By: Nisha Henning
Reading time: 7 minutes
Source picture: Jakub Zerdzicki, May 2025, via Pexels
Europe has made it easier than ever to cross borders. Finding an affordable front door on the other side is another story.
Finding a place to live is supposed to be an ordinary part of becoming independent. Across Europe, however, it is increasingly becoming one of the most difficult. For young Europeans, leaving home can entail entering a housing market where affordable rooms are scarce, and most of their income disappears for the roof over their heads. Between 2010 and 2024, house prices across the EU increased by 53%, while rents increased by 25%. In some Member States, the changes were far more dramatic. House prices rose by 231% in Hungary and 228% in Estonia. Meanwhile, Ireland experienced a 108% increase in rents. This crisis is experienced locally by a student looking for a room in Maastricht, or a renter in Dublin or by a family in Athens. These people may face very different markets, yet all confront the same question of how much of a life can you build when housing itself becomes unaffordable?
This leads to an increasingly European question: Where are people supposed to live, and can the European Union do anything about it? This question suddenly becomes less theoretical. In September 2026, the European Commission proposed an Affordable Housing Act as an attempt to give cities and Member States a clearer EU framework for acting where housing pressure has become severe.
Numbers matter, but they do not describe one uniform European housing crisis. So, while we often speak about the European housing crisis, there is no single crisis. A young person in Bucharest living in an overcrowded home, a renter facing high housing costs in Dublin, and a household in Athens struggling to pay its bills experience different sides of the same broader problem: access to adequate housing is becoming increasingly difficult for parts of Europe’s population.
Why can’t Europe build more homes?
The obvious answer to a housing shortage would seem to be simple, build new houses and apartments, but the reality is more complicated. The European Commission estimates that Europe needs more than 2 million new homes every year to meet the current demand. Around 1.6 million are currently being built, leaving a gap of roughly 650,000 homes annually. Closing that gap would require approximately €153 billion in additional investment each year.
Yet supply is only one part of the problem. Housing pressure differs dramatically between cities, tourist destinations, rural regions and Member States. That means there is unlikely to be one European solution capable of making housing affordable everywhere. A university city can be squeezed by student demand, a tourist destination by short-term rentals and second homes, another region may struggle with vacant or deteriorating housing rather than a lack of buildings. That local variation is exactly where the Commission’s new Affordable Housing proposal tries to enter the picture.
For young people, housing is about more than property prices; it can determine whether moving out of the parental home is possible, whether you can accept a job in another city, where you can study and when independence becomes financially realistic. The housing crisis therefore concerns much more than property prices. It affects when people can move out, where they can study or work and whether independence is financially possible.
So why is Brussels getting involved?
Housing has traditionally been dealt with primarily by national, regional and local governments. After all, the problems facing Amsterdam are not necessarily the same as those facing a shrinking rural region in another Member State, but the scale of the affordability problem has pushed housing much higher up the EU’s political agenda. The Commission says 51% of Europeans living in cities now consider housing an immediate and urgent local problem. The question is therefore no longer whether housing belongs on Europe’s political agenda, but what the EU can realistically add when the most important decisions are still taken closer to home. The Commission’s European Affordable Housing Plan aims, among other things, to increase housing supply, mobilise investment and make construction easier. Its construction strategy includes simplifying and digitalising permitting procedures and encouraging new construction techniques and materials.
What would the Affordable Housing Act actually change?
More controversially, the Commission has proposed an Affordable Housing Act on the 9th September 2026. Despite its name, the Act would not mean that Brussels starts determining how much your landlord can charge you. Instead, the proposal would create an EU framework through which public authorities could identify areas suffering from “housing stress” and justify certain local measures responding to that pressure. In other words, Brussels would not decide the local housing policy itself. It would create a common legal route for a city or region to show that its housing market is under exceptional pressure and that a targeted intervention is justified.
Under the proposal, an authority would first have to demonstrate that an area is under “housing stress”. The Commission proposes using a price-to-income test as a common starting point, combined with local evidence on supply, demand and whether the pressure is likely to persist. Rental pressure, overcrowding, social housing demand and homelessness can also form part of that local picture.
Why does that matter? Because cities are already experimenting with rules for short-term rentals, second homes and vacant dwellings. Those rules can affect EU internal market freedoms, so authorities need to show that restrictions are necessary, non-discriminatory and proportionate. The proposed Act would give them a more predictable framework for doing so.
Airbnb, empty homes and second homes: a European issue?
Specifically here is where the proposal becomes tangible. In a housing-stressed area, an authority could seek to restrict certain short-term rental activity or the acquisition and use of homes as non-primary residences, but it could not simply blame tourism or vacant properties for high prices. The Commission’s proposal requires evidence that the activity concerned has had a significant adverse effect on housing affordability or availability, and any response would still have to be targeted and proportionate.
That creates a difficult balance. A short-term rental can provide income to an owner and support tourism, while the same dwelling is unavailable to someone searching for a long-term home. A second home may be entirely legitimate, yet in a severely constrained market large numbers of non-primary residences can become politically controversial. The Act does not resolve those trade-offs for cities; it tries to give them clearer rules for making the choice themselves.
Importantly, local authorities would retain considerable discretion over whether and how to intervene. And the proposal is not yet law. It is currently being considered by the European Parliament and the Council. The EU is entering the housing debate, but that does not mean it is taking control of Europe’s housing markets.
Restrictions alone will not build homes
The Commission itself acknowledges a basic limitation restricting short-term rentals, second homes or vacant dwellings cannot solve a structural housing shortage on its own. The recommendation accompanying the proposed Act therefore focuses on the supply side as well as on accelerating affordable, social and student housing using land and existing buildings more effectively, simplifying planning and permitting and mobilising public and private investment. The proposed Regulation focuses on the common legal framework for certain local restrictions intended to protect existing housing for residential use. Together, they reveal the Commission’s broader theory of the crisis. Europe may need more homes and more room for local authorities to protect existing housing for long-term residential use.
Can Brussels make your rent cheaper?
The EU cannot erase local differences in the Member States. The reason a student struggles to find a room in Maastricht may be different from the reasons a family struggles to afford housing in Athens. What it can potentially do is address problems that national and local authorities struggle to solve alone: mobilising investment, changing European rules that affect housing, supporting construction and giving local authorities greater legal certainty when intervening in particularly stressed housing markets. Still, there is one important gap between creating better housing policy and creating affordable homes.
The Commission itself estimates that it needs roughly 650,000 additional homes every year. Faster permits and more investment may help increase supply, but new homes still need to be built in the places where people actually need them and at prices those people can afford. Even a perfectly designed rule for short-term rentals will not automatically produce a student room in Maastricht or an affordable family apartment in Dublin.
The Affordable Housing Act should therefore not be understood as Europe’s solution to the housing crisis. It is better understood as evidence of a problem once viewed predominantly through national and local politics that has become difficult for the European Union to ignore. Its significance may lie less in promising that Brussels can ‘fix’ housing and more in changing the boundaries of what Europeans expect the EU to help address.
Freedom to move, but can we afford to?
Finding a European solution is extremely difficult because the crisis differs from Member State to Member State, but it is still a problem that matters for the Union as a whole. Housing determines where Europeans can study, which jobs they can take, when they can leave home and where they can build their lives. If European integration promises people the freedom to live, study and work across the continent, those freedoms mean considerably less when people cannot afford somewhere to live once they get there. The real test of Europe’s new housing policy will therefore not be how ambitious it sounds in Brussels but whether finding a home becomes a little less impossible everywhere else.
