European housing crisis: Left out in the cold

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Homelessness among young people is a genuine risk faced by too many Europeans. [linmtheu/Flickr]

Homelessness is on the rise, and people at risk of poverty face growing difficulties in getting and keeping housing, write Ruth Owen and Marc Uhry.

Ruth Owen is a policy coordinator at the European Federation of National Organisations Working with the Homeless (FEANTSA) and Marc Uhry is Head of Europe at the Fondation Abbé Pierre.

On 19 November, the Fondation Abbé Pierre and FEANTSA published an ‘Overview of Housing Exclusion in Europe’. It makes for a sobering read. House prices have grown faster than incomes in almost all EU member states since 2000. Even the bursting of housing bubbles post-2008 has not brought price to income ratios back in line with historical averages.

Overall, the housing situation of people at risk of poverty is deeply worrying. Affordability, overcrowding, fuel poverty, physical housing conditions; homelessness, location issues and vulnerability vary considerably across the continent. Whilst each member state has specific housing challenges, the bottom line is that those living below the poverty threshold face increasing difficulty in getting and keeping housing.

The report uses EUSILC data, which until now has been underexploited as a means of understanding housing exclusion in Europe. It also draws on national homelessness statistics. The data reveals a troubling picture.

Poor people in the EU spend an average 40% of their disposable income on housing. This is twice as much as the rest of the population. Countries that have undergone Troika-imposed austerity – Greece, Portugal, Ireland and Spain – have seen the proportion of income consumed by housing costs shoot up dramatically.

Spending more than 40% of disposable household income on housing is known as ‘housing cost overburden’. Above this threshold, the stability and well-being of the household is generally considered to be at risk. Depending on the country, poor people are four to 20 times more likely to experience this than others.

In Greece, almost a quarter of households are at risk of poverty. 90% of these face housing cost overburden. Overall, 11% of the EU’s population faces housing cost overburden. This is simply not a sustainable situation.

As winter begins, it is alarming to note that 10% of the EU’s population is unable to maintain a comfortable temperature in their home. Amongst households at risk of poverty, the proportion varies from 70% in Bulgaria to 3% in Finland. Increasing fuel poverty illustrates the impossible choices facing a growing section of society in many contexts – choices such as whether to pay the bills or the rent.

National statistics suggest that homelessness is increasing in an overwhelming majority of member states. There is a lack of reliable data, making it impossible to estimate exactly how many people are homeless in Europe. Indeed, many countries appear to seriously under-estimate homelessness. However, we know enough to discern that homelessness is a persistent and growing problem in most countries.

One particularly worrying pattern for the future is that young people are disproportionately affected by housing exclusion in most countries. This is an exclusion time bomb. If young people cannot make a successful transition to adulthood, there are huge implications for their education, employment and overall prospects.

Excluding young people from housing now risks creating a “locked out” generation. Yet many countries are going in the wrong direction and introducing structural reforms that impact particularly on young people’s capacity to access and maintain housing. For example, reducing young people’s entitlements to housing allowances and other benefits.

Since the crisis, concern amongst policymakers about the macroeconomic risks associated with housing market imbalances has intensified. For example, the Commission now monitors house price changes and issues recommendations to member states on managing their housing markets. Yet, the actual housing situation of Europe’s population receives much less attention. This urgently needs to change.

The member states and the institutions identified housing cost overburden as a “social trend to watch” in the framework of the 2015 European Semester. Now is the time to take stock and work together to find solutions.

There is nothing inevitable about housing exclusion or homelessness. Member states can learn a great deal from one another about how to protect and promote the right to housing through well-designed policies. Finland, for example has made huge progress in tackling long-term homelessness through an ambitious strategy.

The scope for innovation is enormous. One in six houses in the EU is not a home because it is vacant or a holiday residence. With a bit of creativity, this stock might be activated to meet housing needs. For example, Ireland has started generating a “social dividend” from its bank bail-out by enabling “bad banks” to sell off non-performing real estate for social housing. 

European tools can help member states better ensure the right to housing. The EU’s structural and investment funds can make a significant contribution, for example through investing in social housing or energy efficiency measures targeting the people who need it most. European law in areas as diverse as fundamental rights, consumer protection, discrimination, free movement and asylum can be brought to bear in relation to housing.

The EU’s commitment to tackling poverty and social exclusion, its youth agenda, as well as the forthcoming urban agenda can provide policy frameworks to support concrete action to address homelessness and housing exclusion.

Solutions to Europe’s housing exclusion crisis are possible. But they require us to recognise the problem, make it a priority and mobilise the necessary political will and resources.

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