A step closer to more affordable and sustainable housing in Europe 

In a context where, according to the European Commission, between 2013 and 2024 house prices increased by more than 60% across the EU – outpacing household income – while average rents rose by around 20%, more than two million new homes per year would be needed to meet current demand, and 42 million Europeans cannot afford to heat their homes properly, the long-awaited Affordable Housing Plan was finally released on 16 December. 

Presented alongside a Communication and a proposal for a regulation on the New European Bauhaus (NEB) and new State aid rules for affordable housing, this package is a concrete answer to an unprecedented mobilisation of cities across Europe calling for urgent action on the housing crisis. 

Even though housing remains primarily a national competence, the EU adds value by supporting, coordinating, and amplifying national and sub-national efforts. The Plan makes clear that a joint action at all governance levels is needed to ensure the right to housing. 

As Energy Cities, we welcome this first step towards a more coordinated European approach to affordable housing, as well as the strong focus on sustainability, energy poverty and better use of the existing building stock, which meets our demands. 

Affordability and sustainability go hand in hand 

The Affordable Housing Plan rightly recognises that addressing Europe’s housing crisis cannot rely on new construction alone. Making better use of the existing building stock, including through renovation, conversion, and use of vacant buildings, is essential to meet housing needs while limiting pressure on natural resources. This was one of our main calls in the last months.   

We also welcome the clear focus on energy poverty and access to affordable, renewable energy and heating. Developing new dwellings without high energy performance risks locking residents into high energy bills and poor living conditions. Ensuring access to renewables and affordable energy is therefore both a social and a climate priority (check the 6 inspiring stories from municipalities across Europe about innovative solutions to provide renewable, affordable energy for those who cannot afford it easily).  

The strong emphasis on the New European Bauhaus is especially important. By promoting housing that is sustainable, inclusive and people-centred, the NEB supports neighbourhood-based approaches that improve residents’ quality of life. Many cities, like our member Križevci which won a prize for transforming a former military dormitory into a housing cooperative, already demonstrate the advantage of such an approach.  

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A starting point, not the finish line 

The European Affordable Housing Plan is just the beginning. A lot has still to be done at the European and Member States level, which have many competencies on housing policies and tools to address speculation on the housing markets.  

Over 2026, the EU will work on different legislative acts and initiatives, including: 

• a Pan-European Investment Platform in cooperation with the European Investment Bank, national and regional promotional banks, and other international financial institutions, to stimulate additional public and private investments in affordable and sustainable housing. 

• A revision of State aid rules to allow Member States to invest more in affordable housing, including for students, and to facilitate investment in mixed neighbourhoods. 

• a European Housing Alliance, a multi-level governance mutual learning environment composed of stakeholders exchanging successful strategies and collaborative solutions for housing policy implementation. In this context and supported by data, the Commission and Member States will identify where EU policy and funding can have the biggest impact to improve the housing markets and design taxation policies that promote housing affordability. 

• As part of the Affordable Housing Act, the Commission will propose a new legislative initiative complementing the existing Regulation on Short-Term Rentals to enable and support local authorities in taking targeted and proportionate action particularly in areas of housing stress and supporting sustainable tourism. 

• an EU Housing Summit where experts, policymakers, and other stakeholders will have the opportunity to share insights, drive discussions, and establish actionable solutions to tackle housing challenges.  

•  An analysis of housing price dynamics to fight speculation on the housing market and enhance transparency. 

• Within the 2026 Anti-poverty Strategy, the Commission will propose the Council recommendation to prevent and address homelessness. Additionally, the upcoming Citizens Energy Package will support households fighting energy poverty and protecting disadvantaged people from disconnection from the energy supply. 

Enabling cities and towns to act 

While the Plan recognises the key role of local governments, cities and towns need the capacity and funding to act. Technical assistance, including through the Technical Support Instrument, is welcome, but it must be matched with sufficient staff and skills within local administrations to implement reforms and solutions and fasten permitting.  

Housing challenges are deeply local. Looking ahead, the next Multiannual Financial Framework, which contains some budget lines to support affordable housing, must reflect this reality, with a stronger territorial approach. We call for earmarking for territorial development tools, mandatory regional, territorial and urban chapters in the national and regional partnership plans, and a recognition of local governments’ role in delivering a competitive Europe, of which a more affordable housing market is a necessary condition. 

From ambition to action 

The Affordable Housing Plan and the renewed push for the New European Bauhaus are a solid starting point for European action on future-proof and affordable housing. The priority now is to turn ambition into concrete action that delivers homes for millions of people, while respecting planetary boundaries. Energy Cities stands ready to contribute to this collective effort to ensure the right to housing for all. 

Learn more about our recommendations here and get inspired by the initiatives implemented by some of our members to address the housing crisis in their cities here.