for policies that ensure educational equality and empower young people.










8.


stresses the social vulnerability resulting from expensive housing, limiting individuals’ choices to leave unhealthy or abusive environments. This highlights the need for a comprehensive housing policy that addresses not only economic aspects but also individual well-being, framing the issue as a concern for public health and personal safety.










9.


acknowledges the resolution of the European Parliament of 21 January 2021 that calls for action to solve the housing crisis and for recognition of adequate housing as a fundamental human right in the European Union and welcomes the debate on Decent Housing for All at the European Parliament (October 2023) and the call for a strong Social Investment Plan, adequate funding and a holistic policy approach for addressing housing availability, affordability and adequacy in Europe;










10.


warmly welcomes the 2023 Gijón Declaration and 2022 Nice Declaration, signed by EU ministers for housing and urban development, with acknowledgement of the need to apply the principles of subsidiarity and multilevel governance in developing housing policies in the European Union; is particularly pleased that the most recent Liege Declaration of March 5 2024 looks at concrete steps to speed up renovation, diversify funding sources, improve governance, synergies and encourage innovation in the field;










11.


calls for a renewed focus on the ongoing initiatives related to cooperative, public and social housing, housing based on public-private partnerships, non-profit housing, as well as affordable, non-speculative private housing initiatives and for a financial boost to their implementation, which could equip LRAs with the tools to face the ongoing crises; calls for the ERDF to be used to build new social housing and to upgrade and regenerate residential buildings in all European regions. Increased investment in housing would in effect improve housing accessibility and affordability, boost the local economic base, help reverse demographic trends, meet climate objectives and improve local climate resilience, while also addressing the integration efforts of both refugees and migrants;










12.


calls for better coordination between EU policies and the policies of the Member States, their regions and local authorities and for the launching of a Housing Agenda for the European Union, similar to the Urban Agenda for the EU, that works towards a joint and multi-level, multi-stakeholder institutional response to housing challenges with more coordinated policies, more coordinated funding and more coordinated housing models in Europe;










13.


emphasises that, while housing policies remain a competence exercised at the relevant level in the EU Member States, several EU regulations – in terms of social protection, social economy, urban development, energy efficiency, market regulation and State aid – have a strong impact on local housing. In order to help establish a good EU housing strategy, the European Committee of the Regions supports the European Parliament’s proposal to amend Article 153(1)(j) of the Treaty on the Functioning of the European Union by introducing a European Union competence to provide support in the field of social housing (1);










14.


with regard to market regulation, the European Committee of the Regions calls on the European Commission to address the issue of speculation and money laundering in the property market at European level by means of a European property transparency register that includes the names of the owners of the various properties, thus ensuring that each tenant is aware of the real identity of their landlord. This register could help prevent the predatory tendencies of a wide range of large property companies and individuals owning numerous properties, and help prevent the phenomenon of empty, unused buildings;










15.


in this context, welcomes the 2022 Commission Staff Working Document on the evaluation of the EU State aid rules for services of general economic interest (SGEI) applicable to health and social services, which concluded that the 2012 SGEI Package as regards health and social services is broadly fit for purpose, but there is still room for improvement, in particular to clarify certain concepts such as social housing and ‘affordable housing’ so that the same definition is used throughout the Member States;










16.


also takes note of the Brussels declaration of European mayors of 24 January 2024 and the Eurocities European election manifesto of December 2023 which, along with other similar documents, call for making housing one of the key priorities of the next European Parliament and European Commission and commits to working jointly with all relevant stakeholders to ensure this becomes a reality;










17.


considers that mechanisms to regulate the market for empty housing should be considered as another possible solution to the shortage of affordable housing;










18.


reiterates the call to the European Commission to review Decision 2012/21/EU (2) on State aid in the form of public service compensation, and to consider enabling wider investments in housing under State aid rules and widening the definition of social housing in the Decision beyond ‘disadvantaged citizens or socially less advantaged groups’ in order to reflect Member States’ discretion in planning, delivering, financing and organising the construction of social housing, guarantee the democratic right to choose and provide access to adequate and affordable accommodation because of the inability of the current housing markets in some locations to meet accommodation needs, not just for people who have no access to housing at all, but also the occupants of housing that is hazardous to health, inadequate or overcrowded, as well as people who are paying most of their income on rent or their monthly mortgage payments;










