The European Commission presented yesterday a comprehensive plan aimed at expanding housing supply, mobilising large-scale investment, addressing distortions caused by short-term rentals, and supporting the social groups most severely affected by the housing crisis.
Structural Supply Shortages and Investment Needs
According to European Commission estimates, Europe will require approximately 650,000 additional housing units per year over the next decade, beyond current construction levels, to close the widening gap between supply and demand—particularly in high-pressure urban areas. The cost of meeting this additional demand is estimated at around €150 billion annually.
Increasing housing supply will not rely solely on new construction. It will also involve the conversion of existing buildings to residential use and the renovation of the current housing stock, with a focus on improving energy efficiency and overall living conditions.
Within this framework, the Commission is advancing a European Housing Construction Strategy designed to enhance productivity in the construction sector through modern construction techniques, digitalisation, circular economy principles, and improved access to skilled labour.
Regulatory Simplification and Revised State Aid Rules
A key constraint on housing supply remains excessive bureaucracy in spatial planning, permitting, and urban planning regulations. To address this, the Commission intends to introduce a new EU-level simplification package, while working closely with national and local authorities to streamline administrative procedures.
Equally significant is the revision of state aid rules for Services of General Economic Interest (SGEI). Under the updated framework, Member States may now more easily support not only social housing, but also affordable housing for low- and middle-income households, without prior approval from the Commission.
Financing Instruments and Investment Platforms
Under the current Multiannual Financial Framework (2021–2027), the EU has already mobilised at least €43 billion for housing-related initiatives. Funding sources include the Recovery and Resilience Facility, Cohesion Policy funds, InvestEU, the LIFE programme, and Horizon Europe.
In parallel, the Commission is establishing a Pan-European Investment Platform, in cooperation with the European Investment Bank and national development banks, to scale up investment in social, affordable, and sustainable housing. National development banks have also committed to investments of up to €375 billion by 2029.
Regulating Short-Term Rentals and Curbing Speculation
The rapid expansion of short-term rentals—almost 93% between 2018 and 2024—has significantly reduced housing availability for permanent residents in many cities. The Short-Term Rentals Regulation, which will enter into force in May 2026, introduces mandatory host registration and systematic data sharing between digital platforms and national authorities, thereby strengthening market transparency.
On the basis of these data, the Commission plans to present a new legislative initiative in 2026 aimed at establishing a coherent EU-wide framework for short-term rentals. This framework will enable local and regional authorities to adopt targeted measures in areas under housing pressure, including spatial or temporal restrictions on short-term rentals, particularly where such activity is conducted on a professional basis.
Targeted Support for Young People, Students, and Vulnerable Groups
Special emphasis is placed on young people, students, and low-income workers. Planned measures include strengthening student housing provision, piloting innovative housing models through Erasmus+, and exploring guarantee schemes to reduce rental security deposit requirements.
The Greek Housing Policy Package: National Measures Aligned with European Priorities
Within the context of the parliamentary debate on the adoption of the national Budget, the Prime Minister announced a new housing policy package that aligns with European policy priorities while addressing Greece’s specific challenges.
In Greece, the housing crisis is increasingly concentrated in urban centres—particularly Athens and Thessaloniki—where rental prices have risen sharply and the imbalance between supply and demand has become a defining feature of everyday life.
Key Measures Announced
Large-Scale Housing Renovation Programme
A €400 million programme covering up to 90% of renovation and upgrading costs for vacant or ageing housing units, with subsidies of up to €36,000 per dwelling. The programme aims to reactivate inactive housing stock and increase overall housing supply. A limited share will also apply to owner-occupied dwellings. Eligible works include general renovations and mild energy-efficiency upgrades. The income threshold is set at €35,000 for couples, with an additional €5,000 per child.
Annual Refund of Two Months’ Rent for Key Public Service Workers
Teachers, nurses, and doctors working outside the metropolitan areas of Attica and Thessaloniki will be eligible for an annual refund equivalent to two months’ rent, irrespective of income, as an incentive to remain in these regions.
Local Programmes for the Conversion of Public Buildings
Targeted local programmes will support the upgrading and conversion of municipal and state-owned buildings in mountainous and island regions, with the aim of increasing housing availability for public sector employees. Regional authorities and municipalities will implement the programmes, with 1.5% of each regional programme’s budget earmarked for this purpose.
Stricter Regulation of Short-Term Rentals
Building on existing restrictions in central districts of Athens, the government will extend stricter controls on short-term rentals to other cities, including Thessaloniki, in order to rebalance housing use between tourism and permanent residence.
In designated areas where new short-term rentals are prohibited, properties transferred to new owners will be automatically removed from the short-term rental registry and may thereafter be leased only on a long-term basis.
Incentives for Investment in Affordable Rental Housing
The forthcoming legislation will introduce targeted tax incentives for investments that convert abandoned or unfinished buildings into rental housing for a minimum period of ten years, subject to rent ceilings set by the state. Construction companies undertaking such projects will benefit from the deductibility of rental income from corporate income tax, aligning private investment with social objectives.
Fast-Track Change of Use
Finally, the Ministry of Environment will introduce new planning provisions enabling the rapid conversion of existing non-residential properties into housing.
