Rasmus Andresen Calls for EU Housing Fund to Curb Rising Rents

Housing has become a central social problem across much of Europe. Rising rents, high renovation costs, and a housing market increasingly shaped by institutional investors are putting particular pressure on low- and middle-income households. At the same time, EU climate targets require owners to carry out energy-efficient renovations whose financing often remains unresolved. Between climate protection, investment needs, and social justice, a tension is emerging that is increasingly occupying European politics as well.

In a written interview with The Transatlantic Ledger, Rasmus Andresen, Green Member of the European Parliament, takes a position on the key contentious issues of European housing and building policy: from the financialization of the housing market to the distribution of renovation costs and the role of the European Investment Bank. Andresen explains which regulatory and financial measures he considers necessary to secure affordable housing without setting aside climate targets.

Focus: Affordable Housing, Renovation Costs, and the Social and Economic Consequences of European Building Policy

The Transatlantic Ledger: Mr. Andresen, housing is becoming increasingly unaffordable in many European cities. In your view, what are currently the most important causes of rising housing costs in Europe?

Rasmus Andresen, MdEP: In my view, several factors come together. A central driver is the financialization of the housing market: housing is increasingly treated as an asset class rather than what it should primarily be — a home.
The scale of this trend is evident in Germany’s development: the housing stock held by financialized housing companies more than quadrupled between 2005 and 2022. Alongside Vonovia, the largest players include LEG Wohnen, TAG Immobilien, and Grand City Properties. At these companies, extraction rates are sometimes above 40 percent — meaning that of every euro in rent, more than 40 cents flows to investors. This is made possible, among other things, by rent increases and cuts in maintenance, housing stock, and services.

On top of this comes a massive shortage of public, non-profit, and permanently affordable housing. Too little has been invested for years, while demand has simultaneously risen. The growing use of apartments as holiday accommodation is also intensifying the situation in many overheated markets.
And finally, energy and utility costs are an important factor. People on low incomes in particular often live in the most energy-inefficient buildings and therefore pay especially high bills.

We therefore need a fundamental rethink: housing must not be treated as a financial investment or a commodity. The housing sector must once again serve people’s needs — with more public and non-profit housing, less speculation, and a socially just energy transition for buildings.

What political measures should the European Union take to promote affordable housing without interfering too heavily in national or municipal responsibilities?

The European Union can create a clear and binding legal framework, set minimum standards, and specifically promote public investment. Concrete housing planning and implementation remain with the member states and municipalities. One important step would be a binding European definition of affordability: no household should permanently have to spend more than 30 percent of its income on housing. Particularly low-income households need additional support here.

At the same time, the EU must significantly increase public investment in social and affordable housing. We Greens are calling for an EU housing fund to promote public investment in the housing market. Public investment in affordable and sustainable housing should be exempted from the debt limits of the EU Stability and Growth Pact (SGP) — as is already the case for defense spending and energy resilience measures.

Another point is curbing speculation. In overheated housing markets, instruments such as rent regulation, stronger taxation of vacant and underused apartments, and clear rules for short-term tourist rentals must be possible. Cities and municipalities need sufficient room for maneuver for this.

Finally, the EU should specifically strengthen non-profit, public, and socially oriented housing providers — for example, through low-cost or interest-free financing and long-term funding conditions. What matters is that subsidized housing remains permanently affordable and is not handed back to the speculative market after a few years.

Energy-efficient renovation: How owners and tenants are to be financially relieved

Energy-efficient building renovation can mean significant investment for private owners. How can we prevent, in particular, low- and middle-income households from being financially overwhelmed?

Energy-efficient renovation is essential, but no one should have to choose between heating and eating. That is why public funding must first reach the people who need it most urgently: energy-poor households and the least energy-efficient buildings. The Social Climate Fund should be expanded and secured on a long-term basis for this purpose. Low-income households in particular need direct grants so that necessary investments do not fail because of high upfront costs.

At the same time, public subsidies must be tied to clear conditions: renovation must improve energy efficiency, but also ensure that the apartment remains permanently affordable. It must not happen that public money increases an owner’s return while tenants foot the bill. And we should rely more strongly on non-profit and public housing providers as well as on collective solutions, such as energy cooperatives and community-organized renovations. This way, the building transition can mean both climate protection and social security at the same time.

Many private homeowners are worried about rising renovation costs and additional European requirements. Are these concerns justified in your view?

These concerns are understandable. For private owners in particular, energy-efficient renovations can mean significant costs, and additional European requirements must not lead to people being financially overwhelmed. But this must not lead to the conclusion that we should abandon ambitious European standards.

What matters, rather, is that requirements and financing are considered together. The EU must support owners in implementation — through direct grants, low-interest or interest-free loans, and a simple way of combining different funding programs. Low- and middle-income households, as well as owners of the least energy-efficient buildings, must be given priority here.

