Housing policies in the EU means for by liaoqinmei






This document consists of two parts.

The first one, regarding housing policies in the European Union, highlights the
interaction between regulations and policies of the European Union and housing
policies of the Member States, and broadly summarizes the study published by
the Spanish Housing Ministry entitled “Housing and European Union Policies”
(Madrid, 2006), whose data and information are dated in early July 2006.

The second part is focused on the analysis of deprived urban areas in the
Member States of the European Union as well as on the way housing policies
are used in these countries as a means for the regeneration of such areas.

It summarizes a study published by the Spanish Housing Ministry known as
“Housing policies as a means for urban regeneration” (Madrid, 2006).

Even though the first part has a broader general scope, its relation to a more
concrete aspect pertaining to the manifold phenomenon of urban areas
degeneration is clear.

The Spanish Housing Ministry is thus happy to make a contribution in the hope
that it should be both constructive and useful for the task of the Ministers of the
Member States of the European Union who will meet in May 2007 in Leipzig
(Germany) in order to discuss a variety of significant subjects related to

                                                        Madrid, March 19th, 2007.



Housing is not reflected, at least directly, in constitutional treaties of the
European Union (hereafter, the EU). In fact, there exists no urban and/or
housing law at EU level.

Yet, a paradoxical situation can be observed: even though housing is not under
the direct competence of the EU, a whole range of EU policies have a
significant impact on housing in the Member States.

In fact, housing has been included in the agenda of numerous European
meetings for many years, namely:

          �	 The informal annual meeting of the Housing Ministers of the
             Member States (since 1989).

          �	 The EU cohesion policy

          �	 The Lisbon Strategy.

Indeed, the housing sector represents:

   •	 A key sector of the EU Member States economy
   •	 A necessary factor to create the conditions to pursue an adequate social
      and economic inclusion
   •	 An important variable to achieve a better environment

Moreover, a number of decisions adopted at a European level have
repercussions on national housing markets afterwards:

   •	 Owing to their incidence upon macroeconomic variables (interest rates,
      inflation, unemployment, economic growth, etc.).
   •	 Owing to the reduction of the room for manoeuvre of national
      governments for the purposes of compliance with the convergence
      conditions settled for the adherence to a single currency.
   •	 Owing to the fact that basic principles, such as the four freedoms of
      movement of the EU, inexorably have significant effects upon national

       housing markets and, in some cases, may reduce the possibilities for
       government intervention.

It can thus be said that the relation between EU policies and housing in the
Member States has become reciprocal. Furthermore, an increasing
interdependence can be observed.


The 1986 Single Act, a founding block for the creation of the European Union
internal market, marks a point in which:

   •	 The first repercussions were felt in the housing sector at Member States
      level stemming from policies based on the principles of free movement.
   •	 A more systematic evaluation of these effects began, for instance, with
      the first informal meeting of Housing Ministers (1989).

A higher involvement of the Commission in housing affairs was also observed,
as reflected in the fact that it was the very Commission that published the first
annual statistics reports. Thus, the first annual report of statistics on housing in
the Member States was developed (published by the European Commission).

It also participated in the recognition of housing as a key element of the
European socioeconomic model. In this regard, the European Commissioner for
Social Affairs, Padraig Flynn, stated in the prologue to the above report:
“Housing and urban development constitute important instruments to fight
unemployment and foster social integration, two primary goals of European
Communities social policies” (Prologue, Statistics on Housing in the European
Community, 1993)

From 1998 onwards, though, a strong invocation of the subsidiarity principle by
Member States was observed, leading to a lesser interest in housing affairs.

This was so until in 2000, when the Lisbon Strategy and the importance
attributed to an increasing coordination of economic policies at EU level, the
interest in the housing issue was renewed.

In 2005 the Urban-Housing intergroup was created within the European
Parliament, which in 2006 passed a European Charter for housing stating that:

   •	 It is critical that the EU should lodge, under dignified conditions, all the
      people living in Europe, whether in rented or owned property.
   •	 Housing is an essential component for the success of the Lisbon
   •	 It is the interest of the EU that Member States develop housing policies
      adequate to social, urban and territorial cohesion of the EU.

The European Commission has also drawn up a working document intended to
become a communication pertaining to the contribution of cities to the cohesion

policy. The document mentions the importance of the development of financing
tools for urban renovation, including rehabilitation of social housing.

