The issue of affordable housing is becoming increasingly urgent across the European Union, amid rising prices and a growing shortage of residential units for young people, families, and vulnerable groups.
The European Commission has recently included affordable housing among its funding priorities, assigning it a central role within EU cohesion funds for the 2021–2027 period.
In this context, the European Investment Bank (EIB) proposes a range of financial instruments and technical solutions for public authorities and educational institutions looking to develop sustainable social housing projects or modern university campuses.
Housing Crisis, Intensifying Across Europe
“We conducted an economic analysis to see who and how the housing crisis is affecting. We observed that it particularly impacts young people and young families, especially in large cities where living costs are high,” explained Bianca Faragău, Institutional Policy Officer at the European Investment Bank – Permanent Representation in Brussels, in a video interview for G4Media during the “Regions Week 2025” event.
According to Faragău, there are currently 1.4 million building permits issued for 2025, while the real demand is estimated at 2.3 million housing units, creating a deficit of nearly one million homes in Europe.
In addition to building new housing, she emphasizes that around 5 million existing units require renovation, as they do not meet energy efficiency standards, resulting in high costs for residents.
“We estimate that €300 billion will be needed for affordable housing investments in 2025 alone — equivalent to one-third of the EU budget over seven years,” Faragău highlighted.
EIB Solutions: Affordable Loans, Guarantees, and Technical Assistance
To support member states and local authorities, the European Investment Bank offers direct loans, guarantees for financial institutions, and technical assistance aimed at developing investment plans in the housing sector.
“We provide either loans or guarantees to other banks so they can offer financing at advantageous interest rates. At the same time, we help cities, regions, and governments build administrative capacity and integrated investment plans for affordable housing,” Faragău explained.
She added that local authorities can access EIB support directly, without intermediaries, including mechanisms for reinvesting funds generated by projects into the construction or renovation of additional housing units.
Perspectives for Romania
For Romania, where the real estate market is facing rapid price growth and a severe shortage of housing for young people and students, these instruments could become a vital support. Faragău underlines that cities and universities can access EIB technical assistance to develop modern, sustainable campuses aligned with energy efficiency and social cohesion objectives.
Moreover, the inclusion of affordable housing among EU cohesion fund priorities provides Romania with the opportunity to integrate this area into its urban and regional development strategies.
Conclusion
Affordable housing is no longer just a social issue but also a matter of economic competitiveness for European regions. Through the tools offered by the European Investment Bank and the strategic orientation of EU funds, member states — including Romania — can reduce pressure on the housing market while promoting sustainable investments and social inclusion.
The “Regions Week 2025” event, held in Brussels from October 13–15, confirms that the future of European urbanization increasingly depends on the ability to build affordable, efficient, and sustainable housing through partnerships among the public sector, private investors, and European financial institutions.