An important lever here is also European debt and fiscal policy. The European Commission has already developed an approach in which certain investments to reduce dependence on fossil fuels and strengthen energy supply are given special consideration in the assessment of public finances, or exempted from fiscal requirements. This includes, for example, investments in renewable energy and storage, charging infrastructure, but explicitly also grants and low-interest loans for medium and comprehensive energy-efficient building renovations. If we invest in renovation today, we lower energy consumption and energy costs in the long term, reduce our dependence on fossil fuel imports, and avoid even higher costs in the future.

Beyond that, we need better advice and simpler funding procedures. Many private owners today do not know which measures make sense and what support they can receive. Municipal and independent energy advice centers can play an important role here.

Who should mainly bear the costs of the European building transition — owners, tenants, the state, or the European Union?

The building transition is a societal investment task. That is why responsibility cannot simply be shifted onto one group. Owners must make their contribution because they benefit from the long-term value of their property. Especially for publicly subsidized housing, returns should be limited and profits reinvested, rather than using public subsidies to boost private returns.

The state must provide support where the investment cannot be managed on one’s own, particularly for low-income households and non-profit housing providers. The EU and member states should enable financing through funding programs, the Social Climate Fund, and public investment. What is decisive, however, is that costs must under no circumstances land disproportionately on those who can least afford to pay. Private investors must make their contribution, and speculation and vacancy must be taxed more heavily. Public funds should therefore be deployed specifically where they create the greatest social and ecological benefit.

How can it be prevented that renovation costs are ultimately passed on to tenants through higher rents, making housing even more expensive?

Protecting tenants is the top priority. Energy-efficient renovations must not serve as a pretext for massive rent increases or displacement. If public money flows into a renovation, it must simultaneously be ensured that the apartment remains affordable in the long term. This can be achieved through rent caps, cost neutrality for tenants, and long-term affordability commitments.

Protection against so-called “renovictions” is especially important: people must not be displaced from their homes simply because the owner wants to carry out extensive renovation. If an apartment is temporarily uninhabitable during renovation, there must be an entitlement to adequate substitute housing. We therefore need a social renovation approach: the state supports the investment, residents permanently benefit from lower energy costs, and the energy quality of the building stock improves. This way, we combine climate protection, energy independence, and social justice.

EU Housing Fund and the Role of the European Investment Bank

In your view, does Europe need significantly stronger funding programs for private owners, housing companies, and municipalities in order to finance necessary renovations?

Yes — but above all, funding programs need to become more socially targeted and easier to access. We need more direct grants for households that cannot finance the investments themselves, as well as long-term, very low-cost loans for municipalities and non-profit housing providers. Municipalities in particular should get better direct access to European funding.

At the same time, it should not simply be about channeling as much money as possible into the market. Public funding must be tied to conditions: permanent affordability, high energy efficiency, good housing quality, and, where appropriate, a cap on returns. That way, funding becomes a long-term public investment rather than a subsidy for private returns.

What role should the European Investment Bank play in financing affordable housing and building renovations?

The European Investment Bank should become a new “one-stop shop” for housing construction. The EIB should not only finance individual building projects, but also support municipalities and housing providers in planning, financing, and implementation.

It is particularly important that municipalities and non-profit housing providers get access to long-term loans on the most favorable — ideally interest-free — terms. The planned pan-European platform for affordable and sustainable housing is an important approach in this regard. What matters is that the money reaches where it creates the greatest social and ecological benefit: permanently affordable, energy-efficient, and high-quality housing.

Stricter rules demanded for real estate companies and institutional investors

Families and middle-income earners in particular are finding it increasingly difficult to acquire home ownership. Should the EU do more to support the purchase of owner-occupied housing?

For many people, owner-occupied housing can be an important form of social and financial security. But the answer to the housing crisis cannot be to bring more and more people into the real estate market using public funds.

Because when supply is scarce, additional purchase incentives can drive prices up further and primarily benefit those who already have capital. That is why the EU should first ensure that rents and housing overall are affordable and secure. Nevertheless, we need to find ways to make it easier, especially for young people, to buy a home.

In many major European cities, private buyers compete with institutional investors for apartments. Are stricter rules needed for large real estate investors and financial corporations in the European housing market?

Yes, and very urgently so. When housing becomes a financial investment object, we need to look much more closely at what impact these investments have on housing costs. We first need transparency about who owns real estate and at what prices it is traded. That is why there should be a European transparency register for real estate transactions and beneficial owners. In addition, we need stronger regulation of real estate funds and other financial actors, more consistent macroprudential supervision, and measures against excessive market concentration. Tax advantages for real estate investors must also be reviewed.

In particularly overheated housing markets, municipalities and member states should be able to temporarily restrict speculative purchases and the acquisition of housing purely for investment purposes. Through a payout cap, real estate corporations should be obliged to reinvest a larger share of their returns back into the properties — for example, for building renovation.

Andresen’s three-point plan for affordable housing in Europe

How do you assess the risk that ambitious renovation requirements could further increase the cost of new construction and the provision of housing?