Even though this has sometimes brought about a new invocation of the
subsidiarity principle, the highest current presence of housing in the European
agenda is manifested through four strong main trends:

   a)	 Consideration of the impact of policies intended to implement the internal
       market in social vocational services (free movement, competence, state
       aid, etc). Housing, as part of the citizens’ life framework, is affected by
       decisions adopted at European level, such as the ones regarding
       taxation, competence and state aid.

   b)	 Housing fits within the framework of the objectives of the EU social
       agenda, especially in the struggle for greater social integration.

   c)	 Progressive rediscovery of the role of cities in the EU territorial cohesion
       policy and growing interest in sustainable urban development. Housing is
       a full component of an integrated sustainable development policy of
       urban areas and tending to integration and reinforcement of the EU
       social cohesion.

   d)	 Housing deemed as a right. The right to housing is already included in
       the Universal Declaration of Human Rights (Art. 25-1), as well as in the
       Charter of the Fundamental Rights of the European Union (still with no
       legal value) (Art. 34). It is also included in a number of national
       constitutions. But these are rights of a purely declarative nature. In the
       last few years, the tension has focused on the conversion of this right
       into something claimable before national jurisdiction bodies.

From now on, attention will focus on EU policies concerning:

   •	 Internal market (economic and social inclusion policies)

   •	 Social cohesion and territorial policies

   •	 Environmental policies.

These policies exert a regulatory and conceptual influence upon national
housing policies.

Besides, as already pointed out, housing can be considered a key variable for
policies intended to increase economic, social and environmental outcomes of
the EU.

The objectives related to these policies are especially the ones set out in the
2000 Lisbon Strategy, revised in 2005. This is indeed a good example of the
interaction between European policies and housing policies, in which different
topical areas converge.

The goal of this strategy, launched in 2000, was to make the EU the most
competitive knowledge-based economy by 2010.

Not only was the emphasis placed on the economic aspect, but also in social
inclusion, coupled with a sustainable development strategy in the EU
(Gothenburg Strategy, 2001).

After an evaluation in 2004 which yielded unsatisfactory results, during a
European summit in spring 2005, it was decided to focus the strategy on the
two-fold objective of growth and job creation by applying, on the other hand, the
mainstreaming method, i.e. a transversal application of such a strategy through
the whole range of community policies. To some extent, then, the new approach
acts in detriment of the social and environmental pillars.

As regards housing itself, the Kok Report, the basis for the 2000 Lisbon Agenda
revision, sets up a variety of assumptions and interactions between
macroeconomic parameters and housing markets. It also requests reforms
which encourage Member States to consider housing, namely accessible
housing, as a growth factor.

Besides the Kok Report, other reports acknowledge the role of housing in
pursuit of the attainment of the Lisbon Strategy goals. Thus, the 2006 joint
report on social inclusion stresses the major role of housing in national action

Moreover, several national reform plans transposing Lisbon goals into national
policies refer to housing and foresee enlargement measures and park renewal
within the frame of an integrated sustainable urban development.


Since its foundation, the European Union's goal has been to create a great
market free from any obstacle to competence. Housing policies, which are not
under community competence, should still be compatible with the Treaties
general principles. If the present section refers more precisely to the social
housing sector and not to the housing sector as a whole, it is because this is, on
one hand, a sector receiving state aid, and one for which specialized operators
have developed in almost all Member States of the European Union. These two
characteristics are the object of proposals at European level aimed at making
them compatible or rather proving their compatibility with community law.

Within this framework, the debate is held over services of general economic
interest. In fact, the Treaty prohibits in advance both state aid and the
establishment of specific conditions to engage in an economic activity, as well
as authorization regimes for social housing operators. Notwithstanding, under
Article 86(2) of the Treaty, the abolition of these principles is authorized for the
management of services of general economic interest. The debate over a
specific framework for these services is in rapid evolution and will continue to
have a significant incidence on the sector of the “general interest housing”.

After many years of an interinstitutional debate, a series of dossiers have come
to establish a new framework for housing at European level in 2005, something
to be commented on later. This new framework seems to be in contradiction
with some national models at times.

