Empowering cities to invest in affordable housing

  • Cristina (Commu... profile
    Cristina (Commu...
    6 December 2018 - updated 1 week ago
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“Our actions and recommendations on better regulation and better funding and financing aim at de-blocking public investment in affordable housing”, said Michaela Kauer, coordinator from the City of Vienna. The past 10 years have seen a massive decline in affordable housing investment, estimates are at 57 billion per year that we missed to build and renovate. The lack of affordable housing and housing cost overburden affect citizens all over the EU, but they are a special challenge in our cities.”

Revision of EU state aid law

On better regulation, Housing Partnership identified legal uncertainties and unclarities in EU state aid rules as major obstacles to public investments in affordable housing and delivered a set of three actions in this area: Firstly, an analytical guidance paper showcases the problems in different cities, regions and countries and identifies solutions in the legal field. Secondly, partnership held a capacity-building workshop on public support to housing with support of the Committee of the Regions, where legal experts and practitioners met in Brussel and reinforced the findings in more detail. Thirdly, Partnership strongly recommends revising the SGEI decision 2012 with the aim to delete the narrow target group for social housing in EU competition law. As Barbara Steenbergen, IUT, explained: “We have delivered a thorough analysis how EU state aid has affected the ability of cities and affordable housing providers to produce new and improve existing housing. A definition of a target group is in clear contradiction with the principle of subsidiarity; moreover it has led to court cases and legal disputes, and thus blocked public investment in affordable housing all over the EU. It is now to the EU legislator and the Commission to act.”

Capacity building and better financing conditions in the European Semester

On better funding and financing conditions, the partnership deems that as housing situations vary a lot from city to city and country to country, comparisons are difficult. However, evidence shows that old EU Member States are able to absorb more EU funds and EIB financing than new EU Member States. The existence (or not) of frameworks, aggregators, structures for funding is identified as main reason. Capacity building is therefore identified as vital to overcome this, and the need to explore the constraints on the basis of specific case studies was stated. “It is vital to create the right structures to address funding in many cities, and to help them in combining the different available sources in an efficient and intelligent way,” said Victor Schaap from the Dutch Ministry for Housing.

Cohesion policy and EIB financing are very important sources for affordable housing; however, they are not the primary ones: social, public and affordable housing is mostly financed on national and subnational level – and by the users. Therefore partnership sets out an action that can allow de-blocking public investment in housing in the frame of the European Semester. A more active use of the investment clause for affordable housing projects is one recommendation in this action. Partnership also recommends to develop an indicator on social and affordable housing in the Social Scoreboard that better takes into account the realities of socio-economic situation of EU citizens. The reference threshold of total housing costs should not be higher than 25% of the disposable income of a household, when calculating the housing overburden rate. Rui Franco, Deputy City Councillor for Housing in Lisbon, stated that “setting the threshold lower would constitute a recognition that affordability is a primary goal of housing policy, and that public intervention is therefore necessary. The market does not supply with what people need; public authorities therefore have the responsibility to act, as the Housing Partnership recommends. Housing and other costs of living have risen substantially while incomes have declined the past years; this must be reflected in a realistic indicator that allows people to work for living, not for housing.”

Background and links

The work of the Housing Partnership is documented on its website. The full text of the Action Plan is now published as well as a brief description. A range of documents has been produced by the members and the expert of the partnership or commissioned to research institutes, which can be found in the annexes of the Action Plan.

 

 

Presentation of Action Plan and discussion of follow-up at the Final Meeting of the Housing Partnership in Vienna

Better knowledge base and exchange, good policy and practice for housing

 

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