The European Investment Bank Group outlined a €10bn investment plan to support affordable and sustainable housing across Europe over the next two years. Speaking at the in Luxembourg on Thursday, EIB Group president Nadia Calviño and European commissioner for energy and housing Dan Jørgensen emphasised the urgent need to address housing shortages and improve energy efficiency across the European Union. Their marked the launch of the EIB’s action plan for affordable and sustainable housing, which aims to finance the construction and renovation of 1.5m housing units and lay the groundwork for a broader pan-European investment platform.

The EIB action plan will support local and national efforts to expand access to affordable housing and modernise existing housing stock with energy-efficient materials and technology. The initiative includes a one-stop-shop housing portal to streamline access to financing and expert advice. The plan also aligns with the European affordable housing plan, which the commission will publish later this year. The EIB confirmed that the platform will be open to collaboration with national promotional banks (NPBs) and international financial institutions (IFIs), and the council of the European Development Bank has already expressed interest in joining.

Housing shortages

The EIB Group’s investment survey, which gathered feedback from 13,000 European small and medium-sized enterprises, highlighted the housing crisis as a growing economic concern, particularly in larger cities. The report found that low productivity and a lack of innovation in the European construction sector were adding to the costs and delays of housing development. Energy costs and carbon dioxide emissions were also key concerns, with two-thirds of household energy consumption being used for heating. With 46m Europeans living in energy poverty, the EIB concluded that improving energy efficiency in housing stock should be a priority.

The EIB Group’s housing task force, established in July 2024, held an initial event attended by 300 public and private stakeholders to discuss financial support strategies for affordable housing. Subsequent technical meetings in autumn 2024 further shaped the development of the pan-European investment platform. The commission is also taking steps to adjust state-aid rules to facilitate financing for housing projects and will offer technical assistance to cities and member states.

Investment and financing targets

Vice president of the EIB, Ioannis Tsakiris, detailed the scale of the housing shortage in his speech at the forum. According to the EIB’s estimates, 2.3m new housing units are required annually in the EU, but only 1.4m building permits are issued each year, creating a shortfall of 900,000 units per year. In addition, 5m homes need to be renovated annually to meet EU climate targets.

To address this gap, the EIB plans to increase its housing-related financing from €3.4bn in 2024 to €4.3bn in 2025 and €6bn by 2026-2027. Over the next two years, the bank aims to mobilise €10bn in financing, which, when combined with private sector investments, is expected to unlock €35bn for new housing projects, renovations and innovative housing solutions.

The EIB’s approach is based on four key pillars:

- Partnerships: Working with the European Commission and NPBs to improve access to finance and advisory services. The commission is already exploring options to unlock cohesion funds for housing projects.

- EU-wide rollout: Expanding EIB support to countries with less developed housing systems and significant unmet housing needs.

- Value-chain approach: Supporting innovation across the entire housing sector, from construction techniques to real estate development and homeownership policies. 

- Mobilisation of private investment: Expanding partnerships with private, for-profit promoters to increase funding sources.

One-stop-shop housing portal

The EIB launched its new one-stop-shop online investment portal for affordable and sustainable housing to facilitate access to financing and expert guidance. Tsakiris stated that this initiative aimed to simplify processes for housing promoters and accelerate project development. He reiterated that the housing crisis in Europe required swift and coordinated action across both public and private sectors.

The European Commission said that it has already been supporting housing initiatives through funding mechanisms such as the recovery and resilience facility, cohesion policy funds, InvestEU, and Life and Horizon Europe. The upcoming European affordable housing plan will provide additional technical support and strategic guidance to member states and cities. The commission is also preparing a European strategy for housing construction, which will address housing supply challenges, analyse the impact of housing speculation, propose revisions to state-aid rules and tackle inefficiencies in the housing market.