Finally, a new interesting development, following enlargement, must be taken
into account. This should be associated with the Structural Funds issue but is
better analysed in this section in relation to fiscal policy. December 2005 was
the deadline for the Council to reach an agreement on the revision of the Sixth
VAT Directive. What was at stake for the housing sector was significant: the use
of reduced VAT rates for the social housing sector and for repairs and
rehabilitations in the whole housing sector became illegal in the absence of
agreement. In the end, in early February 2006, after intense negotiations an
agreement was reached which confirmed the importance of the housing sector,
and of what is at stake for the future in this sector for new Union countries. In
particular, Poland and the Czech Republic have obtained an expanded
definition of social housing to make possible the selection of the portion of the
housing park multifamily units which have recently undergone changes in
tenure status (privatization).

3.1. Competence: State aid and services of general economic interest


In November 2005, the European Commission adopted a decision based on
Article 86(2) of the EU Treaty, regarding the exemption of notification of aid
granted to SGEI with annual business figures lower than certain specific limits
and of public compensations received by companies performing SGEI.


The EU Treaty sets up a principle of prohibition of public grants to companies,
in order to respect a right to free competence in the common market, i.e. the
prohibition of any economic advantage specifically granted to a company by
means of public resources, which might affect intra-community interchange,
thus giving rise to competition distortions.

However, the Treaty also considers exceptions to this principle of prohibition of
allotment of public aid and, more specifically, for companies accountable for
guaranteeing general interest tasks. Nevertheless, these exceptions only imply
that public funds granted to these companies might be deemed compatible with
the common market, but under the sole condition of proceeding to a previous
notification to the European Commission, so that it can monitor the
“compatibility" of these financing formulas with community policies.


So far, as social housing is acknowledged as a SGEI, an a priori control of
public aid which this sector receives in any of its forms (officially agreed upon
loans, national or local subsidies, granting of lands by public authorities, fiscal
benefits) can be pleaded. For this reason, whenever public authorities grant
funds to a company managing housing social services, they should previously
notify the European Commission so as to obtain the “compatible aid” and thus
authorized label under penalty of illegality. Illegality or lack of notification would
then be penalized through a reimbursement of the received aid.


Owing to the variety of funds granted to the social housing sector by national or
local authorities, to the complexity and wide range of aid, as well as owing to
the weakness of the impact of social housing activity on intra-community
exchange, the European Commission has included social housing companies
under the same category as hospitals in a decision to exempt state funding from
prior notification. This decision facilitates the reinforcement of legal certainty of
aid systems connected with social housing, in response to procedural difficulties
regarding the obligation of notification, which can result in the reimbursement of
amounts granted.

Nonetheless, the decision does not entail a blank check to the granting of public
funds to social housing companies, inasmuch as the European Commission
requires Member States to clearly establish the SGEI missions within the
framework of the application of this decision.

In fact, the Commission requests Member States to clearly commission the
SGEI management to specific companies by means of an official act which sets
out the nature of public service obligations, as well as the companies and
territories in question. Besides, the Commission states that granted aid should
only constitute compensations for these public service obligations imposed to
the company and nothing else. In fact, if overcompensation occurs, it should
then be reimbursed. Compensation should be the object of pre-established
provisions as regards its calculation modalities. Finally, companies
contemplated in the European decision should apply the Transparency
Directive, i.e. carry out a division between the general interest activities they
provide and the rest of their activities. This pragmatic decision proposed in view
of a procedural problem shall be the object of analysis in 2009.

Nevertheless, this decision does not regulate all the difficulties of application of
policies related to state aid granted to social housing companies, in particular, in
the case of resort against the granting of aid and, namely, as regards the scope
of the social housing concept and the compatibility control of aid granted.

3.2. Social services of general interest (SSGI)


In the White Paper on general interest services dated May 12, 2004, the
European Commission, in view of the consultation which it had carried out a
year before, states that there still exists a number of questions on the condition
of application of community law to the specific category of social services of
general interest including social housing, and proposes drawing up a specific
interpretative Communication.


The European Commission published the Communication on Social Services of
General Interest on April 26, 2006, aimed at providing clarifications regarding
the application of European texts to these specific services, as well as
verifications regarding the sector modernization.

In order to accomplish that, the European Commission previously proposes
some criteria for acknowledging SSGI which could be divided in two parts:
social protection regimes and services provided directly to the person, including
social housing, i.e. the search of housing for the disadvantaged or
underprivileged social groups.

