The European Union is set to ease restrictions on state aid and unlock funding to bolster affordable housing across its member states, according to the EU’s first-ever Housing Commissioner, Dan Jørgensen. The move comes as rising rents and housing costs spark protests and become a central political issue throughout Europe. This shift in policy represents a significant intervention by Brussels into a domain traditionally managed at the national and local levels.
Jørgensen announced the impending changes during an interview with Euronews’ The Europe Conversation program, stating that current state aid rules are “way too strict” and hinder effective support for housing initiatives. The EU Executive plans to present a comprehensive Affordable Housing Plan in December, outlining a mix of legislative proposals and non-binding measures aimed at increasing housing availability and reducing financial burdens on citizens.
Addressing the Affordable Housing Crisis: A New EU Approach
For over a decade, the EU has seen a substantial increase in housing costs. From 2010 to the second quarter of 2025, rents climbed nearly 29%, while house prices surged by over 60%, leading to widespread social unrest and demonstrations in cities like Lisbon, Barcelona, and Copenhagen. These trends have created a situation where even individuals with stable employment are priced out of urban centers.
Jørgensen emphasized that the crisis is not simply a matter of supply and demand. Rising construction costs, up as much as 48% between 2010 and 2023, significantly contribute to the problem, as detailed by Statista. The Commissioner underscored the need for a “holistic” strategy addressing investments, energy efficiency, social policy, internal market regulations, and importantly, the loosening of state aid restrictions.
Currently, EU treaties limit state aid, requiring it to be justified by economic development. The upcoming plan seeks to modify these rules to allow member states to more easily support the construction of affordable and social housing projects. This change is designed to streamline the process and accelerate the creation of much-needed housing units.
Tackling Short-Term Rentals and Financialization
Beyond easing state aid rules, the EU Affordable Housing Plan will also tackle the growth of short-term rental platforms, such as Airbnb, and the increasing “financialization of the sector.” Jørgensen expressed concern that the proliferation of short-term rentals is exacerbating housing shortages and driving up prices, saying tourism should not “ruin the lives of the people who live in these cities.”
The issue of housing becoming a commodity for investors is also on the EU’s radar. “There’s a lot of speculation, and housing is considered by many investors as a commodity,” Jørgensen noted, acknowledging that while investment is not inherently negative, it’s crucial to ensure that it benefits society as a whole, rather than solely prioritizing profits. A new initiative targeting short-term rentals is expected by 2026.
This marks a considerable evolution in EU policy. Historically, housing has been considered a national competence. However, the escalating crisis and its visibility in recent elections have prompted a recognition within Brussels that a coordinated European response is necessary. The appointment of Jørgensen as the first EU Housing Commissioner underlines this commitment.
While the details of the December plan remain to be finalized, it’s clear the EU intends to play a more active role in addressing the housing affordability crisis. Secondary keywords such as “rent control” and “social housing” are likely to be further discussed as part of the wider EU strategy. The initiative aims not only to increase the supply of homes but also to create a more stable and equitable housing market for all European citizens.
Citizens and stakeholders should watch for the full release of the EU Affordable Housing Plan in December, and subsequent legislative proposals. Further information on the Commissioner’s interview can be found on the Euronews website.
