Affordable Housing Initiative: shaping the future of housing in the EU?

The Renovation Wave Strategy, an EU driven project under the European Green Deal, has ambitions to double the annual energy renovation rate of buildings by 2030, to foster deep renovations, and to create 160 000 jobs in the construction sector.

How this goal can be achieved?

Affordable Housing Initiative (AHI), which evolved under the scope of the Renovation Wave Strategy, should contribute to the fulfilment of the goals that the EU sets for the renovation of its building stock in the upcoming years. The initiative is led by The European Commission Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) – Directorate for Industrial Policy and Innovation. The key objective of the AHI is to pilot renovation of 100 lighthouse social and affordable housing districts that shall:

The implementation of the AHI shall demonstrate the potential for replication beyond the 100 lighthouse districts. Successful implementation is expected to support creation of energy efficient and qualitative (social) housing districts and more jobs in the construction sector. It shall deliver further blueprints for local industrial cooperation between the construction SMEs, social housing companies, public authorities and other relevant stakeholders in the process. In the European Commission's Renovation Strategy Communication, the AHI is introduced in order to examine whether and how the EU budget resources alongside the EU emission Trading System revenues could be used to fund national energy efficiency and saving schemes targeting lower-income populations.

What comes next?

The AHI will be accompanied by creation of partnership between the EU and local level renovation projects in order to support them with necessary technical capacity and funding, and to activate the industry and research to push innovative solutions targeting especially social housing. The planned partnership should attract all relevant stakeholders from construction sector, social housing, cultural associations, public authorities, financial institutions and investors, inhabitants and owners themselves to cooperate to better define the needs on local level and the needed support from the EU.

Our Homes, Our Deal

Housing Europe has introduced a new initiative called Our Homes, Our Deal to benchmark the work done within the public, cooperative and social housing sector on building and renovating homes in an energy and resource efficient way. They identify six essential features for renovation by which they attempt to ensure that just energy transition and a social European Green Deal are brought to the reality.

In their efforts, Housing Europe responds to the proposed AHI by preparing sets of suggestions for the selection process of the districts where this initiative will be implemented. European-wide call for district renovation projects should be opened for at least 6 months to collect a variety of project proposals covering different localities, mirroring different challenges to be addressed. They encourage relevant groups of stakeholders with social, cooperative and public housing providers to take a lead here and act as a leading force. Then, the decision-making committee made of representatives of the European Commission and independent experts should be deciding on what projects to include in AHI.

In their efforts to influence these EU initiatives, Housing Europe proposes to create AHI Steering Group and invites representatives of the European Commission, European Investment Bank, social, cooperative and public housing, construction sector and cities, to act together as a sounding board for better policy making at EU level.

Initial concerns about the AHI

The main challenge connected to the realization of the AHI is connected with its funding. For now, there is no extra funding available to be used for the selected 100 lighthouse districts. The Member States are expected to work with the resources that are already available and come up with proposals that use the available and existing financing opportunities.

This critique goes even beyond the AHI and it has been many times raised that the European Green Deal, and especially its Renovation Wave Strategy prepared a policy direction to the Member States but only in advising for re-allocation of available funding for renovation. Even though there are good policy developments coming out on the level of the European Union, the implementation on national level remains the biggest obstacle.

Housing Europe further criticizes the funding streams outlined by the European Commission (Technical Support Instrument, Resilience and Recovery Facility, Modernization Fund, REACT-EU, ERDF and ESF) for not being sufficient to deliver the AHI. Housing Europe calculated that for realization of the AHI, approximately 6 billion EUR would be needed (based on assumption that it takes 60.000 EUR per housing unit). They emphasize that the EU should support 100% of the AHI costs and that the EIB should cover 50% with repayable loans.

Online meeting to discuss the AHI

Housing Solutions Platform organized an online meeting between the European Commission and NGOs, civil society organizations, and the Council of Europe Development Bank (CEB) to discuss the development of the AHI.

Sorcha Edwards (Housing Europe) underlined in the introduction the importance of taking the local reality into account when shaping the Renovation Wave and connected initiatives. Oceane Peiffer-Smadja and Karel Vanderpoorten (DG GROW) presented the key objectives of the AHI and its aim to follow the district-level approach. They also talked about the funding possibilities for implementing the AHI, again explaining that rather than delivering further funding for renovation, they plan to facilitate the access to existing EU financial resources.

"DG GROW is looking to support social enterprises and cooperatives and to promote these forms of enterprises especially in Central and Eastern Europe where they are not very common."

Samir Kulenovic (Council of Europe Development Bank) together with an independent consultant Hans-Joachim Dubel talked about what makes the AHI truly social initiative and they underlined the need for EU strategy to provide housing for people with low income.

To add, Katarzyna Przybylska from Habitat for Humanity Poland outlined the situation in Poland where 14% of citizens live in substandard housing. Representatives from Habitat for Humanity International had been invited, too, to contribute to the discussion with our specific perspective on housing issues in CEE region and we very much appreciate for being included in the conversation.

Gyorgy Sumeghy and Besim Nebiu from Habitat for Humanity equally spoke about the housing context in Central and Eastern Europe and underlined how important it was to see the differences in the housing systems in the three macro-regions of Europe (Northern, Southern and Central-Eastern Europe). In Central and Eastern Europe, there are major issues with energy poverty for people living in multi-unit residential buildings. Furthermore, targeted subsidies for low-income households and social housing are lacking. The speakers expressed that EU policy should not principally focus on social housing, or at least not in Central and Eastern Europe, as the housing reality there is different. The mass privatization in the 1990s resulted in owner-occupation rates from 80 to over 90%. Hence, the homeowners' decision making on building maintenance and the improvement of common spaces is key.

We are eager to see the next steps of the development of the AHI and we hope to see positive steps that include the most vulnerable groups, such as low-income households, in this initiative.

Find more information in this article summarizing the City of Vienna's webinar about the AHI, including valuable views and opinions of several EU housing experts.

Find more information about the AHI in policy note by EuroCities here.

Find more information about Housing Europe's Our homes, our deal initiative here.

Find more about the Housing Solutions Platform meeting on AHI here

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