Europe’s housing crisis is becoming one of the EU’s most pressing social and political challenges. From Barcelona and Amsterdam to Lisbon and Paris, access to affordable housing is becoming increasingly difficult for millions of citizens, particularly young people, middle-income households and workers in essential sectors.
Property prices and rents are rising at a pace that, in many cases, far outstrips wage growth, deepening social inequalities and placing new pressure on local communities, Kata Tutto, President of the European Committee of the Regions, told Phileleftheros.
Tutto said the housing issue now extends well beyond the property market, with wider social and political consequences. “Reducing inequalities and social disparities remains a top priority, because inequalities weaken the EU on the international stage,” she said, adding that global crises, from tariff wars to disruption in the Strait of Hormuz, affect national and regional economies in different ways.
Cyprus appears, for now, to be in a relatively stronger position than several other Member States. However, pressures are also rising locally, particularly in urban and tourist areas, while the growth of short-term rentals and strong investment activity are creating fresh concerns over the future of the housing market.
The issue is becoming increasingly important not only for the economy, but also for social stability, local cohesion and everyday life. For Tutto, housing is now not only a social concern, but a strategic question for the future of the EU itself.
Housing affordability has become a growing concern across Europe. How serious is the housing crisis in the European Union today?
Housing affordability has become one of the defining social, economic and political challenges of Europe. Over the last decade, house prices in the European Union increased by more then 60% In many cities, salaries simply did not keep pace. Young people postpone starting families, middle-income workers struggle to stay in the cities where they work, and essential workers — nurses, teachers, police officers, care workers — are increasingly priced out of the communities that depend on them most. But what we are facing is not simply a “housing market problem.” It is a deeper structural mismatch between where Europe’s economy concentrates opportunities and where people can still afford to live.
To what extent are issues such as tourism pressure, short-term rentals, and foreign investment affecting local housing markets across Europe?
Tourism, short-term rentals and international investment are not the only causes of Europe’s housing crisis — but in many cities and regions they have clearly become powerful accelerators of the problem.
What makes housing particularly complex is that it sits at the intersection of local life and global capital. A family looking for a home is now competing not only with other local families, but sometimes with tourism platforms, international investors, speculative funds and global wealth flows.
In many attractive urban and coastal areas, short-term rental platforms have transformed thousands of apartments from homes into tourist accommodation. This reduces the supply of long-term rentals and pushes prices upward, especially in historic city centres and tourism-dependent regions. Cities like Barcelona, Amsterdam, Florence or Lisbon are already trying to regulate this because they see entire neighborhoods gradually losing permanent residents.
But tourism pressure is only one layer of the story.
Which EU member states or regions are currently facing the greatest housing pressures, and why? And how about Cyprus? Do you have any data about the housing crisis here?
In ten years, house prices more than tripled in Hungary (+290%) and have more than doubled in 12 countries including Portugal (+180%), Lithuania (+168%), and Bulgaria (+157). The increase was beyond 50% in Cyprus. During the same period, rents increased in all the 27 EU countries, with the highest rise registered in Hungary (+109%), followed by Lithuania (+88%) and Ireland and Poland (both +76%). In Cyprus the increase is around 25%. In general, according to Eurostat, Cyprus is an better situation than bigger member states. With 69,4 % of home owners and 30,6 % of renters, is close the EU average (Germany has over 50% renters, while Hungary 10% approximately). So, compared to the rest of the Union, Cyprus is doing better, with very little overcrowded houses, and broadly stable housing prices, at an affordable level. But, beyond statistics, but I know the concerns of my Cypriots colleagues in the Committee of the regions as the situation might be getting harder here too. With a 30% increase in short term rental demand registered at the end of last year, and investment in housing remaining strong. the evolution of the housing market will require the highest attention.
It is a European problem indeed. But it also is a local and regional one. On the one hand, we have all followed the confrontations of major cities with short-term rental platforms, and the complaints of some touristic rural areas which struggle with mass tourism too. On the other hand, we also see villages emptying, and we are currently advocating a right for citizens to stay where they want to live.
This reveals the variety of situations there are within national and regional borders.
What role can local and regional authorities play in addressing the housing crisis, and are they receiving enough support from Brussels?
Cities and regions decide how land is used, where housing can be built, how quickly permits are delivered, how infrastructure is developed, how transport is connected, and how neighbourhoods evolve. They manage water systems, waste, energy networks, schools, public transport and increasingly climate adaptation — all of which directly shape whether housing is affordable and liveable.Many mayors across Europe — including in some of the wealthiest cities such as Paris, Amsterdam — openly say that even strong local economies are struggling to keep housing affordable for middle-income residents and key workers. This shows that the problem is structural and European in scale.At the same time, the crisis looks very different depending on the territory. Some major cities struggle with overtourism and speculative investment pressure, while some rural regions face depopulation, ageing and empty housing stock. This is why local and regional flexibility is essential. There is no single European housing model that can simply be copied everywhere.The European Union already supports cities and regions through cohesion policy, the European Investment Bank, urban development funds and energy renovation programmes. These instruments finance sustainable renovation, social housing, energy efficiency and urban regeneration projects across Europe.
