PROPOSAL 2 — Mobilise public and private investment

The Plan underlines that investment in housing has declined in many Member States and remains insufficient to meet current needs. It proposes to mobilise EU funds, national and regional funding, the European Investment Bank, public development banks and responsible private investment. The aim is to make more financial resources available for social and affordable housing, energy-efficient renovation and sustainable construction. The Plan also seeks to simplify access to funding and revise State aid rules so that public authorities can support affordable housing more effectively.

Full Reference text, excerpt from the European Affordable Housing Plan:

Overall investment in housing supply, including both public and private funding, has declined, in many Member States and remains below the levels needed to boost housing supply. This can be traced back to diminished investment from several key sources such as households, banks and public budgets. Several factors are at play: less public funding available following the great financial crisis, rising land and construction costs, tighter lending conditions. To generate the investment needed to meet the housing gap over the next decade, it will be essential to mobilise more public and private investments.

The EU is supporting this objective by already mobilising at least EUR 43 billion housing related investment under the current Multiannual Financial Framework (MFF) through Cohesion Policy Funds, InvestEU, LIFE, the Single Market Programme and Horizon Europe as well as through NextGenerationEU.

Looking ahead, the Social Climate Fund will finance investments for energy efficiency and building renovation and clean heating and cooling.

But more can and is being done. The mid-term review (MTR) Cohesion policy Regulation now, allows Member States and regions to allocate funding for affordable housing on top of the EUR,10.4 billion already planned for energy efficiency and social housing, while also providing them with flexibilities and financial incentives when reprogramming funds towards housing. These

regulatory flexibilities and the possibility for a higher Union co-financing rate for housing investments will remain in place until 2029-2030, which will facilitate further re-programming in the coming years. Finally, a new financial instrument model will help leverage Cohesion policy funding with other resources.

New funding possibilities will be unlocked in the next long-term EU budget for 2028-2034. In particular, the future National and Regional Partnership Plans include social and affordable housing as one of their specific objectives, allowing Member States to address their specific challenges with housing related investments and reforms. The EU Facility also contributes to social and affordable housing while Erasmus+ can provide housing support to students to facilitate and increase access to mobility, volunteering and learning. Moreover, the European Competitiveness Fund includes social infrastructures among its general objectives and it enables supporting the decarbonisation of buildings.

As well as enhanced support at EU level, Member States must also step up investment. That is why the Commission is making it easier for Member States to financially support affordable housing via the revision of State aid rules set out below.

To mobilise investments in housing supply, a broad coalition of financial actors is essential. The European Investment Bank (EIB) is advancing this through its Action Plan for Affordable and Sustainable Housing. National and regional promotional banks and other international financial institutions, such as the European Bank for Reconstruction and Development (EBRD) and the Council of Europe Development Bank (CEB), play a critical role in mobilising public and private capital and providing advisory support. Developing and reinforcing scalable, innovative financing models building on successful examples like revolving funds will further help build synergies between public and private capital.

• Question for participants: Should the EU prioritise large-scale investment tools for social and affordable housing, combining public funds and responsible private investment?

• Open question for comments: What practical changes (for example to procedures, eligibility rules or coordination between authorities) would make public support for social and affordable housing faster and easier to access?