The suggested criteria are based on the solidarity principle, the personalized
nature of the service and its link to the fundamental rights and protection of
vulnerable people, the absence of profitable goals, involvement of volunteers,
anchorage in cultural traditions and finally the asymmetric relation between the
service provider and the recipient of the social service.


The Commission specifies the framework applicable to SSGI, recalling the
importance of the subsidiarity principle and the competence of Member States
to define, organize and fund such services. Nonetheless, the text underlines
that only economic services are affected by European regulations, yet stressing
the ineffectiveness of this criterion in as long as the definition of economic
activity in the European law is too broad.

In as far as the SSGI are thus affected, those applied are the Treaty provisions,
rules on public contracts, concessions, public/partner partnerships, rules
regarding state aid and, finally, rules regarding the freedom of establishment
and freedom to provide services (the exclusion of social services from the
Services Directive does not exempt the application of the principles of articles
43 and 49 of the EU Treaty).

The European Commission, within the framework of this Communication follow­
up, has started different studies and is engaged in assessing the suitability of a
legislative initiative in this respect.


The inclusion of social housing in the Communication on Social Services of
General Interest is a significant indication of the acknowledgement by European
authorities of the important role played by social housing in social inclusion and
European cohesion. The willingness to provide clarifications as regards the
conditions of application of community law to SSGI, by acknowledging and
considering the sector specificities, is a prerequisite for the construction of a
balanced common market which meets the Treaty requirements in articles 16
and 86 (2), regarding the primacy of fulfilment of public service missions over
competence and internal market regulations.

Following this publication, many aspects still await concretion in political terms
regarding the extent of legal certainty and the consideration of specificities now
acknowledged by the European law of social services of general interest.

3.3. Services Directive


On January 13, 2004, the European Commission DG for the Internal Market
submitted a draft of the Directive intended to reduce obstacles to the full
accomplishment of the internal market of services, within the framework of
reforms promoted by the Lisbon European Council aimed at the EU becoming
the most competitive and dynamic knowledge-based economy in the world.
Following the publication of a Commission report ("The state of Internal Market
of Services”, 2002) several obstacles seem to remain in the way to the free
movement of services (EU Treaty, Article 49) and in the way to the freedom of
establishment of service providers (Article 43 of above treaty).


The project is applicable to all the services, i.e. “any economic activity
normally provided for remuneration, without the service having to be paid for
those benefiting from it and regardless of the financing arrangements for the
remuneration received in return”. Services of general economic interest are thus
included, among them, social housing.

The project contemplates different means of action with the aim of restricting
obstacles in the way to an internal market of services:
      - Administrative simplification.
      - Reinforcement of freedom of establishment and freedom to provide
        services (country of origin principle).
      - Simplification of the reimbursement of health assistance provided in a
        Member State other than that of the recipient.
      - Modifications to the workers mobility policies.
      - Harmonization promoted by codes of best practices and


The first difficulties encountered for the application of such a text to the social
housing sector have to do with the provisions regarding the freedom of
establishment. In fact, the application of the country of origin principle to the
Services of General Economic Interest (SGEI) as a whole seems rather difficult
inasmuch as the freedom to provide services implies that the service provided
within another Member State is rendered on a temporary basis, which is
completely contradictory to the continuity principle of SGEI and, more precisely,
to the obligations of social housing companies.

Provisions regarding establishment expect Member States to notify the
Commission, the authorization schemes existing in their territories in order to
check that they are neither discriminatory nor unfounded, in the light of a list of
prohibited criteria and criteria that need to be assessed regarding the conditions
of establishment of service providers. This examination of the capability of the
Member States to control service providers with greater anticipation and
especially within the SGEI framework constitutes a true questioning of the
organization of social housing in each Member State. Indeed, Member States,
in order to guarantee that companies accountable for the delivery of social
housing services are fulfilling their tasks effectively, set up a priori authorization
schemes, by legal or contractual means, which actually correspond with most of
the prohibited criteria or criteria pending assessment claimable by the European
Commission in the control of national or local appointment schemes.