The risk of rising construction costs is real. But that is not a reason to play climate protection off against affordable housing. What matters is how we build and renovate. The EU should place greater emphasis on the circular economy, material reuse, serial and modular construction methods, and the repurposing of existing buildings. Better use of vacant properties in particular, as well as the conversion of no-longer-needed office and commercial buildings, can create additional housing without constantly consuming new land.

At the same time, the public sector must pay closer attention to costs. For publicly financed projects, we need transparent procurement procedures and clear cost and rent caps, so that public investment is not eaten up by artificially inflated prices.

Good climate protection does not automatically mean more expensive housing. If we invest correctly, energy-efficient buildings can even be cheaper in the long run, thanks to lower energy and operating costs.

The construction industry and housing companies complain about high construction costs, a shortage of skilled workers, and growing bureaucracy. Where do you see opportunities to simplify European requirements without abandoning social and ecological goals?

We should not call for less regulation across the board, but for better and simpler regulation. An important step would be to better align funding programs and approval procedures with one another, and to simplify access to EU funds for municipalities and smaller providers. At the same time, we need more technical advice and support in planning and implementing renovations.

On the skills shortage, we need to invest more heavily in training and further education and secure good working conditions in the construction sector. The cheapest bidder must not automatically win the contract if the low price results from poor wages, insecure working conditions, or poor environmental standards.

And we should promote innovation: serial renovation, prefabrication, reuse of building materials, and local value creation can reduce costs and construction times. The goal must be: less unnecessary bureaucracy, but no compromises on safety, labor rights, climate protection, or affordability.

Should EU funding in future be more strongly linked to the condition that renovated or newly built apartments remain affordable in the long term?

Yes, absolutely. Public money should create lasting public value. If a renovation or new building is financed with European or national funds, the public sector must not simply stand by a few years later while the apartment ends up on the speculative market.

That is why funding should be tied to long-term affordability commitments, social allocation criteria, energy efficiency, and, where appropriate, public or non-profit ownership structures. For non-profit or limited-profit providers, returns should also be capped and profits reinvested in the quality and affordability of the housing stock.

In your view, how can it be prevented that the European transformation of the building sector is perceived by society as a burden, and that people on low and middle incomes in particular lose trust in politics?

People need to experience that climate protection concretely improves their lives: lower energy costs, healthier homes, less dependence on fossil energy imports, and stable, affordable rents. To achieve this, those most affected by energy poverty must be prioritized in investments. At the same time, there needs to be clear protection against displacement. No one should lose their home because of a publicly funded renovation. And people need to be more strongly involved in planning — for example, through municipalities, tenant organizations, cooperatives, and local energy and housing projects.

Ultimately, it comes down to a simple political message: the climate transition must make people’s lives better, not more insecure. If climate protection leads to better housing, lower energy costs, and greater social security, it will not be perceived as a burden, but as progress. That is why we need to pursue a socially just climate policy: a successful building transition is not only a matter of CO₂ savings, but also a matter of affordability.

If you had to name three concrete measures: what should the European Union do in the coming years to keep climate protection, investment, and, above all, affordable housing compatible with one another?

In my view, the three most important measures are:

1. Securing affordability and curbing speculation. The EU needs a clear benchmark for affordable housing: no household should permanently have to spend more than 30 percent of its disposable income on housing costs. At the same time, we need to more strongly regulate the financialization of the housing market — with more transparency about owners, transactions, and returns, as well as measures against speculation and excessive market concentration.

2. Strengthening public investment in affordable housing and directing private capital toward social value. We need significantly more public investment in social and permanently affordable housing. At the same time, the EU should specifically mobilize private capital for societal benefit — for example, through publicly managed housing funds, the promotion of cooperatives, or impact investments. What matters is not only how much capital is mobilized, but what it is used for.

3. Creating a fairer tax and financing structure. The costs of the transformation must not land on those who can least afford to bear them. That is why tax loopholes in real estate investments, for example through share deals, must be closed, and cross-border tax avoidance must be combated more effectively. This can mobilize additional public funds for climate protection, housing, and social infrastructure. Climate protection, investment, and affordable housing are not a contradiction — they are interconnected. If we design regulation, public investment, and private financing correctly, the transformation can be both ecologically and socially just at the same time.

Conclusion

The interview makes clear that Rasmus Andresen locates the causes of Europe’s housing crisis primarily in the financialization of the housing market, a structural shortage of public and non-profit housing, and renovation programs that are insufficiently socially cushioned. His proposals — including a binding European affordability benchmark, an EU housing fund, stricter regulation of institutional real estate investors, and linking funding to long-term affordability commitments — aim to more closely connect climate protection and social security in the building sector.

Andresen’s positions exemplify a housing-policy direction that favors stronger state and European intervention in the housing market, and thereby also raise contentious questions — for example, about the scope of European competences, the effect of rent regulation on housing supply, or the financial feasibility of extensive public funding programs. These questions are likely to remain central to the ongoing European policy debate on affordable housing and the building transition.