Nice, 7 March 2022 – Prior to the European Housing Ministers’ meeting in Nice on 8 March, Build Europe, the trade association representing European developers and homebuilders, is alerting governments about the urgency of reviving affordable construction in view of an upcoming worsening of the housing crisis.

Access to housing for Europe’s lower and middle classes hampered by shortages and soaring prices

New housing prices are increasing dramatically in the European Union and rose by almost 10% in 2021, a sign of considerable tension between an increasingly scarce supply and an increasingly strong demand.

« Low- and middle-class households are progressively excluded from home ownership and renting, as affordable housing becomes… unaffordable» remarked Marc Pigeon, President of Build Europe. « Without a strong and prompt political decision, the current situation will only get worse, considering recent developments» he continued.

For Build Europe, the situation is clear:

  • Still marginal a few years ago, the Malthusianism of local councillors, fuelled by the ever stronger opposition of the better-housed populations to the construction of new housing, has become the general rule.
  • Even if the objective of land conservation is shared by all stakeholders, an overly radical implementation of the No Net Land Take initiative will inevitably lead to a reduction in supply and an increase in the price of land, and consequently in the price of housing.
  • Finally, the public authorities’ desire to vigorously  tackle the problem of thermal flaws is hampered by landlords’ inability to do so and, without a massive plan, will result in millions of homes in Europe being withdrawn from rental and sale.

Four policy leverages are urgently needed to prevent the crisis

In order to avoid a brutal and widespread housing crisis, European property developers and homebuilders propose to the ministers of the Member States to act on four essential policy leverages in order to revitalise the production and renovation of housing.

Programming and planning: It is natural to require policy makers to programme and plan the supply of land to meet current and future needs.  Thus, in addition to the controlled development of new areas, urban wastelands are areas whose reclamation should be accelerated by exceptional measures. As the construction of new housing requires local authorities to provide public facilities, local elected representatives must be supported in removing the obstacles to the issue of new building permits.

Fiscal policy: the tax regime applied to real estate, from its conception to its handover, is excessive and considerably increases the cost of housing. The tax burden on this essential service must be alleviated and, for example, reduced VAT rates or targeted aid must be introduced to help the development of housing affordable for both first-time buyers and renters.

Regulations: The members of Build Europe share the European environmental ambition, provided that this is not detrimental to the fulfillment of the housing needs of our fellow citizens. The last few years have been particularly prolific for the introduction of increasingly restrictive (No Net Land Take), costly (new thermal regulations, taxonomy, etc.) and sometimes useless standards. It is essential to plan a normative moratorium for the next five years to allow the entire construction sector to adapt to recent developments.

Listening and partnership: On one hand, listening to citizens who see their purchasing power steadily deteriorating and who aspire to be housed with dignity. On the other hand, the partnership with responsible and committed public and private professionals to accelerate the transition to a low-carbon economy. The French presidency of the European Union must become a key moment to relaunch new constructions and renovation at affordable prices throughout Europe.

« Together, let’s make housing a great European cause! » concluded Marc Pigeon, President of Build Europe.