CEMR calls for clearer, more coherent and flexible EU rules to help cities, towns and regions deliver affordable housing
Europe urgently needs more affordable, sustainable, and inclusive housing. Yet cities, towns and regions working to deliver new homes increasingly face overlapping rules, lengthy procedures, legal uncertainty and limited investment capacity.
The Council of European Municipalities and Regions (CEMR) provided feedback on existing EU law impacting housing policies, especially at local level. In its response to the European Commission’s call for evidence on housing simplification, CEMR sets out how the European Union can remove unnecessary barriers while protecting essential social, environmental and democratic objectives.
Local and regional governments play a decisive role in housing through spatial planning, permitting, local services, infrastructure, and territorial development. They must therefore be fully involved in the design, implementation, and evaluation of any future European housing simplification measures. EU action should support locally adapted solutions, respect subsidiarity and strengthen the capacity of towns, cities and regions to act, not replace local decision-making with new layers of European requirements.
Simplification, not deregulation
Many EU rules affecting housing pursue legitimate public-interest objectives. Problems arise when requirements from different policy areas overlap, follow incompatible timelines, or impose disproportionate administrative burdens.
Housing projects can be affected simultaneously by procurement, state aid, fiscal, energy, environmental, and construction rules. Their combined effect can increase costs, delay investment, and require local governments to seek expensive external legal or technical expertise.
CEMR is therefore calling for a more coherent regulatory framework, with better-aligned definitions, datasets, deadlines, and digital systems. Simplification should focus on removing duplication and resolving conflicts between rules, while maintaining environmental protection, building quality, social safeguards, and meaningful public participation.
Unlock local investment in affordable housing
Towns, cities and regions cannot respond to housing shortages if public investment continues to be constrained by fiscal and state aid rules that do not adequately recognise the long-term value of affordable housing.
CEMR calls for affordable and energy-efficient housing expenditure to be treated as long-term public investment rather than ordinary current spending. The state aid framework should also provide greater legal certainty and flexibility for municipal and public-interest housing projects.
In particular, procedures related to entrustment, overcompensation controls, and earmarking obligations should be made clearer and more proportionate. Local governments, including smaller towns, should be able to implement housing measures without routinely depending on costly external expertise.
Make public procurement faster and more proportionate
Public procurement rules are another significant source of delay and administrative cost. As construction prices rise, more housing projects fall within complex EU-wide procurement procedures, even where there is little realistic cross-border interest.
CEMR proposes higher procurement thresholds that better reflect current construction and service costs. Its response also calls for greater flexibility to negotiate directly with a contractor following an unsuccessful procedure and to modify contracts when circumstances change after an award.
A simpler and more flexible framework would reduce delays, lower compliance costs, and help local governments bring affordable housing projects forward more quickly.
Align energy, environmental and housing objectives
EU energy rules should better enable local energy sharing, the use of nearby renewable energy and residual heat, and more flexible allocation of grid capacity for projects serving a clear public interest.
Closely connected legislation, including rules on energy efficiency, renewable energy and building performance, should operate as a coherent whole. Rather than prescribing detailed administrative procedures, the EU should promote open standards, interoperable data, and digital permitting systems that can be adapted to national and local administrative structures.
Greater legal certainty is also needed in applying the Birds and Habitats Directives and the Nature Restoration Regulation. CEMR calls for clearer assessment of thresholds, proportionate procedures for low-risk projects, and more flexible approaches to environmental compensation. These changes should improve planning certainty without weakening biodiversity objectives.
Build the capacity to deliver and renovate
Regulatory reform alone will not solve Europe’s housing shortage. Higher productivity in construction and renovation is equally important.
CEMR calls for investment in skills, training, innovation and local administrative capacity, particularly in small and medium-sized municipalities. Better labour mobility and recognition of qualifications could help address workforce shortages, while greater harmonisation of construction standards could reduce fragmentation and support innovative, circular and climate-resilient building methods.
Europe must also look beyond new construction. Renovation, retrofitting and the adaptive reuse of vacant buildings can increase supply, revitalise neighbourhoods and reduce environmental impacts. Making these projects easier to finance, permit and implement should be a core part of the simplification agenda.
Put local and regional governments at the centre
Housing pressures differ sharply from one territory to another. They may be driven by tourism, demographic change, land scarcity, infrastructure gaps, construction costs, depopulation, or shortages of affordable and social housing. Aligned with CEMR’s reaction to the Affordable Housing Act, the definition and related rules for areas under housing stress should be revised.
There can therefore be no single regulatory shortcut that works everywhere. The EU should provide enabling conditions through investment, legal clarity, interoperable systems and smart simplification, while leaving local and regional governments the flexibility to develop solutions suited to their communities.
For more information, contact:
Advisor – Territorial Cohesion & Local Finances
