The European Union’s Housing Crisis: Can it be solved?

Source: https://www.greyscape.com/can-politics-ever-be-separated-from-architecture-poland/, Artur Bednarczyk.

Housing is one of the key policy issues regardless of state or society; on a basic level, we need shelter to survive, but it also facilitates community integration, impacts the job opportunities accessible for someone, and can determine someone’s success in life, such as through the quality of schools nearby. We can discuss housing in terms of inequality, affordability and accessibility. [1] Inequality in housing is becoming more potent as European Union member states have diminished their social housing stock, such as the UK’s ‘Right to Buy’ programme, meaning this sector is even more disproportionately inhabited by low-income households, causing stigmatisation. [2] Affordability is in crisis- property prices in Europe have risen much faster than wages, a problem exacerbated by the fact social housing is increasingly limited. In Berlin, rents have doubled in 10 years, leading the government to plan to introduce a 5-year rent free in 2020. [3] The most extreme result of the European housing crisis is one of accessibility, namely the increase of homelessness, leaving citizens vulnerable. European states are taking different national approaches; Berlin has proposed rent freezes, [4] whilst Finland focuses on providing homeless citizens with permanent housing. It may initially seem that there is little scope for a Europe-wide approach to the issue, as the European Union has no direct competency to legislate on housing, based on the principle of subsidiarity. [5] However, the Maastricht Treaty means the EU is responsible for promoting social cohesion, [6] and housing is closely tied to this issue. As aforementioned, social housing is becoming increasingly stigmatised as stock narrows so lower-income households are concentrated in it, harming social cohesion as citizens are divided in terms of where they live. Furthermore, the European Union is partially responsible for promoting urban regeneration in member states, and housing is a central aspect of that. [7] Thus, it is important to note the roles of both member states and the EU itself when discussing the housing crisis, and affordability, accessibility and inequality must all be looked at to find a comprehensive solution.

Multiple factors have brought this conflict. Many often seek one ‘root cause’, and a popular option currently is to scapegoat international immigrants, but the reality is much more complex. There’s a crisis of affordability, which in Berlin has brought a call for rent caps on private properties. The economic impacts of the recession contributed to the disparity between rises in wages and house prices, but the affordability crisis can also be attributed to demographic changes. Many EU states have stagnating birth rates but this doesn’t ease housing pressures in urban areas, due to the extent of rural-urban migration, within and between states. [8] This increases demand in certain areas, causing house prices to skyrocket. Many blame international immigration- in December 2012 Theresa May claimed 1/3 of the new British housing demand was from immigrants. [9] However, LSE research shows new migrants have fewer households and use the private sector more, so they should not be too harshly blamed for housing pressures. [10] The decline of social housing has exacerbated the accessibility crisis. The most acute accessibility problem, homelessness, [11] is growing; Finland is the only EU member state to have reduced homelessness. As the stock of social housing declines, lower-income households must be prioritised so become more geographically concentrated in areas of social housing, [12] bringing stigmatisation and housing inequality. The residents of social housing are also becoming older and poorer, [13] heightening their social exclusion.

To solve the housing crisis, we must address supply and demand. Finland is an exemplary model in dealing with homelessness; the ‘Housing First’ programme ends the cycle of homelessness as people are given permanent housing as soon as they become homeless. [14] This is a national project, demonstrating it could feasibly be rolled out across EU member states, and state funding gives localities incentives to implement the programme. There’s long-term economic benefit as people can use mainstream, not emergency, services once they have stable housing. [15] But, this only really addresses the extreme consequences of housing crises, not the root cause of unaffordability. Rent caps, such as those in Berlin, respond to the present disparity between wages and house prices, but may discourage landlords from investing in new housing or refurbishing poor quality housing, so is not sustainable. To increase housing accessibility, EU states need to develop social housing provisions. Following Finland’s example, by providing permanent housing to people once they become homeless, their reliance on costly emergency services and temporary accommodation can be stopped, and they can contribute to society. Government subsidies can re-invigorate the social housing sector. This will encourage the building of more social housing, and improve the current stock. Housing inequality will subsequently be reduced as if there is more social housing, it won’t have to be reserved for only the most disadvantaged households, so there will be a greater mix of social housing tenants, reducing the stigmatisation and social exclusion they face.