19.


calls for the European Semester to take better account of urban issues: economic and social policy coordination in the EU must cover affordable housing, inequality and long-term investments;










20.


highlights the gender dimension in housing policies and stresses that gender pay gaps often have a greater impact on women. Women, especially as single mothers and at the age of retirement, are at higher risk given the still prevailing gender pay and pension gaps. Therefore calls on local and regional authorities to take the necessary measures to create equal opportunities for all; stresses, in particular, the especially precarious situation of single-parent families and the discrimination they suffer when seeking housing, and calls for the situation of single parents, who are mostly women whose professional careers have been cut short, also to be catered for as a priority in the criteria for allocating social housing;










21.


welcomes the fact that Council Directive (EU) 2022/542 (3) allows reduced VAT rates to continue to apply for supply and construction of housing, as part of a social policy, and renovation and alteration of housing and private dwellings;










22.


highlights that many responsibilities also retained by national governments such as taxation, public expenditure and social policy profoundly affect housing outcomes and call for a strong multi-level governance and partnership among public actors with multiple, coordinated, policy tools for delivering affordable housing; points out that well-designed recurrent taxes on residential property can help address inequality, foster a more sustainable growth of property prices and provide much needed resources for local and regional authorities to invest in critical infrastructure and the green transition;










23.


points out that housing-focused solutions for those in need should be understood as a right and that securing accommodation should be part of a comprehensive approach that ensures the delivery of structural as well as personalised services and also focus on prevention and help those who are most vulnerable and at risk of becoming homeless and contributes to the common good. In this context, calls on the Member States of the European Union to join the Housing First programme in order to combat homelessness and to prevent homelessness-related discrimination in Europe;










24.


recognises that the EU has successful models for social housing and calls for more publicity of EU good practices for providing social and tenure security for households with low and middle incomes, and for striving for social integration of the most vulnerable homeless people, with a particular focus on EU youth who are experiencing homelessness, or who are at risk of becoming homeless;










25.


points out that there are different traditions in terms of renting, home ownership and housing policy across Europe’s cities and regions and the policy toolkit should take them into account; underlines, however, that only a healthy mix of public, cooperative, social and private housing, and under a variety of financing arrangements, including public-private, has proven instrumental in guaranteeing sufficient supply of homes responding to the needs of all citizens;










26.


emphasises that short-term accommodation rental services need to respect public policy objectives in regards to available and affordable housing and the efforts of protecting urban centres from excessive ‘touristification’. Balancing the needs of locals, entrepreneurs and tourists is key in order to maintain the liveability of neighbourhoods, while not undermining the high acceptance and economic benefits of tourism in Europe’s regions and cities;










27.


welcomes, in this respect, the political agreement reached in November 2023 between the European Parliament and the Council on improving transparency and exchange of information in the short-term rental sector and sees it as an important step towards allowing LRAs to appropriately control this market. The European Committee of the Regions calls for this new European framework to be fully and swiftly implemented to regulate the impact of digital platforms on property markets, particularly as regards platforms’ obligations to comply with local and regional regulations and to inform local and regional authorities about housing units used for short-term rentals;










28.


observes that while many rural areas face demographic challenges and depopulation, house prices often remain stable or even increase as city dwellers purchase second homes; draws particular attention to the challenges arising on the holiday housing market, where the opportunities for locals to afford a home are crowded out by more cash-rich buyers; in order to help solve the problem, programmes of public loans and loan guarantees for young people should be promoted, so that they can purchase, restore and self-develop a home in a small municipality where they would habitually or permanently live;










29.


recognises that the European Union building stock encompasses more than 220 million building units (85 % of the EU’s building stock) built before 2001 and the share of residential buildings (floor area) represents more than 66 % of the building stock in most EU Member States;










30.


points out that, despite a higher than 2 % annual weighted energy renovation rate for residential buildings in some Member States, it remains 1,0 % overall, and that residential deep renovation is lagging behind with rates lower than for non-residential deep renovation; calls for more incentives and financial support, in addition to favourable taxation that does not tax the amounts received from any administration as a subsidy or grant to carry out accessibility, conservation, energy efficiency and health measures, such as asbestos removal. The aim is residential deep renovation in the EU, while maintaining social measures to prevent eviction of tenants and owners, with a focus on vulnerable persons and disadvantaged groups. Another factor influencing energy renovation using European grants is the complex application process to obtain these grants, especially for the most disadvantaged section of the population;










