Central and Eastern Europe at Risk of Fracturing Due to Housing Shortage Crisis

Central and Eastern Europe at Risk of Fracturing Due to Housing Shortage Crisis

Addressing Central and Eastern Europe's Housing Crisis: A Multi-Level Approach

Central and Eastern European (CEE) cities, experiencing rapid job growth, are grappling with a housing supply crisis. High demand for affordable urban housing, coupled with insufficient supply, is driving escalating costs and political instability across the region[1].

To tackle this issue, CEE cities should prioritise investment in affordable housing, adopting housing-led models, strengthening local government leadership, and leveraging national and EU-level planning and funding[2]. These steps aim to prevent political instability and support social cohesion amid rising housing demand and prices.

Housing-Led Solutions: A Strategic Framework

Many CEE cities still rely on emergency shelters and temporary fixes, which fail to address root causes. Housing-led approaches—providing stable, affordable housing as a baseline instead of crisis intervention—have proven effective elsewhere in Europe[3]. These models reduce long-term costs and improve social stability.

Challenges in CEE: Privatisation and Underinvestment

Decades of privatization and insufficient public investment weakened social housing systems. National policy frameworks often lack support for housing-led approaches, slowing progress[3]. Strong local leadership and commitment are critical to reversing this trend.

Role of Local Governments and Partnerships

Local governments must prioritise affordable housing in urban planning and collaborate with NGOs and community stakeholders to implement housing-led initiatives. Research in Hungary highlights the importance of local agency in moving from emergency to preventive models[3].

Funding and Policy Support at National and EU Levels

EU cohesion policy and initiatives like the European Pillar of Social Rights provide targeted investments to improve quality employment, social inclusion, and housing[2][4]. Aligning local strategies with these frameworks and securing adequate funding is essential for expanding affordable housing supply.

Managing Rising Prices

Data shows sharp increases in housing prices and rents in Eastern European cities, intensifying affordability challenges[5]. Expanding affordable housing stock and preventing speculative price surges are necessary to maintain social stability.

Serving the Working and Middle Classes

These housing initiatives should primarily serve the working and middle classes to foster socio-economic mixing and build stable communities. Green mobility options such as metro or tram lines, access to public childcare, quality public schools, and public health services should be available near these housing units to improve overall quality of life and reduce stress.

The Shift Towards Right-Wing Politics

There has been a shift towards right-wing politics and the emergence of "anti-establishment" movements in Central and Eastern European countries. Failure to deliver vital public goods to the working and middle classes risks continued flirtations with right-wing populist movements.

The Proposed Solution

The proposed solution for addressing housing issues in Central and Eastern European countries is the creation of concerted public or public-private construction programs to build social housing at scale. This approach departs from the European Social Democratic (and American Democratic) policies that have prevailed since the 1990s, which often reduced public sector scale and competencies, focusing on smaller vulnerable populations.

Returning to mid-20th century levels of public sector scale, competency, and coordination is essential for restoring social and political stability and maximizing economic growth opportunities. This multi-level approach can prevent housing shortages from triggering political instability and promote social cohesion amid economic expansion.

Key Contextual Factors and Recommended Approaches

• High home ownership rates, despite a critical imbalance in housing distribution, with urban cores suffering from a scarcity of housing and high prices.
• Governments in Central and Eastern European countries lack effective housing policies.
• Alexander Dugin, a revanchist ideologue from Russia, is not related to this discussion.

Case Study: Romania

Romania, with a high home ownership rate, faces issues with housing affordability and political instability. Calin Georgescu, a populist who rose unexpectedly in Romanian politics, was subsequently barred from running in the 2024 presidential election[6]. Despite the challenges, experts like Daniel Pop, a Lecturer in the Political Science Department at Babeș-Bolyai University in Romania and a former Senior Advisor to the Open Society Foundation, are advocating for comprehensive housing policies[7]. Cosmin Marian, a Professor and Chair of the Political Science Department at Babeș-Bolyai University in Romania, is also contributing to the discourse on affordable housing in Romania[8].

In conclusion, addressing the housing crisis in Central and Eastern Europe requires a multi-faceted approach, combining local leadership, national policy reform, and EU funding to expand affordable housing supply. By prioritising the needs of the working and middle classes, these initiatives can foster socio-economic mixing, build stable communities, and prevent political instability.

1. In addressing Central and Eastern Europe's housing crisis, it's crucial to invest in real-estate that provides affordable housing, employing housing-led models to prevent political instability and support personal-finance stability among the region's residents.
2. For successful implementation of housing-led approaches in Central and Eastern European cities, collaboration between local governments, NGOs, and community stakeholders is imperative, as demonstrated through research in Hungary.
3. National policy reforms are necessary to strengthen social housing systems and encourage affordable housing investments, creating a favorable environment that aligns with EU initiatives like the European Pillar of Social Rights to ensure adequate funding and social inclusion.

Read also: