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By Euronews
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In order to help tackle the housing crisis, the European Commission is working on proposals that would boost the construction of new homes, loosen state aid rules and remove bureaucratic barriers.
“What we are trying to do is to have a holistic approach,” European Commissioner for Energy and Housing Dan Jørgensen said on Euronews’ flagship interview programme The Europe Conversation.
“We need to make it possible for member states to actually support affordable housing,” he added.
Jørgensen and his experts are working on a package of proposals, the EU Affordable Housing Plan, that he plans to present before Christmas.
The appointment of the Danish social democrat as the first-ever Commissioner for Housing was a reaction to a crisis that has dramatically increased over the past years.
The crisis, some experts call it an emergency, is characterised by surging house prices and rents, leading to reduced affordability, particularly for young people and low-income households.
This is compounded by a shortage of new housing construction, a high rate of living in overcrowded homes, and a significant portion of the population struggling with housing costs.
The crisis is also linked to factors like inflation and low interest rates with consequences including homelessness and difficulty for first-time buyers: low interest rates in previous years made mortgages more affordable, further stimulating demand and driving up prices.
Bad for society
Jørgensen pointed in particular to the effects the housing crisis disproportionately has on young people.
Many struggle to afford rent or mortgages, with a significant number spending over 40% of their income on housing, and a growing number living in overcrowded conditions.
In addition, many young people can’t leave their parents’ home as they struggle to find entry-level jobs.
“That means a lot of things. It means that maybe you cannot really start the family life that you want. You cannot get the education or the job or the training that you want,” the Commissioner said.
“On the individual level, it’s very, very bad, of course. But also for society, it’s just the fact that we don’t have the mobility that we need in the labour market, for instance, and that people don’t get the education that they really wanted and we as a society need them to get. That’s really bad.”
Technically, housing is the responsibility of the member states, not a Brussels domain.
Yet, Jørgensen sees it as his mission to bring stakeholders and interest groups together to improve conditions on the real estate and rental markets.
“What can be done on a European level to get more investments? Because, really, it’s a paradox that there’s actually not a lack of money out there in the markets wanting to be invested in,” he said.
“The institutional investors are there, they’re looking for long-term investments that will bring them back a steady revenue.”
“We can certainly help bring the investors and the ones who need the investments together. And that’s what we’re trying to do with the pan-European investment platform that we’re making together with the European Investment Bank.”
Brussels also plans to propose a new initiative to tackle the problem of short-term rentals offered on platforms such as Airbnb or Booking.com.
“Tourism is a good thing, but it’s not good if it actually feels like it’s ruining the lives of the people who live in these cities,” Jørgensen stressed, pointing to how the increase of the number of short-term rental platforms has led to a significant rise in housing prices.
The so-called “financialisation of the sector” will also take centre stage in Brussels’ plans to tackle the housing crisis, the European Commissioner said. “There’s a lot of speculation, and housing is considered by many investors as a commodity”.
“I don’t mind people making money, but we also have to acknowledge that when that is the case, then maybe the investments that are being made don’t necessarily lead to the best result for society as a whole,” Jørgensen concluded.
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