Over the past years, Europe has endured a whirlwind of economic, social, and political shifts. The Maltese and European household is facing several challenges.
We have witnessed the rising cost of living, whereby the cost of food, energy, and other essentials that is putting pressure on household budgets. On top of that, the number of lower paid jobs is increasing, which means people will continue renting instead of buying their own property. Moreover, the spectre of rising interest rates, as recently noted by the European Central Bank, casts a long shadow, particularly on first-time house buyers and current mortgage holders.
As MEPs, we cannot just be spectators. We need to understand the causes and act upon them. European citizens expect us to collaborate between us and our national counterparts, to find solutions. Although it’s imperative that we solve these issues, we need to understand how housing markets function in different EU member states and beyond, to avoid making structural mistakes.
Talking about major causes of rising rents and costs, housing experts from across the EU, state categorically that the core of the European housing challenge is succinctly captured in the supply-demand imbalances in different member states, and more specifically in different regions. Moreover, several studies point towards barriers to building new homes across the EU, including planning restrictions, high land costs, and a shortage of skilled labour.
European green measures have been increasingly integrated into the housing landscape and these could also be adding pressure on housing supply and costs. Although initiatives to ensure all existing and new homes become carbon-neutral are well intentioned, we need to ensure these do not inadvertently place additional burdens on the most vulnerable tenants.
These social and housing challenges are European issues, even though they have always been tackled at national level.
That is where the S&D Group could play a major role in pushing forward a European social agenda, including housing for all. European citizens, especially young people, are struggling to find decent homes and to deal with basic living costs. Housing-related expenses, such as rents, mortgages and utilities are increasing much faster than income growth and that is where we need to work on a European approach for decent housing for all generations, regions, and localities.
Following the State of the Union speech by European Commission President Ursula von der Leyen, I believe the Commission is not focused enough on the social and housing pillar. As S&D, we need to have more answers from the European Commission on how the EU will balance its target of having more energy efficient buildings with social support and economic growth in the years to come.
Our objective as S&D should be to help reduce these challenges for all Europeans, especially those most vulnerable, while ensuring a cleaner and affordable European housing sector. To truly harness this potential, however, collaboration is key. From businesses, which can channel investments into housing projects, to universities that can provide research on sustainable housing, and NGOs that can ensure grassroots needs are met – a concerted effort can yield sustainable solutions for a continuous supply of housing in proportion to the population increases in different localities and regions.
The housing crisis is a complex national subject that requires a multi-dimensional approach. Different national governments should involve a range of stakeholders in the debate. I cannot miss the fact that the governing Labour Party in Malta adopted several initiatives to support the demand for housing.
Expenditure by the Housing Authority increased fivefold in the last 10 years, from €11.6 million to €53.5 million. This allowed for the introduction of several new schemes which promoted home ownership – the Equity Sharing Scheme, the 10% Deposit Scheme and the Subsidy on Loan Scheme. The Labour government increased social assistance to tenants too. Priority has also been given to affordable housing with the recent creation of an Affordable Housing Foundation in partnership with the Archdiocese of Malta.
The European Parliament in collaboration with other European and national institutions should be a major catalyst to push forward an agenda that addresses the social challenges associated with housing markets. These steps could include increasing the affordable housing supply by building more social housing and provide financial assistance to first-time buyers while combatting homelessness across the EU.
Moreover, we should look at how different governments can collaborate to introduce minimal European letting standards, reform planning systems, regulate the short-term letting market, and reduce land costs to minimize the barriers to building new housing stock.
These European and national policy moves would ultimately translate into more affordable housing for people in need.
The dream of homeownership, once a rite of passage in life, now appears elusive for many Europeans, especially amidst the spectre of stagnant or even declining wages across different regions.
To decode the European housing market is to navigate a maze of contradictions. On one hand, there’s promise – the potential of a greener, more sustainable housing landscape, and on the other, there are daunting challenges, particularly for first-time buyers and mortgage holders.
However, with balanced European and national policies that support both those in need and incentivise investors, the EU and its member states can redefine the housing future. Every citizen in Malta, Germany, Poland or any other member state, deserves a place they can truly call home regardless of their circumstances.