Housing policies in Europe
Few levers are as capable of reshaping the face of our society as housing policy. The housing question sits at the center of a web of economic-financial, technological, social, demographic, environmental, fiscal and institutional dynamics, and therefore calls for systemic, multidimensional solutions. Until the 1990s, access to housing in Europe was considered a pillar of the welfare state, on a par with healthcare, education, and public transport. Governments understood clearly that housing security is a platform of social stability from which family formation, social mobility, and labor market participation all follow. A significant share of public policy was therefore dedicated to making housing accessible to the many. Over the last 30 years this vision has weakened, giving way to a pervasive financialization: housing as an investment, a real estate asset, a tool for wealth accumulation. Housing policies, aimed at affordability, inclusion, and price stability, have been forced to retreat in the face of a buoyant “real estate” sector in constant pursuit of capital appreciation, rising yields and climbing prices, driven not only by demand for livable homes but also for high-performing financial assets. Hence the housing crisis that characterizes Europe today.
Current issues
According to the European Commission, the Union will need to build more than 2 million homes a year in the coming years to meet current demand. That is roughly 600,000 to 800,000 more than the 1.4 million built today. Is building residential properties at a faster pace our solution? Probably not. It should be noted that around 20% of Europe’s residential stock (which totals 180-190 million homes) sits vacant, while, on the other hand, around 17% of the European population lives in overcrowded conditions. This points to a strong inefficiency in the use of the existing housing stock. Housing prices have risen by about 55% between 2015 and 2024, growing faster than incomes. Nearly one in ten urban households bears housing costs above 40% of their disposable income. Furthermore, only 6-7% of Europe’s housing stock consists of social housing, and short-term rentals increased by 93% between 2018 and 2024. In this context, building more homes is probably a necessary, but not sufficient, condition. Affordability also depends on location, the reuse of existing stock, the availability of price-controlled social housing, market regulation, and the ability to steer new supply toward households’ needs rather than solely toward solvent demand. Beyond this, construction activity poses a serious environmental question: in the EU, the built environment is responsible for 40% of energy consumption, about 36% of greenhouse gas emissions, requires around 50% of extracted materials, and generates over 35% of total waste. It is also one of the main drivers of land consumption, habitat fragmentation, and biodiversity loss, both through urbanization and through the extraction of raw materials needed for construction.
The impact of buildings
For over two decades, European construction policy has focused almost exclusively on reducing energy consumption during buildings’ use phase, through envelope insulation, the adoption of high-efficiency systems, the electrification of consumption, and the spread of renewable energy sources. Significant progress has been made on the efficiency front: buildings with nearly zero energy consumption, attention to lifecycle emissions, greater use of recycled materials, and design oriented toward climate resilience. The energy needs of new buildings have fallen by up to 90% compared with the 1980s. But the very success of these efficiency policies has revealed that, as operational emissions progressively decrease, the emissions generated in the building’s other lifecycle phases become more significant. These “embodied carbon” emissions include raw material extraction, the production of construction materials, transport, construction, maintenance, component replacement, final demolition, and waste management. For some newly built, high-energy-performance buildings, embodied emissions can already account for over 50% of total emissions across the building’s entire lifecycle, while in the most advanced cases it can be the predominant component of the climate footprint. As a result, emission reductions cannot be pursued solely through energy-efficient buildings, but also require a reduction in the overall consumption of material resources. It is in this context that the principle of “sufficiency” is gaining growing relevance, recently embraced also by the European Commission.
From efficiency to sufficiency
Sufficiency represents a conceptual evolution beyond efficiency. While efficiency aims to deliver the same service while consuming less energy and fewer resources, sufficiency questions the very need to use new resources, and seeks alternative ways to meet the same needs through better organization, management, and use of resources already available. The two strategies are not alternatives but complementary. Efficiency mainly acts on the intensity of resources used, while sufficiency acts on the demand for resources, seeking to avoid consumption when it is not strictly necessary. Applied to the construction sector, sufficiency translates into an articulated set of strategies: reuse of the existing building stock, recovery of unused buildings, repurposing of properties, urban regeneration, energy retrofitting instead of demolition and reconstruction, brownfield redevelopment, design of buildings adaptable over time, increased intensity of space use, sharing of spaces and services, layout flexibility, and design oriented toward durability and disassembly. The goal is not to build less in absolute terms, but to build only when new construction is genuinely the solution with the lowest social and environmental cost. Last but not least, while the technical quality of construction has improved, it has rarely been matched by corresponding economic affordability.
Conclusions
The need emerges to reconcile substantial investments for the ecological transition with the need to contain final costs. In the absence of effective public policies, the risk is that environmental innovation produces ever more high-performing buildings destined for a narrow segment of the population. From this perspective, the real European challenge no longer consists solely in building low-emission buildings, but in creating a housing stock that is simultaneously climate-neutral, resilient, resource-efficient, economically affordable, and capable of limiting land consumption. This requires a paradigm shift: moving from the sustainability of the single building to the sustainability of the housing system as a whole, integrating territorial planning, industrial policies, technological innovation, and social justice. This is the ground on which the credibility of future European housing policies will be decided.
Sebastiano Renna
Sustainability & Stakeholder Management Expert
Sources
European Commission (2025), “The European Affordable Housing Plan”
Eurofound (2016), “Inadequate housing in Europe: Costs and consequences”
European Commission (2024), “Energy Performance of Building Directive”
European Commission (2025), “Understanding the housing crisis”
European Commission (2026), “Supporting life-cycle approaches to decarbonise European buildings”
BPIE (Building Performance Institute Europe), The VELUX Group, No Objectives, RISE Lab, Artelia (2026), “The Housing We Need for the Future We Want”
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