EU Affordable Housing Act – change is needed to truly ensure affordability and availability 

On 9 September the European Commission presented the Affordable Housing Act, one of the main initiatives under the European Affordable Housing Plan and probably one of the most awaited. The Act consists of a Proposal for a Regulation of the European Commission and a Recommendation on housing affordability and supply in areas under housing stress.  

The objective of the first is to bring clarity and harmonisation on housing measures, including concerning short-term rentals, to protect housing affordability and availability. The second, aims to guide Member States’ actions to accelerate the supply of affordable, social and student housing while addressing the structural causes of the housing crisis.  

SOLIDAR welcomes these two documents but aligns with several other civil society organisatisations in expressing concerns on important elements of the two. 

On the Regulation 

The use of this legislative instrument – which entails direct adoption into the national legislation for Member States – is justified by the fact that the initiative touches upon an internal market matter. This can be seen as a positive element, as it responds to the need for clarity and consists of binding rules. However, unlike a Directive, the Regulation cannot be adapted to the specificities of the national context, which can lead to an inefficient – when not counterproductive – implementation.  

The legislative nature of the Regulation is also potentially problematic when looking into the specific provisions of the text. The Regulation defines a way to assess housing stress, which is the precondition for housing measures regulating the market to be introduced. This measurement is composed of several criteria which include that the price-to-income ratio is equal to or exceeds the threshold of eight, corresponding to eight years of disposable per-capita income to purchase a dwelling of average size. Moreover, when the price-to-income ratio is 8 or 9, the above-mentioned ratio must have increased over a period of 10 years and authorities have to demonstrate that in the absence of housing measures the housing stress is unlikely to ease in the following 3 years.  

This set of complex (and arbitrary) criteria requires public authorities to have access to data and projections that are often hard to gather and that in any case demand for burdensome research. Moreover, the criteria may lead to excluding municipalities that have stable, yet chronic housing unaffordability. Therefore, these elements raise serious doubts on the efficacy of the Act to ease the action of competent authorities on housing availability and affordability. 

Another significant potential obstacle is the possibility for natural and legal persons affected by the measure to initiate judicial review. In the context of a housing market dominated by speculators, it is easy to imagine that they will have the resources and interest to block any attempt to regulate and reduce their profits. This will translate into an additional legal burden for competent authorities and may lead to the impossibility of introducing the necessary measures.  

Finally, this new framework, if introduced as it stands, may lead to invalidate measures that have already been introduced in certain municipalities, as they fall outside of the requirements set by the proposed Regulation.  

On the Recommendation 

In the case of the Recommendation, we see an ambitious objective matched with a non-binding instrument. However, regardless of this form, the Recommendation does not match the declared Commission’s ambition even with its content. In fact, the document contains some positive proposals, but with concrete limitations.  

The main shortcoming is that it focuses on measures that promote housing solution “under market price”. In the current context, where on average house prices in the EU rose by 53% between 2015 and 2024 and rents went up by 27.8 % between 2010 and 2025 ¹, being under the market price is no guarantee of affordability. Reference to the widely used threshold of 25-30% of disposable income dedicated to housing expenses to define affordability would more adequately reflect the ambition of the initiative.  

In addition, the Recommendation is meant to provide guidance on how to tackle the structural crisis of the housing crisis, yet “speculation” is mentioned only once in the text and no clear action to contract it is foreseen. The Recommendation focuses on reducing red tape, framing housing shortages as the primary cause. However, this overlooks other structural issues, namely speculation. It is also worth noticing that a focus on the protection of workers in the building sectors is alarmingly missing; simplification must not come at the expense of social rights. In addition, a call for binding social and environmental conditionalities for housing funding, both public and private, are regrettably missing. 

On the positive side, reference to the key role of social and solidarity economy housing providers is present. Yet, this is not coupled with a call for dedicated resources and support for these actors, such as preferential access to public procurement.