The hottest political issue European politicians aren't talking about

 

The hottest political issue European politicians aren't talking about

 

The Continent's housing crisis has gone from being a slow burn to a four-alarm fire — but some countries are handling it better than others.

 

By AITOR HERNÁNDEZ-MORALES

and GIOVANNA COI

 

Illustration by Sara Padovan for POLITICO

 

JUNE 20, 2024 4:00 AM CET

https://www.politico.eu/article/hot-political-issue-european-union-affordable-housing/

 

This article is part of The Home Front, a special report on housing in Europe, from POLITICO’s Global Policy Lab: Living Cities.

 

BRUSSELS — One of Europe’s long-simmering political frustrations is suddenly boiling over.

 

From Lisbon to Łódź, voters are angry about the lack of affordable housing. Anti-immigrant riots broke out in Dublin last fall, fueled in part by claims that the Irish capital’s limited public housing was being given to foreigners. Meanwhile, in cities like Lisbon, Amsterdam and Milan, thousands of protesters have taken to the streets to denounce the lack of affordable homes.

 

In a poll ahead of last week’s far-right surge in the European Parliament election, the Continent’s mayors listed housing as one of the most important issues facing their constituencies.

 

“We’ve reached the breaking point of a situation that has been on a slow burn for years,” said Sorcha Edwards, the secretary-general of Housing Europe, which represents public, cooperative and social housing providers. “For a long time, politicians were happy to ignore the issue because it affected low-income groups that vote with less force, but now it’s affecting people that take note: The offspring of the middle class and even the middle class itself.”

 

Europeans on average spend nearly 20 percent of their disposable household income on housing, and there’s the perception that availability is getting scarcer.

 

Edwards said that European countries had invested in affordable housing in the post-war period, but abandoned the issue in the go-go 1980s. As small-government neoliberal administrations came to power, they broadly cut spending. Cash-strapped municipal councils that had previously built housing gave up on new construction and sold off existing stock — but the private sector failed to pick up the slack.

 

“We’ve been warning about this issue for at least 10 years, but politicians have been happy to ignore it until recently, when it leaped back onto the agenda,” said Edwards. “Years of inaction have now been made worse by an inflationary atmosphere and [an] increase in mortgage prices that has led private-sector construction to stagnate.”

 

Edwards said that the characteristics of the housing crisis varied from city to city.

 

“In touristic locations, for example, you have the additional pressure posed by Airbnb and other short-term rental platforms, but the basic issue remains the same,” she said. “Local and national authorities’ decision to step back and not act on housing has led us to this point.”

 

Something rented in Denmark

Some parts of the Continent are better equipped to handle the crisis than others.

 

In Denmark, public housing is managed according to a national model. The housing associations are not run for profit and two-thirds of the rent collected goes into a national building fund, which has been used since 1967 to finance the construction of new homes and the refurbishment of existing stock.

 

The fund also supports health, employment and social initiatives in disadvantaged areas across the country.

 

Like the model made famous by Vienna, Denmark’s national housing program is based on the principle that public housing should be high-quality and widely available. Bent Madsen, CEO of the Danish Federation of Non-Profit Housing Providers, said that even though about a quarter of the dwellings were assigned to vulnerable groups — like single families or refugees — anyone could apply for a home, regardless of income.

 

About 965,000 people, or one-sixth of Denmark’s population, lived in social housing as of 2022. The public housing sector is the second-largest provider in the country, with almost 600,000 homes, the equivalent of one-fifth of the national building stock.

 

That the system is designed to be not-for-profit makes social housing significantly more affordable than its private-sector equivalent. For publicly owned homes built after 2000, rent per person per square meter is 40 percent cheaper than market prices, according to data analyzed by the Danish Federation of Non-Profit Housing Providers.

 

The Danish public housing system accommodates the most vulnerable and broader segments of the population, ensuring a diverse tenant composition as a whole and in individual housing areas.

 

As contributions to the national building fund come from the housing sector itself, “the public housing sector is not a burden on public finances,” Madsen concluded.

 

Swiss bliss

In Switzerland, many cities are weathering the greater storm thanks to their nonprofit Genossenschaften cooperative housing estates.

 

The aim of the Swiss housing cooperatives is to provide affordable, sustainable and community living. Because they’re nonprofit operations, they offer housing that is, at a national level, on average 15 percent cheaper than comparable rentals; they can be even cheaper than equivalent properties in housing-scarce areas.

 

Rebecca Omoregie, vice director of Wohnbaugenossenschaften Schweiz, an association of nonprofit housing developers, said that the co-ops were democratically organized, with all residents having the same rights and say regarding the buildings’ management.

 

“They are not state-subsidized social housing, which means that there are no mandatory income and wealth requirements,” she explained, adding that the properties were open to everyone. “However, the [cooperatives] ensure a good social mix and the majority apply occupancy regulations.”

 

In Zurich, about 7 percent of homes are now municipally owned — but nearly 18 percent of flats in the city are Genossenschaften, offering rental prices on average 45 percent cheaper than their for-profit equivalents. The mix helps keep housing affordable in one of Europe’s most expensive cities.

 

Each cooperative has its own procedure to enlist prospective tenants, either through waiting lists or by advertising vacant properties on its website. While in principle, membership of a Gennossenschaft is open to everyone, individual organizations can set additional criteria for membership — such as income — and current tenants have the final say on who gets in.

 

Omoregie said that Zurich’s government had helped the cooperative housing model become a success by purchasing land for such homes during the first half of the 20th century, and additionally by supporting the model with reduced capital requirements.

 

“Most of Zurich’s cooperative housing stock was built between 1919 and 1960, but a housing crisis in the late 1990s led to a revival of the cooperatives in Zurich,” Omoregie said. Local voters endorsed the model in 2011, voting in favor of a commitment to have nonprofit housing account for one-third of all rental units in the city by 2050.

 

Despite the Genossenschaften model, Zurich has been hit by the housing crisis. The construction of new homes has not kept up with the arrival of immigrants from European Union countries, and rents for new tenants have shot up 30 percent since 2016. Omoregie said co-op residents had been spared the price hikes, but that the overall system was unable — for now — to meet the wider demand.

 

“Cooperatives are struggling to expand because there is hardly any land on the market and the prices of the remaining land have risen to levels that make the construction of affordable housing impossible,” she said. “As a result, most of the growth in Zurich’s cooperative housing stock has been due to the replacement of existing houses with larger buildings.”

 

Housing Europe’s Edwards said politicians were finally waking up to the crisis and that, in some countries, substantial measures were being enacted.

 

“In Dublin, for example, they’re investing up to €5 billion, but that’s not really taking the edge off the crisis as yet,” she said. “You can allocate the money but, ultimately, houses take time to build.”