The difficulty in accessing affordable housing has become one of Europe’s major urban and social challenges. That is why European institutions are seeking new tools to address this situation. In this context, the European Commission has presented the Affordable Housing Act, a proposed regulation aimed at establishing a common framework so that Member States can adopt measures to protect the availability of and access to housing in areas where there is particular pressure on the residential market.
It was published on September 9 and builds on the objectives of the European Affordable Housing Plan, which was adopted in December 2025. The legislative initiative does not aim to establish a single housing policy for all of Europe; rather, its purpose is to establish a common framework that allows for the justification, implementation, and review of specific measures when residential market conditions so require.
This initiative is also part of the New European Bauhaus, the European Union’s initiative that promotes more sustainable, inclusive, and higher-quality built environments. In fact, the European Plan for Affordable Housing explicitly states that increasing the housing supply must combine affordability, sustainability, and architectural quality, promoting innovative solutions, new construction techniques, and models that contribute to improving people’s well-being and the quality of living spaces. In this sense, affordable housing is not only a matter of economic access but also an opportunity to move toward more livable, resilient, and cohesive cities and neighborhoods.
To develop the plan, the European Commission conducted a public consultation process in which citizens, experts, and authorities participated, allowing them to assess the housing crisis based on their own experiences.
One of the central elements of the document is the creation of a common methodology for identifying so-called “areas under housing stress”—that is, areas where there is significant pressure on the residential market as a result of an imbalance between supply and demand. To determine whether an area can be considered under housing stress, the regulation establishes various criteria, such as analyzing the ratio of housing prices to per capita net income. This ratio must be equal to or greater than eight, meaning that the representative price of a home would be equivalent to at least eight years of net income.
Furthermore, a forward-looking dimension is incorporated: there must be a forecast that, without the implementation of a specific measure, the housing market strain will not abate over the next three years, taking into account factors such as demographic trends and housing supply and demand. Thus, the identification of a strained area would depend not only on current prices but also on market outlooks.
Areas for Action
Once an area under residential pressure has been identified, the proposal establishes a framework for authorities to intervene regarding certain housing uses. One of these is short-term rentals. Authorities may implement measures to restrict access to or the provision of such rentals when there is evidence that they are negatively affecting the availability and affordability of housing. The proposal also addresses housing units that have been vacant for extended periods. Throughout, the rationale behind the initiative is to link any restrictive measure to a specific market situation and to evidence demonstrating its necessity.
For its part, the Affordable Housing Act is accompanied by a recommendation addressed to the relevant authorities to help increase the housing supply. Thus, the European initiative does not focus solely on regulating certain uses of real estate but also addresses the need to increase the availability of housing. Among the measures it cites are the change in use of existing properties and the implementation of density bonuses, which allow developers to build more residential units on the condition that they allocate a certain percentage to social or affordable housing.
The European Commission itself identifies insufficient supply as one of the main structural factors behind difficulties in accessing housing. At the same time, it notes that certain uses of real estate can increase pressure on the availability of primary residences.
Next Steps
Thus, the proposal opens a new chapter in the European debate on housing: establishing a common framework to identify areas under pressure and ensuring that the measures adopted in those areas are data-driven, proportionate, and subject to periodic review. Rather than prescribing a single solution, the approach offers common rules so that each region can act in accordance with its own specific circumstances and characteristics, within the legal framework of the European Union.
