Housing costs are the biggest expense in households in the European Union, and the rising house prices and rents, the high construction costs and the rising mortgage interest rates are just some of the effects. Where does Romania stand in this context? ‘Housing must be treated as a fundamental right, so that all Europeans, including young people and vulnerable groups, should enjoy decent and sustainable living conditions.’ This was the sentiment expressed in one voice during the first housing forum at the end of last year in Brussels.
A 2023 report showed that nearly half of the rent-paying Europeans felt they were living at the risk of having to leave their home in the next three months because they could no longer afford it. Meanwhile, homelessness is becoming one of the continent’s biggest problems, with nearly a million people without a home.
According to the General Secretary of Housing of Europe, Sorcha Edwards, the current housing crisis has many facets. In addition to overcrowded areas and housing, which contrasts with under-occupied regions, we also face energy poverty, meaning houses that have not been modernized and insulated and thus push people into poor conditions, that is too hot in the summer and too cold in the winter. Another problem is housing for the elderly or disabled, which is not adapted to their needs.
Sorcha Edwards: “We see also people, victims of domestic violence for instance, who do not find alternative accommodation. And of course, we see the most visible face of the housing crisis is homelessness. But the problem and why we have these problems in some areas is mixed. So, it’s sometimes a lack of capacity within local authorities, within governments, because this is a very complex issue. And very often we have lost the knowledge within our governments to manage this complex sector. And we have hoped that in many cases that the market would take care of it. And of course, when we leave a sector like this only to the market, we see opportunism, we see extraction of profit.”
Although, according to Eurostat statistics from 2023, Romania is the country with the highest percentage of homeowners (93% of Romanians own the house they live in and only 7% are rent payers), Romanians’ houses were among the most crowded (40%), surpassed only by those in Latvia, with 40.9%. In addition, houses in Romania and Slovakia have the lowest number of rooms per person: 1.1 rooms against a European average of 1.6. At the opposite pole are Malta and Luxembourg, with 2.3 and 2.2 rooms per person respectively. In 2023, only 1.5% of the entire EU population lived in households without an indoor toilet, shower or bathtub, but, by far, the highest percentage of these were in Romania, over 20% (followed by Bulgaria and Latvia, with 7% each).
Asked what solutions Romania could adopt, inspired by the successful projects of other member states, Sorcha Edwards answers: “Obviously in housing a copy-paste is not really possible. You have to look at your local needs, local scenarios, trends, average income of the population, what are the forecasts in terms of demographic forecasts, in terms of employment opportunities, are there areas where you predict more employment opportunities. So, you have a range of different considerations. But one that we have seen as a very successful approach is to increase the supply of limited profit, public or social housing, depending on which of those models fits more within the local culture and the local needs. So, what that can do is that it can ensure that you avoid housing exclusion, you help to avoid housing overburden rate, and you have to help to provide a choice for people.”
Although the landscape differs from one member state to another, even from one area to another, the main difficulties in reducing the housing crisis at the European level do not differ much from those faced by Romania. Sorcha Edwards is back at the microphone: “So, what we are seeing now is a huge hike in the price of construction materials. This is obviously slowing down the delivery. We are also seeing difficulty in accessing the right amount of land. And if we think about also the potential for conversion of existing buildings, which obviously is also a fantastic option in terms of reducing CO2-embedded carbon in new housing deliveries, we are also seeing delays in the permits because of complexity around ownership of existing buildings. So, these are all issues that can be overcome if we have a clear vision and a clear political will and targets to reach.”
Although Romania has to recover in different aspects compared to the other member states, and although rent and housing prices have also increased in this country, the increases were less dramatic than in most states. If from 2010 to the last quarter of 2024, prices increased by 230% in Hungary and Estonia, by 181% in Lithuania, by 113% in Portugal and by 110% in Bulgaria, in Romania, the increase was below 30%.
Also, according to the expert Sorcha Edwards, the housing sector plays to the tune of the investors, and if their interest does not go beyond maximizing profit in the shortest possible time, access to homes for all European citizens will continue to remain a problem. (LS)