31.


highlights that several factors impact residential renovation, such as high ownership rates, low legal powers of local authorities, inadequate planning in terms of green and sustainable rehabilitation of buildings, and insufficient funding for placed-based investments that address local needs and enhance local economic resilience, prosperity and sustainable development;










32.


recognises sustainable architecture as the model of the future that can improve energy efficiency of buildings, minimise waste and chemically toxic materials, create healthy and productive environments for the occupants, while interweaving the architecture within a much broader cultural framework of the human interrelationship with nature; thus notes that the New European Bauhaus, EU Urban Innovation Actions and EU Affordable Housing Initiative may be useful instruments to address the multiple challenges that local authorities face;










33.


observes with interest recent phenomena such as co-living communities of young professionals in larger cities, proliferation of studios and single-occupancy apartments with limited amenities for cooking and socialising, which densify urban centres and make living in them accessible to younger generations, more environmentally sustainable and suitable to their lifestyles and values, but warns that in some instances this may be a partial market response which comes with its own issues such as inadequate supporting infrastructure for a higher number of and density residents. These initiatives should be supported as a means of encouraging long-term residential use in city centres, and rejuvenating their populations, while ensuring that existing infrastructure is not overstretched; when there is a risk of this, LRAs should be able to regulate co-living so that the local infrastructure and services can keep up with the densifying urban centres;










34.


acknowledges the significant contribution of EU financing and in particular the European Regional Development Fund (ERDF), Cohesion Fund and Recovery and Resilience Facility (RRF) for investing in energy efficiency in housing, acquisition and rehabilitation of collective housing units, regeneration of urban and social housing areas or development of social and protected housing. The European Committee of the Regions also calls on the Member States to include national plans for affordable housing in their National Reform Programmes. Around EUR 22,3 billion in total are programmed in the 2021-2027 period for energy efficiency in housing and housing investments in the scope of social inclusion under the ERDF, RRF and the Cohesion Fund. In addition, the European Social Fund+ supports housing assistance programmes, capacity building and provision of social services to people at risk of homelessness. However, the annual investment gap in social and affordable housing reaches EUR 57 billion (4);










35.


supports promotion and exchange of best practices of decentralised socially innovative housing solutions and stresses the value of intergenerational housing, especially where older people and students, apprentices and trainees are mixed together, thus benefiting from exchanges between generations and preferential housing costs; similarly encourages wider implementation of temporary housing projects that fight homelessness and promote integration and circular economy by creating lively diverse communities, pre-empting illegal occupation of empty buildings, which is a growing problem where people are left with no other choice;










36.


recognises the need for cooperation of local authorities, national governments and academia through Horizon Europe and other initiatives to benchmark and further develop renovation grant schemes and other incentives to enable effective and highly replicable renovation, for instance with affordable prefabricated elements and financing schemes that do not additionally burden occupants suffering from energy poverty;










37.


calls for improved access to credit and mortgages for young individuals with weaker financial backgrounds also, for example, through public loan guarantee schemes. Stakeholders at local, regional and national level need to align with values of youth empowerment and economic growth, emphasising the importance of empowering the younger generation to invest in their future through home ownership.










38.


strongly believes that energy renovation should go hand in hand with structural upgrades of the buildings and help bring them to the latest seismic and fire standards, standards ensuring universal access for all, as well as and other safety standards. Renovated housing should adopt the highest standards of climate resilience so that new homes are not lost to extreme climate events; calls for faster climate-proofing of the existing housing stock against extreme weather events, including extreme heatwaves, where relevant, that particularly affect older people and vulnerable groups in densely populated urban neighbourhoods;










39.


acknowledges the effectiveness of rent controls as temporary measures against rapid rent hikes but warns against their long-term reliance. While there is still an immediate need to curb rent increases, it is of utmost importance to commit to finding sustainable, market-driven solutions, that ensure affordable housing, as there is a risk of creating parallel markets for controlled-rent housing and the commercial one;










