Europe’s housing crisis: Time to build a better future

Remember when a home was more than just an investment? When housing was the foundation of security, opportunity, and community? Across Europe, millions are longing for that reality to return—a future where housing is not a commodity but the backbone of thriving, inclusive cities.

Today, Europe’s housing crisis is not just about affordability—it’s a systemic risk. When homeownership and rent become unattainable, social trust erodes, inequality deepens, and economic stability falters. At a time when Europe must act with unity in an increasingly volatile world, this crisis threatens to pull us apart.

The cost-of-living crisis is forcing people to make impossible choices. Rising housing costs, stagnant wages, and speculative investments have turned homes into financial assets rather than places to live. 10.6% of urban Europeans now spend over 40% of their income on housing, while house prices have surged by 48% since 2010—far outpacing wage growth. This is not just an economic issue; it is a political and social emergency that demands immediate action.

Housing costs are spiraling out of control in our cities, with 10.6% of Europeans in cities spending more than 40% of their income on housing. At the same time, financialisation has deepened inequality: between 2010 and 2021, house prices in Europe rose by 48%,

The false choice: Social vs. green priorities

Europe faces a dual challenge: reducing the carbon footprint of its buildings while ensuring housing remains accessible. For too long, the construction industry has served financial markets rather than its fundamental role: creating the framework for a good life. CO₂ emissions from buildings account for about 34% of the EU's total emissions, yet efforts to decarbonise are often framed as a trade-off with affordability. That is a false choice.

We cannot afford a housing market where affordability and sustainability are in conflict. Instead of choosing between social or environmental priorities, we must align them. This means rethinking investment structures, scaling circular construction, and ensuring long-term affordability. Done right, housing can be the engine that drives both social equity and climate action.

The €4 trillion opportunity we’re ignoring

And here’s the reality: we already have the capital to make this happen. Urban regeneration projects across Europe represent a €4 trillion opportunity—yet many investors remain on the sidelines, treating this as a public-sector issue. They couldn’t be more wrong. The most transformative cities are those where private investors and developers actively collaborate with governments to build solutions, not just projects.

This isn’t just about fixing a housing crisis. It’s about reimagining our cities as engines of innovation and social mobility. A future where everyone has access to secure, affordable housing without breaking the bank—or the planet. Because when we invest in housing, we’re not just constructing buildings—we’re shaping Europe’s economic resilience, social cohesion, and ability to lead on the global stage.

Europe’s global leadership starts with housing

The current crisis presents an opportunity to position Europe as a leader in sustainable urban development. A new housing agenda could create jobs, drive economic growth, and improve quality of life—turning Europe’s cities into magnets for talent, investment, and innovation. More importantly, it would reinforce Europe’s ability to act as a stable, unified entity in an era of geopolitical uncertainty.

Strengthening Europe through housing policy is not just a moral imperative—it is a strategic necessity. A secure home is the foundation for civic engagement, economic participation, and long-term stability. Without it, inequality will widen, populism will rise, and Europe’s collective strength will weaken.

The time for action is now

The era of treating housing as just another asset class must end. We must move beyond discussion and into action—redefining housing policy as the foundation of Europe’s long-term stability and competitiveness. Because when it comes to housing, we’re not just building homes—we’re securing Europe’s future. It’s time to act.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.