As an example, the draft text contemplates the prohibition to impose the
constitution of a national financial guarantee when granting authorization.
Nevertheless, in the great majority of Member States, social housing companies
need to constitute this kind of guarantee both to secure their financial
management, and to perform financial equalization mechanisms between
companies. Other criteria set out by the Commission, such as the requirement
of a specific legal form, the constitution of social capital of companies, etc., are
an integral part of authorizations of social housing provision granted to specific

In conclusion, the horizontal application of the proposal, without service
differentiation, would thus lead to the questioning of national systems of
authorization arrangements to social housing companies and, in consequence,
to the questioning of the freedom of Member States to define, organize and
fund SGEI.


In order to prevent the destabilization of social housing structuring in the
different Member States and to the extent such authorization of companies
does not disturb the internal market of services owing to the small impact of
social housing activity in transactions and owing mainly to the importance of
housing acknowledged in the European social model, and for the purposes of
economic, social and territorial cohesion, the Parliament requested the
exclusion of social services including social housing from such a text in the

report on the draft text for the Services Directive in its first reading (February

In view of the approval of the Parliamentary report, the European Commission
submitted a new revised proposal for the Services Directive on April 4, 2006,
holding this exclusion of social housing from the scope of application of this
horizontal text.

However, the European Commission has restricted the exclusion adopted by
the European Parliament pointing out that the excluded social services, among
them social housing, are the ones “intended to assist people in a particular need
due to insufficient family incomes, a full or partial lack of independence or at risk
of being marginalized" (in a statement of the proposal).

This new proposal must be validated once again by the European Council and
the European Parliament in its second reading. The Council’s commitment aims
at an amended definition which stresses the authorization obligation of

3.4. Public contracts, concessions, public/private partnerships (PPP)


Social housing companies being either public or under the authorities control,
are considered, at European level, as contracting authorities, i.e. corporations
which must apply public contract regulations or the general principles of the
Treaty regarding transparency and equal treatment in the awarding of markets
or contracts for public works, delivery and provision of services.


As far as public contracts are concerned, there is an applicable Directive from
March 2004 that modifies and unifies previous legislation concerning public
works, supply and services contracts. In particular, this new legislative package
introduces the possibility of simplified procedures for some cases.

As far as PPP and concessions are concerned, the Commission adopted a
Communication in November 2005. This text points out that clarification was
needed on the application of European regulations regarding the choice of
private partners in institutional PPP, i.e. mixed economy partnerships. This
clarification should adopt the format of an interpretative communication this
year. The Communication states that contractual PPP should apply provisions
regarding public contracts.

Concessions are also the object of a serious reflection at a European level.
Although this kind of delegation of general interest missions is not subjected to
public contracts, it should nonetheless respect the principles of transparency
and equal treatment contained in the EU Treaty (legal precedents are
constantly set about allowing interested companies to submit proposals within

the framework of the awarding of concessions by means of publicity at the
appropriate level).

Lastly, the “in house” concept is increasingly restrictive, i.e. the possibility for
public authorities themselves to provide services through a distinguished legal
entity, and therefore avoiding public contract regulations in their reports.


The different obligations that derive from the Treaty or from public contract
regulations are claimable in the case of public housing companies.
Nevertheless, both current legal uncertainties related to the institutional PPP
concept and their awarding mechanisms and the ones related to concessions or
“in house” cause great difficulties.

In fact, social housing companies often wonder about the legal relation with
public authorities or with company extensions such as economic interest groups
or subsidiary companies.

These uncertainties lead to an increasing number of appeals, generally
concerning the method of awarding general economic interest services to
companies. The multiplication of these disputes inevitably brings about on site
difficulties to the completion, for instance, of a mission of social housing
building, whilst there is still the need for accessible housing all over Europe.


In regard to the necessary legal certainty in the methods of awarding public
service missions to companies such as the social housing ones, the goal is to
provide a relevant, clear framework allowing these companies considerable
flexibility in their relation with public authorities (or among themselves), at the
same time respecting the general principles of transparency and equal

It would be desirable to get explanations on institutional PPP and concessions.
However, these explanations must take into account the national laws
organizing these authorizations and not merely consist in a trivialization of the
tendering process that does not respond to the need for flexibility in this kind of
relation. An initiative regarding the “in house” concept would also be desirable.

