Housing affordability as an EU policy priority - Past achievements and proposals for future action

• Author: Zuzanna Kowalik - Piotr Lewandowski - Egidijus Barcevicius - Dovydas Caturianas - Jakub Sokolowski
• Pages: 43-48

Policies to e nsure access to aff ordable housing

43 PE 652.729

3. HOUSING AFFORDABILITY AS AN EU POLICY PRIORITY – PAST

ACHIEVEMENTS AND PROPOSALS F OR FU TURE AC TION

3.1. EU housing policy via state aid law, fiscal law and co mpetition l aw

The EU h as no direct com petence in housing policy. It does, however , have compet ences in areas that

direct ly an d indir ectly a ffect h ousin g con dition s in th e Member States , such as state aid law, fiscal law

and compet ition law 121. EU-level market har monisation and integ ration measures (r egulations and

laws) can, for instance, constrain public spending on affordable housing policies, as well as the forms

of public inter vention that may be undertaken in the private housing market122. For example, the EU

could indirect ly affect European hous ing market by rev ising the r ules of the S tabili ty and Grow th

Pact123, which regulat es the fiscal policies of the Memb er States .

State aid is d efined by the EU (and in g eneral) as "an advantage in any for m wha ts oeve r con ferred on a

select ive basis t o under tak ings by nation al public authorities"124. State aid can affect trade and

competition in the internal market and – in principle – runs counter to the ru les and principles of the

internal ma rket set by the EU. Services of general economi c interest (SGEI s) are defined by the

European Commission as "econ omic activit ies tha t public au thorit ies ident ify as bein g of pa rticular

importan ce to citizens and that would not be s upplied (or would be supplied under different

condit ions ) if th ere wer e no pu blic inte rven tion"125. The legal basis for t he regulation of SGEI and State

aid is set out in the Treaty on the Functioning of the European Union (TFEU), Articles 106, 107, and 108.

TFEU Article 106 states that public authorities (be they local, regional, or national) can entrust the

operation of an SGEI to a service provider who is then only subject to the int ernal market and

competition r ules insofar as the application of these rules do not hinder the p erformance of the task

assigned.

Social housing is defined as an SGEI under the current 2012 SGEI package, and is therefore exempt from

State aidregulation, meaning that Member States are not required to notify the Commission with

respect to compensation for social housing. However, this exemption is limited to housing for

"disadvantag ed citiz ens or soci ally less advantag ed groups", w hich has led to some co ntroversy

regarding how such groups should be defined and to what extent this restriction aligns wi th the

right to social housing as guaranteed by the Charter of Fundamental Rights.

Accord ing to the 2009 Commissio n Decision on Du tch social ho using (E2/2005 a nd N642/2009), the

European Commission's role i s limit ed to verifying that Member States do n ot make m anifes t

errors in the defini tion of social housing as an SGEI, and that they comply wi th the basi c

conditions of the SGEI State aid rules – notably the necessity to avoid overcompensation, and

accounting separation. In exercising this role, the European Commission does not impose on Member

States a specific notion of social housing that can constitute an SGEI, but rather verifies the definition

121 Korthals Altes, W.K. (2015), Housing and Pos itive Europe an Integration: Perm issible S tate Aid for Improv ing the Urban E nvironment, J ournal of

Housing and the Built Env ironme nt 30, no. 2 (2015), pp. 341-53, available at:

https ://www.resea rchga te.n et/pub lication/27 1921214_ Hous ing_ and _positiv e_Eu ropean _inte gration _permis sible_ state_a id_for_ impr

oving_the_urban_environment.

122 Vidal, L. ( 2019), Promoting t he Right To Housing At E U Lev el, CIDOB Policy Brief, 2019, available at:

https ://www.cidob .org/e s/pu blicacion es/s er ie_de _pu blica cion/ cidob_ brief in g s/promo ting _th e_rig ht_t o_hou sin g_a t_eu _lev el.

123 Applying the ru les of t he stability and growth pact: How and why the stability and g rowth pact is applie d, E uropea n Commiss ion, available at:

http s://ec.e urop a.eu /inf o/bu sine ss-econ omy-e uro/econ omic-and-f iscal-p olicy -coord in ation /eu-e con omic-governance-monitorin g-

prevention-correction/stab ility-and-g rowth-pact/applying-rules-sta bility-and -growth -pa ct_en .

124 State aid control, E uropean Commission, available at: https://ec.eu ropa.e u/competition/s tate_aid /overvie w/in de x_e n. html.

125 Services of general economic interest (public services), Europ ean C ommission, available at:

https ://ec.europ a.eu /competition/sta te_aid/ov ervie w/pu blic_ serv ices _en .h tml.