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Solving the affordable housing crisis: Turning InvestEU into a success story

Social investment / POLICY BRIEF
Mihai Palimariciuc

Date: 23/02/2021
The European housing market faces an affordability crisis. The percentage of households that spend over 40% of their disposable income on housing has risen among lower- and medium-income families. On any given night in the Union, 700,000 people have to spend the night on the street. At the same time, public investment in new social housing and renovation projects has decreased considerably in the past decade.

InvestEU, the Union's new investment fund, presents an opportunity to curb this polarising trend and address the lack of affordable housing in Europe. But to become a success story, the European Investment Advisory Hub (EIAH), which helps select and develop investment projects, must invest more in capacity building to better identify and support bankable projects and investment platforms. Member states, meanwhile, must increase public support for housing and use innovative financing instruments to 'de-risk' investment so that affordable housing is a secure and predictable market for the private sector. Finally, the European Commission should clarify the rules on state aid and formulate a clearer definition of social housing.

The recommendations presented in this Policy Brief are based on insights gathered through the activities under the EPC Task Force on affordable and decent housing solutions. The task force was set up a year ago in cooperation with the King Baudouin Foundation, Schneider Electric, the European Federation of National Organisations Working with the Homeless (FEANTSA), and the Cariplo Foundation.

Read the full paper here.

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