40.


calls on the Commission to encourage local and regional authorities to showcase integrated renovation packages of heating, ventilation and cooling upgrades for buildings and to support the training of the renovation workforce within the programmes funded by the European Social Fund+ and under REPowerEU, as the transition to a systematic circular approach to building renovation requires significant efforts in terms of reskilling and support for local competences, both in the public and in the private sector. These integrated packages obviously make sense if they are accompanied by passive improvements to dwellings;










41.


stresses that the primary solution to high price of housing is the construction of new units, which increases the supply and consequently reduces the cost of production, the price of the land and the price of selling and renting housing. In this regard, emphasises the vital role of local and regional authorities in ensuring that adequate regulations, appropriate infrastructure and suitable land are available to enable and incentivise the construction of new housing. Steps should therefore be taken to simplify urban planning applications;










42.


recognises the need to target the worst performing buildings and buildings with a large potential for energy savings; stresses the need for skilled labour and entrepreneurs and recognises the effect on building values and property markets, which should not lead to any increased costs for tenants; therefore, calls for the legal possibility for Member States to request an extension of the stated deadlines if justified by exceptional conditions;










43.


recognises, however, that higher volume development and increased construction of new units is one, but not the only and all-redeeming solution to reduce housing costs and emphasises the need for parallel and wider implementation of other innovative solutions at local and regional authority level that reduce barriers to access to good and stable housing. These solutions can include repurposing vacant properties and converting them into housing or higher involvement of existing empty housing capacities through assistance centres and municipal rental agencies, which act as reliable partners for private homeowners and provide support to people in housing need – for homeowners, they provide a range of guarantees and services, such as regular payment of guaranteed income or housing repairs beyond the law mandated standards, while for people in housing need they provide housing support, including the provision of other social services where appropriate;










44.


emphasises the importance of capitalising on local good practice results and sharing knowledge regarding urban planning practices, housing models, building innovation actions and smart technologies among local and regional authorities in the EU; therefore acknowledges the positive start of the New European Bauhaus (NEB), with 22 inspiring NEB projects ideas linked to housing and the implementation of the Urban Agenda for the EU (UAEU) with its UAEU Housing Partnership and the establishment of one of the first centres in the framework of the Geneva UN Charter Centres of Excellence;










45.


recognises that a systematic and integrated renovation approach brings more value to European centres of historical heritage and, in this sense, calls on the European Commission and EU Member States to provide guidance on improving the energy efficiency of historic buildings, including by leveraging the work of the NEB. The renovation of these buildings should be supported by dedicated funding schemes and a sufficiently flexible timeframe;










46.


further acknowledges the start of the affordable housing initiative in the Commission’s Renovation Wave strategy for Europe, piloting 100 lighthouse renovation and construction districts with an aim to double renovation rates by 2030. Many municipalities are already implementing housing projects with smart solutions for energy efficiency of municipal buildings;










47.


reiterates that the Renovation Wave should contribute to the implementation availability of the right to affordable, accessible and healthy housing, and considers that action on energy efficiency is a structural way of tackling energy poverty;










48.


propose to use the revenues of the EU emissions trading system (ETS) and the Social Climate Fund to finance grants to help vulnerable EU citizens renovate their homes and to finance climate housing allowances for those in need – jointly managing this scheme with regions – and establish a comprehensive policy to overcome energy poverty and to ensure that the Renovation Wave and the Affordable Housing Initiative make housing more affordable across the EU;










49.


further notes the need to include the life-cycle thinking approach in the definition of zero emission and nearly-zero emission building, with a view to promoting a climate-neutral building stock by 2050;










50.


reiterates, as set out in the opinion Proposal for a Directive on energy performance of buildings, that stepping up renovation of buildings is an opportunity to tackle energy poverty and make buildings housing vulnerable households energy positive; regrets, however, the increased renovation costs that the directive causes to many, especially low-income, households, who are already challenged by the increased cost of living, energy and inflation; to this end, urges the establishment of a comprehensive policy on energy poverty to avoid worsening the issues of energy poverty across the EU with a special focus on gender equality; for this reason, calls on the Commission to put in place a comprehensive strategy to eradicate energy poverty and reiterates that the CoR stands ready to cooperate with the newly established Energy Poverty and Vulnerable Consumers Coordination Group with a view to designing a strategy that is fit for implementation at local and regional level;










