The European Commission will propose this Tuesday, 16th, a relief in the European Union’s state aid rules and limits on local accommodation to promote access to affordable housing in the community space, with Lisbon being one of the most pressured community cities.
Due to the severe housing crisis in the European Union (EU), the European Commission will present today a European Plan for Affordable Housing aimed at complementing housing policies at national, regional and local level, while maintaining the principle of subsidiarity, as this is a competence of the Member States.
Presented on the sidelines of the European Parliament’s plenary session in the French city of Strasbourg, this European housing package includes an EU plan for affordable housing, a proposal to review state aid rules on services of general economic interest, a new European Bauhaus program and a new strategy for housing construction.
The plan will therefore include financing (namely through the EU budget and the European Investment Bank), state aid (which will now be allowed to countries as long as it is for affordable housing) and limits on local accommodation (in the form of a legal initiative to resolve outstanding issues, as announced by the President of the European Commission, Ursula von der Leyen, in her State of the Union speech).
The European Union is facing a housing crisis, in countries like Portugal, where house prices and rents have increased significantly, making it difficult to access affordable housing, especially for young people and low-income families.
EU house prices have increased by an average of up to 60% since 2015, with some Member States recording increases of over 200%, while rent prices and energy costs have also continued to rise.
However, residential building permits have declined by about 22% since 2011.
Portugal is one of the EU countries that has been recording double-digit annual growth rates in house prices, driven by strong demand and limited supply.
Housing currently accounts for almost a fifth of average EU household income and around one in 10 people say they are unable to pay their rent or mortgage on time.
Also throughout the EU, in some places, local accommodation represents up to 20% of the housing stock, after having grown by more than 90% in the last 10 years.
In large European cities, the pressure is even greater as one in 10 urban residents spends more than 40% of their income on housing.
Apartments in the centers of the main European cities are, therefore, becoming increasingly unaffordable and this is the case in Lisbon.
EU data reveals that the ratio between salary and income in Lisbon is 116%, which means that an average income alone is not enough to rent an apartment in the Portuguese capital.