But honestly, the scale of the challenge is now growing faster than the financial and administrative capacity available.
Following up on the previous question, what specific measures can local authorities take? Do you have any recommendations for Cyprus?
Many cities are currently testing measures to set a limit to short term rentals, as Barcellona, to introduce a taxation on empty apartments and houses, as Paris, to innovate the offer of social housing solutions, as Vienna is doing since decades. As Committee of the regions, we are acting as a platform to connect local and regional authorities facing the same challenges. We have put pressure on EU institutions to have an EU Affordable Housing Plan, providing a “toolbox” to help local authorities tackle the housing crisis. On short term rentals, on simplifying procedures for new builds, on sustainability in constructions.
Climate policy and the green transition are reshaping urban development. How can the EU ensure that sustainability goals do not make housing even more expensive?
Yes, everything has a price — including sustainability. The role of public spending is precisely to help redistribute costs and benefits more fairly across society, across territories and across generations. This is a constant balancing exercise: managing short-term costs while protecting long-term social, economic and environmental stability.
The green transition should therefore not be seen as something separate from affordability. In many parts of Europe, families already pay the price of unsustainable housing through high energy bills, overheating cities, water stress or poor public transport. Sustainability, if designed well, can reduce long-term living costs and make communities more resilient.
But we must also be honest: environmental regulations without flexibility or financial support can increase costs and create social backlash. This is why the transition must be territorially sensitive and socially intelligent.
Do you believe that countries such as Cyprus, which is considered a climate change hotspot, should adopt even stricter measures and take action immediately?
I would never dare to tell another country or society what it should do. These are deeply political, economic and social choices that must ultimately be discussed and decided within Cypriot society itself.
And honestly, this is becoming increasingly difficult everywhere in Europe. We live in a time where public debates too often turn into blame games — blaming Brussels, blaming governments, blaming markets, blaming tourists, blaming climate activists, blaming someone else. But climate adaptation and sustainability ultimately require something more demanding: collective responsibility.
It is clear that all of us — institutions, businesses, communities and citizens — will need to adapt more, care more, and take greater responsibility for the long-term future of the places we live in.
Social inequalities are becoming more visible in many European countries and especially regions. Are you concerned that the housing crisis could deepen political and social divisions within the EU?
International instability and external threats have led too many people in Brussels and in capital cities to consider reducing disparities across the EU as a challenge of the past. This vision inspired also the European Commission proposal for the next long-term budget. But it is wrong. Reducing disparities and social inequalities in the EU is still a top priority, because disparities make the EU weaker on the global stage. Because international crises – from the tariff wars to the blockage of Hormuz – have diversified consequences on our different national and regional economies – for example the increase in aviation fuel prices is immediately disruptive in all our islands, more than anywhere else. Luckily, in this context of disinvestment from social cohesion and convergence, the housing crisis can rely on a strong attention from top decision makers. But all promises of a stronger EU action in this field clash with the proposals for the future EU budget allocations and with the position of several member states who oppose any increase of our common investments while they feed the expectations of “more Europe” on emerging dossiers as defense and housing. So yes, I am very concerned that weakening our commitment against inequalities undermines the very foundation of our Union.
Cohesion policy has long been one of the EU’s main tools for reducing disparities. Can cohesion funds play a stronger role in housing policy in the coming years?
Cohesion policy is currently supporting sustainable and affordable housing in several member states, also thanks to the reprogramming exercise promoted by Vice-President Raffaele Fitto, in close cooperation with regions and cities. But this policy does not have the financial capacity to make a difference in this field and, looking ahead to the next budget, it will have even less resources to tackle the many challenges to Europe’s cohesion: from declining rural areas to the industrial transition, from SMEs innovation to infrastructures and connectivity. In the absence of a strong increase of its allocations, investments on housing, especially in the most attractive and dynamic areas, must be provided via the new European Competitiveness Fund. How can we expect our most attractive innovation hubs to flourish if they cannot attract workforce and talents because of the lack of affordable housing solutions? In many cases, housing is a matter of competitiveness, for the construction sector, for sustainable renovations and for workers to live where they find good opportunities. But let’s be clear, a 2 trillion budget on seven years cannot change much. Investment will need to combine private and public funding, and this is why the Pan-European Investment Platform for Affordable and Sustainable Housing will be an important step ahead for all of us. In this context, the work done to mobilise the Council of the EU by the Cyprus Presidency and Minister Ioannou has been highly productive and strongly appreciated by EU regions and cities.
Read more: