Home, Sweet Home
By Deliana Paggi
I am writing from Italy, where, a few weeks ago, all the newspapers were reporting on the urban planning investigation in the city of Milan. Now it is August, and September is approaching with its new beginnings. I think many readers of Young Europe, like me, find themselves facing the challenge of looking for a room or apartment to move into in a new city for study or work.
Maybe it is just this stage of life, or maybe it is the relentless stream of headlines about Milan. Either way, it got me thinking: when did renting or buying a house become so difficult?
The European Union is facing a housing crisis and the problem has grown so urgent that, for the first time, Brussels has appointed a Commissioner for Housing Policy, Dan Jorgensen, who also holds the Energy portfolio.
Speaking of numbers…
In just over a decade, from 2010 to 2022, rents in Europe rose by 18%. In a little less than ten years, from 2015 to 2023, house prices rocketed by 48%.
Then, it is no surprise that terms such as housing crisis and housing affordability have become part of the debate. They are broad labels, but their impact varies sharply across countries and demographic groups. At the core of all these forms of the housing issue lies an economic, and perhaps overly abstract, concept: disproportion. Whether one looks at the growing divide between property owners and the potential buyers or tenants, or at the widening gap between household costs and workers’ wages, what emerges is a profound asymmetry.
As with all complex issues, the causes are multiple and deeply intertwined. One major factor is the lack of new spaces, in fact fewer buildings are on the market because construction costs have become increasingly expensive. Labour is scarce, materials are overpriced, and building processes are struggling to innovate and become more efficient. Another reason is that houses have turned into a market asset: people no longer buy flats just to live in them, but to profit from them. It has become common to see homeowners holding several properties and renting them out. However, rental prices are shaped by demand, and another dynamic comes into play: big cities have increasingly attracted highly skilled workers, who can afford to pay more than the people who already lived there. Finally, short-term rentals also play a key role, since more and more landlords prefer to rely on online platforms, such as Airbnb, which drive up prices for long-term renters.
Pure market. Nonetheless, as the aforementioned Housing Commissioner reminded at the EIB Forum:
‘Behind these numbers, there are people’
Speaking of people…
The impact of this crisis is not only economic, but also deeply social. Think about a young adult may be forced to live with their parents and delay the decision to start a family or become fully independent. In short, housing matters, and not just for Europe’s markets.
Solutions?
Given the many roots of the problem, any solution will be just as complex. Much emphasis is placed on the need to build more properties. Yet, here lies a challenge: the European Union has no direct competence in this sector, but that does not take away its regulatory power or its ability to provide investment funds. Still, many argue that these measures are insufficient. Building more, building more efficiently, building in a more coordinated way is not enough.
It is not enough because the problem takes on different forms across the regions of the EU. It is not enough because the issue is not only economic, but also political. It is not enough because, as with many of the major challenges the EU is struggling to confront today, the problem lies in the way the Union is structured. Perhaps, once again, housing could become a lens to reshape the political and economic model that no longer seems to fit our present reality.
