The Impact of EU Policies on Housing and Urban Development

Enikő Vincze, Eva Betavatzi

According to its presentation of itself, the European Union (EU) is based on principles and values such as freedom, democracy, equality, and the rule of law, promoting peace and stability.1 Against this background, the huge inequalities, high poverty rates, and multiple cases of precarious living across and within the Member States (MS) are even more dramatic and suggest that the EU displays serious discrepancies between its declarations and the existing politics.  These discrepancies are manifested in the domain of housing, too.

Even if the competence for social and housing policies rests primarily with MS, it has to be politically acknowledged that the EU economic governance, rooted within a neoliberal political economy, has negative social effects in each country. Such a governance model disempowers the EU and MS institutions to counterbalance the consequences of the unregulated movement of capital and the financialized market. This is even more so in the case of housing because housing is both an economic and social issue; it has an exchange value and a social/use value; for some, housing is real estate, for others, it is a home; and it is referred both as a socioeconomic right and a financial asset. Therefore, to ensure housing as a social right via social policies, there is a need for economic measures that eliminate housing inequalities and create the material conditions under which everybody, regardless of their social class, ethnicity, gender, or sexual orientation, is enabled to make use of their legally assured rights. This is what democratic socialist politics must follow while also involving in the decision-making process the labour classes whose housing needs it should aim to fulfill by transforming the social value of homes into a priority over their marketization, assetization, and financialization.

Since most of the EU population lives in cities of different sizes, and metropolized cities develop together with their surrounding rural areas, this study addresses the housing question as an urban question. Reading through the variety of initiatives on housing launched by EU institutions makes one conclude that the proposals to tackle the lack of social and affordable housing remain void calls, failing to translate into legislative action. Furthermore, predominantly, these initiatives avoid explicitly referring to the matter of public housing or public investment in public housing. This is the case because they continued to be informed by the political conviction that, generally, and in the case of housing construction and management in particular, the EU and state measures should support the private sector and the capital, reducing the public sector’s direct involvement in housing production as much as possible. The effects of EU policies in various MS are diverse according to the legacies of the past housing regimes in the different countries, their core or semi-periphery position within the EU, and how they are connected to the global flow of capital in the domain of (residential) real estate development. There is no space in this study to tackle these specifics; it is pinpointed that EU policies might affect the housing situation in the MS in different ways beyond its general features, including privatization, commodification, financialization, rentierization, or the privileged position of institutional investors, and the exploitation of people’s needs for a home by those who make a profit through housing production, distribution, and transactions.

The present study starts with a brief description of the political economy context of the housing crisis (1), and in its subsequent sections, it elaborates on six questions. It might be used as a toolkit providing information, going to their sources, about EU institutions and their powers (2.1), European Parliament (EP) and European Commission (EC) initiatives on housing and urban development (2.2 and 2.3), EU economic policies (3.1) and social rights instruments (3.2), and recommendations formulated in the last few years by different actors interested in housing matters (7.1, 7.2, and 7.3). The authors define some conclusions and partial recommendations under each section (2.4, 3.3. and 7.4) and express a verdict regarding the critical points in EU policies and instruments (4). Under sections 5 and 6, the study depicts a number of measures to be taken in the housing-urban development nexus and some possible targets to address in a Europe-wide campaign on housing.

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