On December 16th, 2025, the European Commission proposed the first-ever European Affordable Housing Plan, taking a step forward in addressing one of the most urgent challenges faced by European citizens: ensuring access to affordable, sustainable and high-quality housing. 

The Plan aims to boost housing availability, stimulate investment and reforms, tackle short-term rentals in areas facing housing pressure, and assist those most impacted. Furthermore, it includes initiatives to enhance the productivity and innovation of the construction and renovation sector, with the goal of addressing the gap between housing supply and demand. 

The Commission has already mobilized substantial investments for a total of €43 billion in housing and will continue to do so under the upcoming EU long-term budget. 

The Housing Crisis 

Over the past decade, house prices have increased by 60%, while incomes have risen much more slowly. Rents have also gone up by an average of 20%, with even higher increases in big cities. Housing demand is expected to grow by more than two million units per year, but the number of building permits has dropped by 20% since 2021. Additionally, the rise of short-term rentals has put even more pressure on the housing market.  

This crisis not only makes it harder to access housing but also harms social cohesion, limiting mobility, increasing financial insecurity, and delaying important life decisions such as starting a family or continuing education. Even middle-income families and essential workers like teachers, nurses, and police officers can no longer afford to live in the communities they serve. The situation is especially tough for the most vulnerable, who have limited access to social housing and face growing risks of homelessness. The Commission’s plan aims to tackle these issues, addressing the root causes of the crisis and ensuring safe, affordable, and quality housing for all Europeans. 

The Plan’s Structure 

The European Affordable Housing Plan is structured around four key pillars, each addressing a critical aspect of the housing crisis: 

• Boosting housing supply: This pillar focuses on increasing the number of affordable homes by removing barriers to construction and development. It promotes the use of sustainable building methods, simplifies planning and permitting processes, and encourages better use of available land, particularly in urban areas. The aim is to accelerate housing construction while ensuring affordability and environmental sustainability. 

• Mobilising investment: To overcome the funding gap in the housing sector, this pillar seeks to attract both public and private investments. It introduces a Pan‑European Investment Platform to support large-scale housing projects and revises State aid rules to help Member States fund affordable housing initiatives. This will ensure that there is enough financial backing for the construction and renovation of affordable homes across Europe. 

• Enabling immediate support while driving reforms: This pillar focuses on taking both short-term actions and long-term systemic changes. It includes measures to limit speculative practices in the housing market and regulate short-term rentals, which reduce the availability of homes for locals. At the same time, it sets out reforms in areas like urban planning, land use, and taxation, aiming to make housing markets more accessible and affordable in the long run. 

• Protecting the most affected: The final pillar aims to ensure that vulnerable groups have access to safe, stable, and affordable housing. It includes targeted support for young people, students, and those at risk of homelessness, helping them find suitable housing. This pillar also focuses on expanding social housing, ensuring that the most disadvantaged can access decent living conditions and reducing the risk of social exclusion. 

Focus on Energy Efficiency  

A central element of the European Affordable Housing Plan is energy efficiency, which is seen as key not only to reducing housing costs but also to enhancing the long-term sustainability of homes. The plan focuses on improving the energy performance of Europe’s building stock through renovation efforts and the construction of new, low-energy buildings. Specific measures will promote sustainable technologies, such as advanced thermal insulation, high-efficiency heating systems, and renewable energy sources like solar panels. These measures aim to reduce energy consumption in homes, helping to lower utility bills and combat energy poverty, a significant issue affecting many European families, especially those with lower incomes. 

e-SAFE aligns perfectly with these objectives, our work aims to reduce energy demand in buildings, make homes safer, and support environmental sustainability. By focusing on smart technologies, energy-efficient design, and sustainable materials, e-SAFE works to drive improvements that reduce energy consumption and enhance the quality of life for residents. Our solutions ensure that safety and energy efficiency go hand in hand, contributing to a built environment that is sustainable, safe, and cost-effective. 

Next Steps  

The European Affordable Housing Plan represents the first step in assisting Member States to deliver more affordable, sustainable, and high-quality housing across Europe. The Commission will now focus on putting the plan into action. To support this, a new European Housing Alliance will be established, uniting Member States, cities, regions, EU institutions, housing providers and associations, social partners, industry stakeholders, and civil society. Furthermore, the Commission has announced the first-ever EU Housing Summit in 2026. 

For more information on the European Affordable Housing Plan, click here.