3.5. Fiscal policy: VAT


The Directive 99/85/EC, dated October 22, 1999, regarding the reduction of
VAT rates for highly labour-intensive services creating jobs, enabled the
application of a reduced VAT rate in maintenance works of private housing. Its
text included both rehabilitation and repairs, but not the purchase of materials.
The Directive came into force for a three-year trial period which was first

extended up to the end of 2003, and later until the end of 2005. However, it
always possible to apply the reduced VAT rate to social housing.


The reduced VAT rate, applicable both to new construction works and major
refurbishment works, derives from the Sixth Directive (Directive 77/388/EC),
that authorizes the application of a reduced VAT rate to the “supply,
construction, renovation and alteration of housing provided as part of a social
policy.” On October 22, 2001, the Commission published its proposal on
reduced VAT rates. The Commission pointed out that the application of reduced
rates being optional, together with the lack of a common definition for the
available categories could hinder the correct functioning of the internal market.
This is why the Commission considered it necessary to fully revise both the
regulations regarding reduced rates and the list of available categories, housing
in particular. This revision was to be carried out soon before the end of 2003. In
July 2003, the European Commission proposed a new Directive on reduced
VAT rates in Europe. According to this proposal, the supply, construction,
renovation, alteration, refurbishment and cleaning of housing could benefit from
reduced VAT rates. This would still be optional. Member States would have
been able to choose whether to apply it or not to their national housing market
or to a sub-sector of their housing sector. The proposal was discussed in the
Council of Finance Ministers, who agreed to provisionally postpone the decision
on the new Directive for two years. The European Commission accepted to
apply the 1997 Directive until the end of 2005. This means that the reduced rate
will continue to be applicable to the works in the housing sector.


The first challenge concerns the definition of social housing at a European level.
Although some Member States had expressed their will to apply the reduced
VAT rate to all building works, the Commission decided to restrict it exclusively
to social housing in 1997.

The second challenge refers to the diversity of national situations: social
housing VAT ranges from 25% in Denmark to 0% in England. These notable
differences are the core of the difficulties encountered by the EU to harmonize
rates. Nevertheless, in spite of the Commission's proposal to extend the use of
the VAT rate to the whole housing sector, the Council did not modify the
Directive and therefore only social housing remains available.


In February 2006, after intense negotiations, the Council finally reached an
agreement regarding the extension of the Directive on VAT till 2009. Poland and
the Czech Republic requested an extension of the definition of social housing
with the purpose of including the whole multifamily housing stock. The
Commission accepted this request: the definition of social housing depends
indeed on the Member States (principle of subsidiarity). Collective heating was

added to the list of goods and services to which a reduced VAT rate may be

3.6. Mortgage loan


In the last few years, the European Commission has sought to foster the
integration of the European mortgage market with the purpose of carrying on
with the integration of European economy and financial market.


The Green Paper published in June 2005 often refers to the link between
mortgage cost reductions, growth increases and labour mobility. In its analysis,
the Commission does not take into account the cost of changes of property, a
true constraint to mobility, as well as the housing market structure and the
distribution between the rental sector and the low-cost real state market. The
Green Paper suggests standardizing the information about mortgages so as to
provide the consumer with enhanced services and better prices and increase
the cross-border competence in this sector.


The Commission highlights the great variety of national mortgage market
systems. This increases the risk of setting a minimum harmonization level: this
range of solutions answers the need of each Member States of applying a
particular housing policy, whilst they are in a position to opt between favouring
creditors and strictly protecting consumers.

The difficulty of applying the Code of Conduct, adopted some years before by
the banks operating in the sector, highlights the heterogeneity of processes and


The Green Book inaugurated a period of consultation which ended in November
2005. This consultation showed that none of the stakeholders was willing to go
any further in the market integration. It also showed that the real state market is
local by definition.

The Commission considers that an internal European mortgage loan market
could bring many advantages if it were properly created and managed: it would
offer a broader range of alternatives, lower interest rates and lower prices for
consumers as well as better business opportunities for mortgage services
providers. The Commission will arrange seven meetings with representatives of
mortgage investors and consumer associations before the end of 2006 in order
to analyze the topics of information, counsel, advanced reimbursement and

annual percentage rate (APR). Leading stakeholders in the housing sector
should be encouraged to participate in this dialogue.

A White Paper should be printed by the beginning of 2007 concerning
measures taken among banks.

