AK EUROPA: Housing is a hot topic in Brussels, and the plan for affordable housing is set to be published before Christmas. Before the last EU elections, however, housing was not yet a European issue. What are the reasons for this change of heart?

 

Steenbergen: It's the normative power of the factual. Affordable housing, or rather the lack thereof, is an issue that concerns the whole of Europe. Housing policy is no longer solely a national policy. Of course, each Member State has its own tenancy law and its own law on publicly subsidised and cooperative housing, for example. But the problem is that housing markets are no longer nationally defined. Supranational investments are made in housing markets, and these investments also largely determine the direction in which they are driven.

 

AK EUROPA: How did this increased internationalisation of housing markets come about?

 

Steenbergen: We have observed a concentration of investment in the housing markets, particularly since the global financial crisis in 2008, and have noted a massive shift in ownership as a result. Back in the 2000s, many cities and municipalities sold off their public and social housing stock due to budgetary problems. This public housing stock was sold to private investors, who naturally did not have the same intentions as the previous owners. The primary goal now was to make a profit from the stock.

 

AK EUROPA: Why is the housing sector so attractive to investors?

 

Steenbergen: Especially after the global financial crisis, faith in stocks, funds and derivatives was gone, and people turned to real estate, the so-called "concrete gold". Unfortunately, this further exacerbated financialisation in the housing markets. This demand swept across Europe like a huge wave and led to a redistribution of real estate assets towards listed companies. These properties are also home to people who are dependent on government transfer payments. Take Vonovia, for example: Forty cents of every euro of rent goes directly to shareholders who want to skim off the returns. In this way, the state also contributes to the wealth of a few.

 

AK EUROPA: What role did the tenants' associations and their umbrella organisation, the IUT, play in ensuring that the issue was negotiated at European level?

 

Steenbergen: We have been present here in Brussels for more than 15 years, and we have said from the outset that we need to find a European way to effectively tackle the housing crisis. The housing markets are completely derailed. And that is why we need to take action at European level, because the problem no longer stops at national borders. In the area of short-term and short-stay providers, for example, we are dealing with global players – which means we also need to organise ourselves globally and at European level.

 

AK EUROPA: Has the tenants' movement become more resistant in recent years?

 

Steenbergen: Yes, it has become politicised, simply because there have been such massive rent increases in the private housing markets. In times of concentration and financialisation, there has been a massive conversion of rental apartments. As soon as an apartment came onto the market somewhere, it was bought and profit margins were pushed up – and then rents rise in countries that do not have effective protective laws. The whole situation was then exacerbated by COVID-19. People were dependent on keeping their homes because they were often also their workplaces. All of this together has gradually led to politicisation. This trend can be observed across Europe. We saw this in the run-up to the last European elections. People were asked to name the two most important issues affecting Europeans. The first was job loss. The second issue was unaffordable housing, which was a problem across Europe! So you can see that we really are in dire straits.

 

AK EUROPA: The housing crisis is now perceived as a European crisis – at the same time, it is repeatedly mentioned that Europe-wide rules are difficult to implement because housing regimes in the various member states operate very differently. What are these major national differences?

 

Steenbergen: In Central and Eastern Europe, for example, there are high rates of home ownership because after the end of socialism, the housing stock was privatised and people had the opportunity to buy their rented flats. At the time, most people took advantage of this opportunity and were largely unaware that owning a property also means that they have to pay for all the investments themselves.

 

Now, however, these properties – just think of the large prefabricated housing estates – have very poor energy ratings and are poorly maintained. And the flat owners are not in a position to solve these problems on their own. In a building with 80 individual owners, it is difficult to make an investment decision that affects the entire building, such as when a new roof is needed or a new heating system has to be installed.

 

In southern Europe, there is sometimes an ideological preference for home ownership, which is also supported by government subsidies. This is particularly prevalent in Spain and Italy. Conversely, there is no functioning social tenancy law. However, this should be a top priority. If the supply is limited to short-term rental contracts, often only for a few months or a year, with correspondingly short notice periods, households have to think very carefully about whether to rent, which means living in constant uncertainty. On the other hand, home ownership is unattainable for those on low and middle incomes. In countries where there is insufficient tenant protection, the EU must work with Member States to try to enable secure, long-term rental housing.

 

In Sweden, the debate on subsidies has played a major role. Sweden was forced to change its previous system. In Scandinavia, universal access to public housing applies, with no income limits.  Housing is a human right. In Sweden, a lawsuit filed by private investors with the European Commission, alleging that housing associations had received illegal state subsidies, set the ball rolling. Ultimately, however, the aim was to increase market share for private companies and to push back the strong public sector.

 

In Denmark, Blackstone has invested heavily. The company faced fierce public and political criticism for exploiting loopholes in the law to increase rents significantly after renovation work, by up to 400 per cent. In Copenhagen, this was intended to drive average earners out of their neighbourhoods. Public outrage and pressure from the Danish Tenants' Organisation finally prompted the Danish government to introduce new laws to curb speculation. These examples show that profit-oriented investors specifically seek out loopholes in legal protection and security mechanisms, which they then exploit.

 

AK EUROPA: The subsidy rules mentioned are currently under review. What is your assessment of possible improvement in the area of social and affordable housing?

 

Steenbergen: The European Commission will come up with a new definition of the target group for social and affordable housing. We are now in the final phase, but we have already heard statements to this effect from European Commission Vice-President Teresa Ribera and the Commissioner responsible, Dan Jørgensen. Both also emphasise that they want to facilitate more private investment in social and affordable housing in order to relieve the burden on public budgets and realise the European Housing Plan. However, this should be viewed with caution.

 

EU funding conditions must also be legally guaranteed to ensure that these private investors are subject to the same conditions as public investors. This should not only be binding for funds from the European Investment Bank (EIB) or EU funds, but also for financing from national and regional investment banks.

 

There are two key requirements for ensuring affordability and tenant protection: firstly, rent caps, and secondly, long-term, i.e. open-ended, tenancy agreements. Furthermore, subsidised housing should not be allowed to be sold. Anything that is financed with taxpayers' money must remain in the possession of taxpayers and must not be capitalised.

 

AK EUROPA: Finally, what role does the EU plan for affordable housing play?

 

Steenbergen: The EU Commission is now making a decisive move. Further contributions can be made afterwards, but fundamental changes will be difficult. The Commission has a duty to present a truly bold, far-reaching and, above all, socially balanced plan. And it must have the courage to engage with the Member States and support the implementation of the plan. The Council has already expressed its support, so now it's a question of whether we can achieve a breakthrough.

 

AK EUROPA: Do you feel optimistic that a good plan will be presented?

 

Steenbergen: I am always optimistic. You have to be when you are working to improve tenant protection.

 

 

Further information:

International Union of Tenants

Council: The EU's housing crisis

EU Commission: Making housing affordable

AK EUROPA: Affordable housing: Proposed revision of state aid rules for services of general economic interest (SGEI Decision)

AK EUROPA: Housing crisis in Europe. Draft report causes discontent in the EU Parliament

AK EUROPA: Consultation on EU state aid law - Revision of the SGEI rules as a measure to tackle the housing crisis

AK EUROPA: New special committees in the EU-Parliament. Impetus for affordable housing and the protection of democracy

AK EUROPA: Housing crisis in Europe. What can the EU do to solve it?