The German Property Federation (ZIA) has commented on the European Commission's proposal for a legislative act on affordable housing, known as the 'Affordable Housing Act'. Although the ZIA welcomes the Commission's intention to create legal certainty for companies and public authorities, the approach is not considered sufficient to effectively address the current housing crisis in Europe. In the ZIA's view, the existing housing shortage primarily results from an imbalance between persistently strong demand and a structurally inadequate housing supply in many European regions.
A sustainable resolution to this situation requires improving the framework conditions for investment, developing new construction capacities, and making more efficient use of existing stock. Future European measures must be judged on whether they reduce existing investment barriers and genuinely promote an expansion of housing supply. However, the ZIA views the 'Affordable Housing Act' critically, as it creates a new legal basis for measures against short-term rentals and for restricting the acquisition or use of land and residential properties not serving as a primary residence.
Short-term rentals represent only a limited proportion of the housing stock in many markets and therefore cannot be identified as the primary cause of the housing shortage. Furthermore, the ZIA considers the introduction of a new EU definition for strained housing markets to be problematic. The proposed criteria, particularly the ratio of property prices to income, are hardly applied in administrative practice in Germany and do not provide a comprehensive picture of the market situation. In the ZIA's assessment, the remaining provisions of the draft also remain largely vague.
Criticism of Regulation and Lack of Supply-Side Impulses
ZIA President Iris Schöberl emphasised that new, additional requirements at EU level must not lead to a thicket of further regulation. She highlighted that existing national and federal regulations should neither be overridden nor duplicated by EU requirements. In particular, the ZIA expresses irritation about new EU rules that facilitate measures for regulating land. Market interventions concerning the use of property should always be considered a last resort and be proportionate.
Alongside the 'Affordable Housing Act', the Commission published a non-binding recommendation to member states. This suggests, among other things, that states should specifically prioritise the construction of affordable housing in regions with housing shortages. Furthermore, local authorities should enable fast-track approval for building renovations and the conversion of office buildings into residential properties. Ms Schöberl noted that while it is positive that the recommendation proposes measures to promote housing supply, from the ZIA's perspective, there must be a 'fast lane' for all residential construction and not just for specific housing segments. Supply-side measures such as the Housing Simplification Package must therefore be vigorously pursued.
Necessity of a Comprehensive Strategy
In the ZIA's view, the recommendation is far from sufficient to comprehensively address the problem. Relief must also be specifically tackled on the financing side, as excessively high capital buffers and risk premiums unnecessarily increase the cost of loans and limit the competitiveness of banks internationally. It is now up to the European Parliament and the member states to further develop the European Commission's proposal. The ZIA stands ready to act as a constructive partner for policymakers in this regard.