Both years 2005 and 2006 will be remembered as the years of the “Services
Directive”. In particular, during 2005, intense debates took place, often more
ideological than practical, on the extent and contents of this highly controversial
directive known as the Bolkestein Directive.

For the housing sector, this directive posed mainly the problem (as seen in this
chapter) of the assignments of operators specialized in social housing. These
assignments could either be prohibited (Article 14, Directive proposal) or
mutually assessed (Article 15), depending on their nature. In November 2005, it
was taken a decision on the obligation of assignments for operators providing
services of general economic interest, precisely in order to account for state
aids granted. Two proposals from the Commission proved incompatible with
one another, namely, two contradicting proposals which show the need for a
sound and accurate legal framework so that the sector can develop without any
legal uncertainty. In fact, it is difficult to further develop the outlines of housing
policies, while there is still the expectation on decisions adopted on a case-by­
case basis, which may question globally the aid system.

Today, many options are available and it is up to the political authorities to
orientate the debate.

As already seen, the problems posed by the European law to the social housing
sector are similar to those posed to other social services providers. The
Commission includes social housing in its Communication on Social Services of
General Interest, a new terminology coined out of the need to bestow these
services legal certainty and a framework within the European law. This
Communication was prepared in close collaboration with the Social Protection
Committee, consisting of representatives from the ministries of social affairs.
This Committee is also in charge of the evaluation of National Action Plans on
Social Inclusion (see Section III.3 of this report). It is interesting to consider this
link: social housing is regarded as a pillar for social protection, but, just to give
an example, its function as a regulator of local real state markets is considered
to a lesser extent. Furthermore, within the framework of social policies, social
housing it is considered to be directed to people with less means of support,
what does not match the Nordic or even Austrian concept of social housing,
opened to all levels of society. Still, it is very clear that the primary role of social
housing is to provide and facilitate access to decent and accessible housing to
the most vulnerable ones. Indeed, in order to play this role state aid is
necessary. In order to better understand the reality of social services in Europe
and make suggestions for future actions, the Commission has launched a large
European comparative study on social services, including a chapter on social
housing available in June 2007. It is vital that housing ministers play an active
role in this process.

The Commission launched this study with the purpose of evaluating whether a
specific legal framework will be needed for these sectors, as stated in its
Communication on Social Services of General Interest (SSGI). At European
level, the debate is held over the opportunity of a sector Directive on SSGI that
could contribute to clarifying the application of competition rules and internal
market in the sector. This Directive on SSGI, including housing, would be an
answer to the non-inclusion of these services within the Services Directive.

Nonetheless, it should be observed at this point that the definition of these
services is pending. It should be noted that the initial proposal by the
Commission included social services within its scope of application. In its first
reading, the European Parliament requested its exclusion, suggesting the
following definition: “social services such as social housing services, child
custody services and family services”.

It is now the European Parliament’s task to undertake a second reading and the
definition of social services will be in the centre of debates. Indeed, the
Parliament Representatives seek not to add legal uncertainty for these sectors
with a restricted definition overlooking the integrated approaches of several

As a result of this debate, it is vital that the final definition is left open and there
is room for all the social housing models. Then, if the Services Directive is not
applied to this sector, the Treaty will be applied. A clarification of EU principles
regarding social services will bring certainty to the social housing sector, unless
the most complex option is chosen (in lack of political consensus), namely, the
existence of a horizontal Directive on all the services of general interest. This
would permit a definition of the missions more open than the one linked only to
the social policy.


The importance of housing for social cohesion is acknowledged by important
legislative texts and European and international political statements. Article 34
of the Charter of the Fundamental Rights of the EU acknowledges the right to
assistance for housing. “The access to a decent housing” is one of the goals of
the fight against social exclusion. Several international organizations, including
the EEC through its Committee on Human Settlements and the European
Council, also stress that Governments should palliate deficiencies of the
housing market in order to fight exclusion. The European Commission has
acknowledged that housing market “works worst” for people with limited income
and that public aid granted to social housing should “overcome the deficiencies
of the market in such a manner that they guarantee the access to a decent,
affordable housing to the most underprivileged groups in the population." “All
the Member States, owing to several deficiencies in their housing markets, need
to intervene in order to combat the exclusion of persons or families affected by
social problems or living in certain geographical areas.” These state aids,
although not allocated on a non-discriminatory basis, are legitimate elements of

public policies1.” Therefore, the EU acknowledges aid concerning housing as a
fundamental right.

