‘We have to make it more attractive,’ Minister of Interior, Konstantinos Ioannou, said about the prospect of increasing the number of investments in affordable housing, responding to a question regarding EU-wide measures and initiatives at a Press conference following the Informal Ministerial Meeting for Housing in Nicosia, within the framework of the Cyprus Presidency of the Council of the EU.
Both Minister Ioannou and European Commissioner for housing, Dan Jorgensen, laid out in their statements the steps and initiatives that will hopefully pave the way towards an increase in affordable housing investments. These span from mobilization of funds to the simplification of issuing building permits, and even to limiting the negative effects from the increasing number of short-term rentals.
The Commissioner particularly expressed concerns for the increase of the number of short-term rentals. He stated that this number has almost doubled between 2018 and 2024 and that in some neighborhoods and tourism hotspots the share of short-term rentals represent up to 20% of the housing stock.
‘Our ambition to have specific efforts in stressed housing areas will unfold when we put forward our Affordable Housing Act,’ the Commissioner explained, responding to a journalist’s question, and added that the Act is ‘a combination of us dealing with short-term rentals specifically but also a broader set of tools the member states can use in order for them to actually make sure that normal people with normal jobs can actually live where they serve.’
During his statement at the Press conference, Jorgensen explained that the upcoming Affordable Housing Act will give local authorities a series of tools to limit the negative effects of short-term rentals in areas under housing stress, along with measures for fostering affordable housing in these areas.
Jorgensen also stated that another aspect of the housing crisis throughout the EU is the increase of house prices by over 60% since 2013, while average rents have risen by around 20%.
The Commissioner highlighted the importance of the simplification of bureaucracy for new housing and renovation permits, to accelerate the process for new constructions and renovations on existing buildings. Responding to the question on initiatives that may produce more investments in affordable housing, Jorgensen said that a ‘pan-European investment platform will make it possible for different actors in the market to work together and mobilize financing.’
During his initial statement, Jorgensen referred to some initiatives on the investment side, saying that pound 10 billion euro will be additionally mobilised from the EU budget this year, adding that financial institutions have pledged to mobilize pound 375 billion by 2029.
He also spoke of the state aid aspects, saying that ‘state aid rules were quite rigid and we’ve changed them so it’s possible for member states to support housing in a broader sense. This I think is an extremely important step and it’s been well received by many member states.’
‘In Europe we want a housing policy which puts people before profit, social inclusion and well-being before money-making,’ Jorgensen stated, stressing the ‘Brussels alone won’t be able to solve this crisis,’ and announcing the launch of the European Housing Alliance. ‘I want housing experts from member states, regions, cities, stakeholders and local communities not just to be heard but to shape the future of housing together,’ he said.
Incentives and cooperation between the public and private sectors key in tackling housing crisis, Ioannou says
Minister Ioannou, who chaired the Meeting’s sessions on Tuesday, stated that the discussions focused on the urgent need to increase housing supply. He noted that the decline in housing investment across Europe is driven by rising construction costs, high interest rates and economic uncertainty and added that ‘addressing these imbalances requires targeted policy interventions, stronger incentives and closer cooperation between the public and private sectors.’
He also highlighted the need to address ‘administrative complexity which continues to delay new developments and renovations,’ as he said, clarifying that ‘simplification does not mean deregulation.’
Ioannou welcomed “initiatives at the European level aimed at enhancing coordination and unlocking new financial opportunities,” highlighting the importance of mobilising investment in the housing sector.
Nevertheless, responding to a journalist’s question on ways to increase investments in housing, Ioannou noted that, beyond the European Commission’s initiatives, it is a member state responsibility to come up with individual plans for affordable housing. ‘By changing the state rules and other measures that are put forward we are provided with the tools to make it more attractive,’ he explained.
Ioannou, said that the meeting’s discussions offered the opportunity for exchanging views and best practices. He even referred to Estonia’s example, with the full digitalization of the permit issuing process. ‘At the end of the day by simplifying the permitting process you are reducing administrative costs thus making it more attractive for the private sector to invest because they save on time and cost,’ he said.
The Minister also spoke in his statement about innovative construction methods, such as modular and off-site building, along with digital tools, like building information modeling, saying that they can significantly accelerate housing delivery, reduce costs and improve transparency. ‘At the same time, investing in sustainable construction materials and integrating circular economy principles are essential to meet our climate goals,’ he noted.
Asked whether there has been any positive feedback from the industry so far, Ioannou said that it is still too soon to tell. ‘The European affordable housing plan was announced six months ago and countries are now adjusting their own housing plans,’ he said, but referred to an example from a housing scheme in Cyprus, saying that it is currently very successful and nearly 3,000 are anticipated to be added to the housing stock in the next two years.