It is also imperative that EU member states manage the demand for housing. Rural Europe is suffering from depopulation, [16] due to declining birth rates and EU citizens migrating from rural to urban areas. This means in urban hotspots with rapidly growing populations, housing demands outstrips supply, pushing up house prices and causing an affordability crisis. Governments can resolve this by investing in rural locations, and encouraging ‘reverse’ migration from urban to rural areas. This reverse migration can utilise the EU’s free movement of people by facilitating migration between member states- for example, an increasing number of citizens in Northern states are moving to rural areas in Southern ones, such as to run vineyards. [17]

In conclusion, the EU is suffering a housing crisis of accessibility, affordability and inequality, but there is reason to believe we can solve this. The combination of rent rises, decline of social housing, and demographic changes have brought housing inequality and increased homelessness. To solve this, EU member states must make changes to housing supply and demand. Nationally, central governments can encourage social housing providers to provide more, better quality accommodation. Local governments have a role in implementing projects to help homelessness, the most acute accessibility issue, and should follow the example of Finland in providing permanent housing to those most in need. Whilst housing is not directly under the EU’s remit, it has a key role in co-ordinating responses to the housing crisis by managing geographical differences in housing demand, and supporting regeneration of underpopulated or deprived areas. Local, national, and regional governments must work together to ensure all EU citizens have access to affordable housing.

[1] European Parliament, .1996. Housing Policy in the EU Member States. Social Affairs Series. Available at: http://www.europarl.europa.eu/workingpapers/soci/w14/text1_en.htm

[2] Dieleman, F., and Priemus, H. 2002. ‘Social Housing Policy in the European Union: Past, Present and Perspectives’. Urban Studies 39 (2) : pp.1-3 : DOI: 10.1080/0042098012010291 1.

[3] Schultheis, Emily. BBC. 2019. ‘Berlin’s radical plan to stop rocketing rents’. http://www.bbc.com/capital/story/20190226-berlins-radical-plan-to-stop-rocketing-rents

[4] ibid

[5] European Parliament. 1996. ‘Summary of ‘Overview of Housing Policy’’.

http://www.europarl.europa.eu/workingpapers/soci/w14/summary_en.htm

[6] European Parliament, .1996. Housing Policy in the EU Member States. Social Affairs Series. Available at: http://www.europarl.europa.eu/workingpapers/soci/w14/text1_en.htm

[7] European Parliament. 1996. ‘Summary of ‘Overview of Housing Policy’’.

http://www.europarl.europa.eu/workingpapers/soci/w14/summary_en.htm

[8] Tidsall, S. The Guardian. 2015. ‘Silent blight in a countryside of empty homes and shut shops’. https://www.theguardian.com/world/2015/aug/23/europe-rural-urban-migration-threat-countryside

[9] Foster, D. The Guardian. 2016. ‘Is immigration causing the UK housing crisis?’.

https://www.theguardian.com/housing-network/2016/jan/25/is-immigration-causing-the-uk-housing-crisis

[10] ibid

[11] https://www.europeanhousingforum.eu

[12] Dieleman, F., and Priemus, H. 2002. ‘Social Housing Policy in the European Union: Past, Present and Perspectives’. Urban Studies 39 (2) : pp.1-3 : DOI: 10.1080/0042098012010291 1.

[13] European Parliament. 1996. ‘Summary of ‘Overview of Housing Policy’’.

http://www.europarl.europa.eu/workingpapers/soci/w14/summary_en.htm

[14] https://www.europeanhousingforum.eu

[15] ibid

[16] Tidsall, S. The Guardian. 2015. ‘Silent blight in a countryside of empty homes and shut shops’. https://www.theguardian.com/world/2015/aug/23/europe-rural-urban-migration-threat-countryside

[17] Tidsall, S. The Guardian. 2015. ‘Silent blight in a countryside of empty homes and shut shops’. https://www.theguardian.com/world/2015/aug/23/europe-rural-urban-migration-threat-countryside