Access to housing has become a critical issue in the EU, affecting millions of families, young people, and others who are unable to secure adequate and affordable accommodation.

The problem is not confined to lower-income groups but also impacts a broader section of society.

There are several contributing factors, including increased demand in urban areas, rising housing costs (including high energy bills), a shortage of housing supply, and regional economic disparities.

In response to the severe housing crisis, the Commission has appointed a Commissioner for Housing and established a task force to ensure affordable housing and coordinate the Commission’s work in this area.

In 2026, the Commission will present a European plan for affordable housing, complementing the housing policies and initiatives of Member States as well as regional and local governments.

Among the key initiatives foreseen, the Commission will review the rules on state aid.

The provision of affordable housing may be considered a service of general economic interest (SGEI) and be financed through state aid.

Member States can support social housing through subsidies without needing prior approval from the European Commission or being subject to financial thresholds, provided that they comply with the conditions of the so-called “SGEI Decision” (a European Commission Decision dated 20 December 2011).

In theory, this decision may also be applied to affordable housing.

However, there are two main issues: on the one hand, the decision does not clearly define what is meant by “affordable housing”, creating difficulties when Member States seek to make use of this option; on the other hand, when support goes beyond traditional social housing, there is a maximum annual threshold of €15 million, which may be insufficient given current needs.

When support exceeds this threshold, another legal instrument of the Commission must be used, namely the “SGEI Framework”. This requires prior notification and approval from the European Commission and imposes more stringent rules than the SGEI Decision, making it harder to fund affordable housing through this mechanism.

As a result, to date, no Member State has notified such aid under the SGEI Framework.

In light of the above, the Commission has, in certain cases, approved state aid for affordable housing directly under Article 107(3)(c) of the TFEU, after assessing whether the positive effects of the aid on competition outweigh the negative effects.

In recent years, the Commission has approved three such aid schemes – in Sweden, Ireland, and the Czech Republic.

However, these decisions each require notification and individual assessment, making this approach unsuitable for widespread application.

In this context, the Commission will review the SGEI rules to give Member States greater flexibility in supporting affordable housing, notably by financing the construction of new buildings and/or the renovation of existing ones.

This review will focus on the SGEI Decision and, potentially, the SGEI Communication.

Accordingly, the Commission will also simplify, update, and clarify certain concepts within the SGEI Decision (and possibly the SGEI Communication), following the 2022 evaluation of the SGEI rules and the revision of the De Minimis Regulation applicable to SGEI undertakings.

The main aim of this initiative is to provide Member States with a tool to subsidise affordable housing projects without causing undue distortions in the private housing market or having negative impacts on social housing initiatives.

Our team remains at your disposal for further information.