A study commissioned by EFA proposes an index to identify where housing stress exists, which factors may be contributing to it, and what type of response might be the most appropriate in each case
The European Free Alliance presents a study on Housing Stressed Areas that would help the EU Commission to better implement its Affordable Housing Act (AHA) territorially. Developed by Professor Luis Manuel Sanmartín Cava – Professor at the Pompeu Fabra University in Barcelona – the study proposes a methodology to identify Housing Stressed Areas in the EU, improving the identification of the areas where the policies addressed in the AHA should be implemented.
The proposed European Housing Stress Index (EHSI) allows for territorial adaptability to local conditions and identifies which factors may be contributing to it. This way, it eases the identification of the most appropriate response in each case, in a comparable, territorially sensitive way. The EHSI learns from systems that have already attempted to territorialise housing stress, comparing the cases of France, Germany, Scotland, Ireland, and Spain. It is based on three dimensions: affordability, availability, and structural pressures, which include tourism and short-term rentals, student demand, islandness, metropolitan concentration, and cross-border or housing-related labour market pressures.
A diagnostic framework to frame territorial needs
The result is a diagnostic framework, rather than a simple mathematical formula, as the one proposed by the European Commission in the AHA. The Commission proposes a cumulative test for identifying an area under housing stress, which is a mathematical formula that develops a fixed threshold. “The draft regulation itself does not explain why the specific cut-off is set at 8 rather than 7 or 9. The empirical justification becomes particularly important, especially for areas that fall just above or below the threshold. Any specific restrictions are subject to an additional assessment of necessity and proportionality”, said Professor Sanmartín Cava.
For this reason, the development of a more comprehensive methodology for identifying Housing Stressed Areas operates at a complementary level to the AHA, which focuses mainly on policies that could be applied in those areas. The adoption of the EHSI as the method of identifying Housing Stressed Areas would help overcome the main weaknesses of the Commission’s proposal. It would not trigger the same measures everywhere but enable interventions to address the specific indicators of housing stress and their severity in different territories.
Reverse the tendency
“Housing is one of the most pressing issues in the European Union today”, said EFA Vice-President Livia Volpei. “Citizens need to spend every time more in having a place to live, making our purchasing power lower and lower. The reasons why this happens may be different in each territory. This is why EFA wanted to commission a study to develop tools to reverse this tendency. Measures need to be taken, we cannot continue like this”, she added.
The study “Europe Under Housing Stress. Housing-Stressed Areas in Europe: Comparative Approaches and a Proposal for a European Housing Stress Index” is now available on the EFA website. It will also be publicly presented at an event in Brussels before the end of the year.
Commission’s Affordable Housing Act risks putting investors before people
The European Commission’s Affordable Housing Act, published yesterday, is intended to respond to Europe’s growing housing crisis. However, EFA considers that the proposal does not go far enough to address the scale and urgency of the challenges facing people across Europe. While the Act seeks to provide greater legal certainty around housing-related measures, it places too much emphasis on market functioning and not enough on ensuring access to affordable, decent and secure housing.
EFA therefore calls for a more ambitious approach that addresses the structural drivers of the housing crisis, including rising rents and housing costs, speculation and the financialisation of housing. The Act should also protect the capacity of municipalities to regulate short-term rentals, reinforce public and non-profit housing, and ensure that public investment benefits people and communities rather than contributing to property speculation.
Commenting on the proposal, Oriol Cases, Secretary General of EFA, said: “This is a regulation with good intentions, but in practice it makes it extremely difficult for public authorities to regulate. The inclusion of the concept of areas under housing pressure is good news, but the requirements for designating such areas are highly complex. In practice, this could make it impossible for medium-sized and smaller municipalities to obtain this designation. EFA’s methodology proposal would allow for territorial adaptability and to overcome these methodological weaknesses”.