Europe’s housing crisis reaches well beyond the price and availability of homes. It shapes health, social inclusion, economic security, intergenerational fairness and environmental sustainability. This MERGE policy brief argues that increasing housing supply and mobilising investment are essential, but these measures will not deliver on their own unless the homes created and renovated are also healthy, inclusive, secure and affordable over the long term.
Housing is one of Europe’s top priorities
House prices across the EU rose by more than 60% between 2013 and 2024, outpacing household income, while average rents increased by around 20%, according to the European Affordable Housing Plan. These pressures fall unevenly. In several countries, the share of 25 to 34 year olds living with their parents grew significantly between 2018 and 2023, and a quarter of mortgage-free older homeowners cannot afford to keep their homes adequately warm. Separate research shows that 30-year-olds born in the 1980s have six percentage points less homeownership than those born in the 1960s and 1970s, raising concerns about intergenerational fairness.
Poor housing is also a public health issue. In 2024, 17% of the European population lived in overcrowded homes, rising to around 40% in Latvia and Romania. One in seven households experienced leaking roofs, damp walls and floors or other building deterioration. Housing First and similar approaches to fight against homelessness now operate in around three-quarters of EU Member States, but few programmes reach more than 1% of a country’s homeless population.
Drawing on the MERGE Policy Lab on housing, organised by the European Policy Centre with EuroHealthNet in May 2026, this brief proposes how the implementation of the European Affordable Housing Plan can address these pressures more coherently at European, national and local levels.
What we propose and how
The brief sets out six priorities for action:
- Put wellbeing and housing adequacy at the centre of housing policy across governance levels. Develop a shared European understanding of healthy and adequate housing, and integrate housing with health, energy, climate, transport, spatial planning and social policy.
- Prevent housing insecurity and exclusion before they become crises. Use early-warning indicators such as eviction notices and rent arrears, connect at-risk households with support, and scale up Housing First approaches.
- Renovate, adapt and make fuller use of Europe’s existing housing stock to improve health, accessibility, energy performance and climate resilience while responding to demographic change and avoiding displacement.
- Build and adapt diverse housing options, inclusive homes and neighbourhoods around people’s changing needs. Promote mixed housing types, expand co-housing and intergenerational models, and integrate housing planning with access to transport, care, education and employment.
- Mobilise public and private investment with safeguards that preserve affordability and public value. Make public and EU funding conditional on long-term affordability, and assess success by social and wellbeing outcomes, not only by capital mobilised or homes delivered.
- Improve institutional capacity and support public, cooperative and social-economy housing provision. Support long-term ownership models such as cooperatives, limited-profit housing and Community Land Trusts, and institutionalise resident participation in housing decisions.
Who should act
EU institutions:
- Use the European Affordable Housing Plan to connect supply, affordability, health, inclusion and homelessness within one coherent framework across governance levels
- Use the European Semester and future MFF instruments to monitor housing adequacy and to fund renovation, healthy homes and homelessness prevention
Member States:
- Develop long-term housing strategies with measurable objectives
- Strengthen tenant security, eviction prevention and early intervention to address housing insecurity and exclusion
- Create enabling legal and financial frameworks for cooperative, community and social-economy housing
Regional and local authorities:
- Integrate housing into place-based strategies for health, mobility, care, urban planning and local economic development
- Map local housing needs and unused stock
- Build partnerships across public authorities, housing providers, financial institutions and communities
Social housing and social economy providers:
- Develop mixed and flexible housing models, e.g. cooperative or co-housing
- Engage residents early in design, renovation, and neighbourhood stewardship
- Work with financiers on finance models with transparent social objectives
Case studies from across Europe offer ideas for how to act on these priorities, from Finland’s Housing First programmes to Vienna’s social housing model and Wales’s integration of health and housing policy through its Well-being of Future Generations Act. Solving Europe’s housing challenge means ensuring that homes are healthy, secure, inclusive, affordable and environmentally sustainable over time, work that goes well beyond building more homes or seeking funds.
