The problems on the housing markets

The need of affordable housing

Decent and affordable housing is a fundamental human need, and a basic human right. Access to affordable housing is one of the fundamental pillars in well-functioning democratic societies. The challenge of ensuring housing for all, and thereby contribute to political stability, eradication of poverty and social exclusion, is still immense in many countries.

Large subsidies and subprime loans to house-owners + an excessive and unregulated financial market have caused the present financial crises “the disproportionate use of such policies has contributed to price volatility and to the ongoing housing affordability and availability crises.” (UN Special Rapporteur for Housing Raquel Rolnik)

“Countries that have adapted a more balanced housing policy, such as Austria, Germany, and Switzerland, have suffered little from the recent property crises.“(UN Special Rapporteur for Housing Raquel Rolnik)

Tenure neutral housing policies contribute to more stable housing markets and counteract housing price bubbles (Prof. H. Priemus, Prof. M. Elsinga of Delft University, C. André, OECD, several other researchers)

A substantial, transparent and fair rental market is needed in every country to facilitate residential and labour mobility. A grey or black rental market is not a solution. That is the reality in many countries with a very high rate of owner-occupation,

We need a rental market with a level playing field for landlords and tenants, which includes security of tenure. The rental market should consist of at least 1/3 of the whole housing market and even more in the big cities.  Eurostat figures shows that in the vast majority of the well developed countries at least 1/3 of the households live in rented dwellings. The highest rates are in Switzerland 61 and Germany 55 percent. The lowest in Romania 4 and Croatia 7 percent.

 The market alone cannot solve the housing problems for many e.g.

  • Young households
  • Migrants and refugees
  • Low and low to medium income households
  • Those with disabilities and those in need of care

Social housing, housing allowances and other forms of subsidies and adapted housing are necessary to fight market failures and homelessness. Especially important is a stable supply of affordable rental housing.

Subsidies to provide affordable housing should not be able to be capitalized. The aim of the subsidy is to lower the costs not to stimulate higher prices. Subsidies without conditions, e.g. mortgage interest deduction, on a “free” market, stimulate speculation, contribute to increased prices on homes and construction, push up rents and decrease housing affordability especially in regions with high migration. The aim should be that prices and rents are lowered in an amount that corresponds to the value of the subsidies.

A social mixture is desirable and wise. The social climate in a housing area effects the health and the future possibilities of households and individuals living there. Social and affordable housing are needed in areas where the jobs are to counteract unemployment and cater for employers’ demand for labour. The target group for social housing sector should be a national decision without interference from the European Commission.

We’ve been experiencing over the last three years the effects of the complete deregulation of the housing market. We keep seeing people losing their homes because of evictions, families being unable to pay off their mortgages, households facing inadequate living conditions. European institutions were proven to be lacking decisiveness and political will to come up with alternative policies that would put the peoples’ needs first. Further hesitation cannot be acceptable anymore. The time for action is now.

The extreme situation of more than a million households in Spain, Ireland and Greece in either eviction process or dramatic negative equity doesn’t leave any more space for maneuvering… Of course, it’s clear that housing markets are different in each country while it has to be recalled on the other hand that most extreme phenomena are caused by massive incentives to home ownership and mortgage debt via low interest rates. On top of that the lack of public affordable social housing provision took away the only possible safety net.

The stable supply of affordable rental housing allows a protection of the most vulnerable households. The much wanted stability can be secured through tenure- neutral policies that will contribute to more stable housing markets and counteract housing price bubbles. Home ownership should be finally unlinked from a certain social status it carries in many EU countries and home rental should be supported in every possible way.

Urgent demands in Europe today

Guarantee access to decent housing – fight homelessness!

Promote tenure mix, tenure neutrality and social inclusion!

Promote residential and labour mobility!

After the generous bailing out of the banks it is time to bail out the people!

No mass evictions!

The ”mortgage to rent” scheme is necessary in many countries!


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