ELTI Position Paper: Promoting Long-Term Investment in Affordable, Social, and Sustainable Housing in Europe: The Role of National Promotional Banks and Institutions
The paper highlights the role of National Promotional Banks and Institutions (NPBIs) in addressing Europe's housing crisis by promoting investment in affordable, social, and sustainable housing. In 2023, these banks financed nearly €50 billion, supporting over 380,000 dwellings.
Along with this position paper, ELTI has also presented its experience in housing in a common brochure with the sister association European Association of Public Banks (EAPB).
Against this background and in line with the principles enshrined in ELTI’s “Strategic Outlook” for the next Multiannual Financial Framework, six key policy recommendations are proposed for future EU housing initiatives:
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Leverage NPBIs for EU Fund Delivery: European funds should be channeled through NPBIs to enhance coordination and efficiency, following models like France's “one-stop-shop” and Poland’s intermediated approach with the EIB.
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Expand InvestEU Support: Affordable housing should benefit more from InvestEU through increased funding, expanded guarantees, and simplified reporting to attract investment.
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Establish Pan-European Solutions: Create pan-European tools like funds of funds and public-private partnerships that utilize NPBIs' local networks and attract private investment, requiring some regulatory changes (e.g., Solvency II adjustments).
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Combine Grants with Financing: Strengthen the use of blended financing (grants and loans) under cohesion policy to maximize investment impact and adapt to local needs.
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Promote Industrialized Construction: Focus on innovative, industrialized building methods to improve affordability, efficiency, and sustainability, with NPBIs supporting SMEs and construction innovation.
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Adapt State Aid Rules: Revise EU state aid rules to better accommodate the specific needs of the affordable housing sector and avoid unintended investment constraints.