How Europe Offers a Way Forward on Housing
Can the U.S. revive its national vision on affordability?
Programs such as the National Housing Act of 1934 and the establishment of the Federal Housing Administration stabilized housing markets, increased access and improved living conditions nationwide. This vision recognized housing not as a mere commodity but as foundational to social stability and economic recovery.
The US has since drifted away from that vision. Housing affordability has reached historic lows, with home prices and rents rising dramatically faster than wages. California exemplifies the severity of this crisis. Over 40 percent of households in the state are burdened by housing costs, and nearly three-quarters of low-income renters spend more than 30 percent of their income on housing. This affordability crisis contributes directly to California’s housing insecurity epidemic, where despite housing roughly 12 percent of the nation’s population, the state accounts for more than a quarter of its unhoused individuals.
LIKE THIS CONTENT? Subscribe to MHN’s Finance & Investment Newsletter
European countries face similar pressures: Home prices across the European Union have surged by more than 60 percent in the past decade, and rents have increased by more than 20 percent. Yet, Europe’s response to housing affordability has been markedly different.
Many European governments invest consistently in social and affordable housing, backed by policies designed to preserve long-term affordability. For example, France allocates nearly 17 percent of its housing stock to public or social housing. Finland’s coordinated “Housing First” initiative has led to a more than 40 percent reduction in unhoused residents over the past two decades.
European affordable housing emphasizes scale, quality and integration. Developments often incorporate long-term planning horizons that enable energy-efficient construction, transit accessibility, mixed-use spaces and community green areas. Moreover, social initiatives—such as childcare, employment and wellness programs—are frequently embedded within housing communities, reflecting a holistic approach that understands affordability as encompassing opportunity, stability and well-being.
In contrast, the U.S. system largely relies on a complex and fragile financing model, dominated by Low Income Housing Tax Credits, tax-exempt bonds and patchwork subsidies. While effective in enabling some affordable housing production, this model is highly sensitive to fluctuations in interest rates, construction costs and rents. Consequently, many projects prioritize financial feasibility over innovation, quality, or resident services.
Applying the lessons
Looking forward, the U.S. must recommit to affordable housing as a core public good and essential infrastructure. Achieving these goals would require significantly increasing public investment in social and affordable housing, alongside reforms that simplify and stabilize financing mechanisms to support long-term project viability.
Furthermore, comprehensive community services, ranging from childcare and workforce development to health and wellness resources, must be integrated into affordable communities. These commitments are vital for fostering stability and opportunity, helping residents not only to secure housing but to thrive within their communities.
Drawing from Europe’s models, U.S. policymakers and developers should adopt long-term planning frameworks that emphasize durability, adaptability and integration with transit and economic hubs. Embracing this approach can create vibrant, sustainable communities where affordability is paired with quality of life and access to opportunity.
Only by aligning vision with decisive and sustained action—treating affordable housing not as an afterthought but as a foundational social and economic imperative—can we reverse decades of disinvestment and fragmentation. A future where affordable housing is accessible, sustainable and truly affordable for millions is not only possible. It’s necessary to restore dignity, stability, and opportunity nationwide.
Joy Silver is chief strategy officer for Community Housing Opportunities Corp.