51.


in this context, calls on the European Commission i) to reflect on the possibility of using revenue from the European Emissions Trading Scheme (ETS) and the Social Climate Fund (SCF) to finance subsidies for the most vulnerable Europeans, so that programmes managed by the Structural Funds authorities can be used to help vulnerable people to renovate their homes and ii) to establish a comprehensive policy to combat energy poverty and thus ensure that the Renovation Wave improves access to affordable housing in Europe and that the application process for accessing this support is kept as simple as possible;










52.


welcomes the Commission’s recommendations, published on 20 October 2023, on measures and policies that can be adopted by Member States to tackle energy poverty, some related to housing. Investment in energy efficiency and renewable energy are among the structural measures included to have a long-lasting impact, addressing the root causes of energy poverty such as the low energy performance of homes and household appliances, high energy expenditure in proportion to household budgets and lower income levels (exacerbated by inflation); at the same time points out that energy poverty is part of the broader issue of poverty, and requires action within economic, labour market and social policies;










53.


supports the decentralised renewable systems and local energy communities linked to residential developments; calls for further analysis and removal of relevant legislative obstacles that prevent wider energy sharing in order to exploit their full potential; in particular, in order to make the measures in the heating and cooling plans under the Energy Efficiency Directive more effective, the Committee calls for European regulation of heating and cooling networks to address the problems of developing and managing them, such as users’ rights, in both new and established urban areas;










54.


supports a faster uptake of digital and smart energy solutions through encouraging accessibility and usability of systems, provision of sufficient technical advice by businesses to households, digital literacy and skills of end users at local level and supporting transfer of technologies to local builders and installers;










55.


emphasises the importance of National Energy and Climate Plans (NECPs), as well as the Social Climate Plans and National Building Renovation Plans (NBRP), presenting new opportunities for Member States and local and regional authorities to boost smart and affordable housing across the EU;










56.


calls for targeted financial support for cities and regions to enable them to address the challenges of receiving refugees, considering that adequate housing is the first step towards integration. In this context, the European Committee of the Regions expresses its support for the European Citizens’ Initiative entitled ‘Ensuring a dignified reception of migrants in Europe’ (5);










57.


welcomes the partnership and twinning initiatives with Ukrainian cities for a fast and sustainable reconstruction; reiterates that the EU’s cities and regions are best placed to offer the expertise and the ready-made solutions to help Ukrainians return to safe and warm homes as soon as possible. The reconstruction of Ukraine’s housing stock should benefit from all the EU’s housing-related initiatives mentioned;










58.


believes that, likewise, cities and regions in the neighbourhood, and particularly in the enlargement countries, whether affected by natural disasters such as earthquakes or by migration and demographic trends, should have access to policy tools and expertise to improve their housing stock, supported by appropriate funding instruments.










59.


Requests that the European Commission, in partnership with the CoR, organises an annual EU summit on social and affordable housing, bringing together all the stakeholders involved in coordinating the Member States’ actions on social and affordable housing, based on a multi-level approach and respect for the principle of subsidiarity.






Brussels, 17 April 2024.


The President


of the European Committee of the Regions

Vasco ALVES CORDEIRO
               





(1)  
            https://www.europarl.europa.eu/doceo/document/TA-9-2023-0427_EN.html.

(2)  2012/21/EU: Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (notified under document C(2011) 9380) (OJ L 7, 11.1.2012, p. 3).

(3)  Commission Delegated Regulation (EU) 2022/54 of 21 October 2021 amending Delegated Regulation (EU) 2020/692 as regards additional requirements for the entry into the Union of certain ungulates which originate in the Union, are moved to a third country or territory to participate in events, exhibitions, displays and shows and are then moved back to the Union (OJ L 10, 17.1.2022, p. 1).

(4)  
            Opening remarks by Commissioner Schmit during plenary debate on Decent Housing For All at the European Parliament.

(5)  
            https://citizens-initiative.europa.eu/news/new-initiative-registered-ensuring-dignified-reception-migrants-europe_en.


ELI: http://data.europa.eu/eli/C/2024/3667/oj
ISSN 1977-091X (electronic edition)