ELTI Brochure on Addressing the Housing Crisis

Released in April 2025, this ELTI-EAPB brochure provides a response to the European Housing crisis.

Preface

National promotional banks and institutions (NPBIs) play a vital role in mobilising capital for sustainable growth. Typically, NPBIs are designed to provide financial support to national, regional or local policy objectives. Their unique status allows them to leverage on public funds to stimulate public and private long-term investments in sectors that are neglected by traditional financing, such as those addressing social and environmental challenges and promoting innovation.

Housing is an essential need for every citizen; it is a prerequisite for social cohesion, helping to build communities that are resistant to social, economic and geographic fragmentation. The market failure in financing housing projects extends well beyond what have traditionally been called marginalised or disadvantaged citizens: while many individuals are able to cover their own living expenses, nowadays, there is a growing need to support more vulnerable families and individuals all over Europe. Various socio-economic challenges have amplified this need, including:

• Rising property prices: property prices have surged, especially in urban agglomerations where \n employment opportunities are concentrated. This creates significant challenges for young families trying to purchase homes and for students and early-career workers seeking affordable, conveniently located housing options. Adding to the problem, a lack of investment in social housing across Member States disproportionately affects the most vulnerable segments of population;
• Demography: an aging population across Europe has created a growing demand for housing solutions tailored to seniors, including accessible housing and care facilities;
• Energy costs and efficiency: energy prices are significantly higher than five years ago, leaving many people unable to afford adequate heating or energy resources. Moreover, outdated housing stock often requires substantial renovations to improve energy efficiency and reduce environmental impact. The consequent “renovation wave” will require long-term financing and investment.

Each EU Member State addresses these challenges through different public financing support structures, coordinated either at the national or regional/local level. The overall common challenge for Europe is the need to cover a high number of individual cases (dwellings, apartments, etc.) with limited public funding available for each project.

Promotional banks at national and regional level have been key players in bridging the market gap in housing financing by providing public support for housing for decades as well as through specialised advice on social and affordable housing topics linked to investment in the sector. They are well placed to do so thanks to their detailed knowledge of local markets, longstanding connections to public authorities and private investors, as well as their financing expertise, able to maximise the impact of public resources. In 2023 promotional banks at national and regional level promoted more than 380.000 dwellings and committed financing of close to €50 billion.

This brochure presents a variety of projects in different Member States, showcasing how Promotional Banks and Institutions have addressed specific needs and established tailored support structures. I trust these examples will offer you valuable insight into addressing housing challenges through innovative financing structures and mutual collaboration within our Associations, to foster new social housing approaches in our ountries. Looking ahead, it is imperative to preserve successful financing approaches and structures, while recognizing the need for greater financial capacity across Europe. By working together, we can enhance our impact and ensure that every citizen has access to safe, affordable, and sustainable housing.

Together we can do more!