EU Joint Research Centre · Science

EU Proposes New Method to Identify Housing Stress

The European Commission has proposed an Affordable Housing Act, introducing a data-driven methodology for authorities to identify and address housing stress across the EU.

Between 2013 and 2024, EU house prices rose by nearly 60% and rents by 20%, while household incomes grew by only 40%. Projections indicate a need for over 7 million additional dwellings by 2035 to meet demand.

Housing affordability challenges vary regionally. Major cities and capital regions are expected to face the most acute pressures due to population growth and urbanization. Coastal areas and tourist hotspots also anticipate higher demand, while some rural areas face vacant housing stock.

To address this, the Joint Research Centre developed a two-tier methodology for assessing housing stress. This framework uses price-to-income data and considers growth in this ratio over the past decade.

An area is flagged for potential housing stress if its price-to-income level is high, or medium with a decade of growth. Authorities must also identify a persistent source of housing pressure, such as population dynamics or impacts from short-term rentals.

This approach aims to ensure that investments and measures taken by competent authorities are targeted effectively to improve housing affordability and availability at the local level.

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