Moreover, the inclusion of immigrants and persons seeking asylum as well as
their access to decent housing has been subjected to numerous discussions
within the framework of a common immigration policy. Thanks to these
discussions, a series of political instruments has recently been introduced for
the improvement and coordination of actions aimed at integrating immigrants,
on the one hand, and anti-discriminatory directives, on the other hand, as will be
explained below.

The urban question and its effects on social and territorial cohesion have lead
the EU leaders to transversely integrate the urban dimension into the Union
regional policy (urban restructuring, demolitions, improvements in safety,
refurbishing and social aid may, from now one, receive structural funds).

This section of the report will focus on four broad aspects of European politics
that prove the link between housing and the above mentioned objectives of
inclusion/cohesion, both social and territorial. These four aspects are:

1. Policies to fight against discrimination
2. Policies and initiatives intended for the inclusion of immigrants
3. Social inclusion and National Action Plans (NAP) for social inclusion
4. Structural funds.

4.1. Antidiscrimination


Since the Treaty of Amsterdam came into force in 1999, the European Union is
competent to implement policies intended to fight against discrimination, in
accordance to the Article 13, regarding the fight against any form of
discrimination on grounds of sex, race, ethnic origin, religion and believes,
disability, age and sexual orientation.


The European Council adopted a Directive on the fight against discrimination in
June 2000. This Directive on racial equality introduces the principle of equal
treatment, which prohibits any form of direct or indirect discrimination on
grounds of race and ethnic origin and applies to the access to social rights and,
therefore, to the “delivery of and access to goods and services available to the
people, even as far as housing is concerned.” As a result, owners cannot
discriminate on grounds of race or ethnic origin. This Directive came into force
in all the Member States of the European Union in July 2003. Moreover, from
now on, the burden of proof is laid on the housing provider: “when persons who
consider themselves wronged because the principle of equal treatment has not

    Joint Report on Social Inclusion (2004) European Communities (page 70)

been applied to them establish, before a court or other competent authority,
facts from which it may be presumed that there has been direct or indirect
discrimination, it shall be for the respondent to prove that there has been no
breach of the principle of equal treatment.” (Directive 2000/43/EC).


After the Treaty of Amsterdam extended its powers in this field, the EU
inaugurated a new stage in 2000, establishing a specific legal basis for these
actions intended for promoting equal treatment by means of the Directive on
Race Equality (2000/43/EC) and the Directive on Equal Treatment in
Employment and Work (2000/78/EC). These directives protect EU citizens
against all forms of discrimination by providing them with a minimum level of
common protection. They complement and consolidate legislative measures
already adopted by Member States in order to apply the principle of equality,
which already existed before the application of these directives. These
legislative texts provide an accurate picture of what society deems acceptable
and unacceptable, and both directives are part of the strategy developed by the
Community to change the frame of mind and behaviour of its citizens.
Nonetheless, this was not enough, so that the Community coupled these
directives with a community action program against discrimination (2000-2006)
that allowed every state to carry out their own actions to fight against
discrimination at local level, where actions proved more effective. In 2004, the
Council of Ministers adopted a new Directive on Equal Treatment between
Women and Men (2004/113/CE). This new legislation is considered to eliminate
sexist discrimination in the delivery of and access to goods and services. This
Directive will come into force in the EU in two transitory stages: in most of the
sectors, in 2007; then, in the insurance sector (including mortgage insurance),
in 2011. The EQUAL program (2000-2006), one of the main financing
instruments in the fight against discrimination, seeks to develop new ways of
fighting discrimination in the workplace and discrimination regarding jobseekers.


The deadline for Member States to transpose the Race Equality Directive to
their internal legislation was July 19, 2003. However, only a reduced number of
them had adapted their national legislation by that date. The rest of states had
made use of the possibility of a maximum additional grace period of three years
so as to adjust their legislation to the directives. In some fields, it would be
advisable to develop an integrated plan to promote non-discrimination and
equality between genders. Moreover, the EU will continue to promote certain
activities regarding disabilities within the framework of the multi-annual action
plan proposed by the European Commission in 2003. The EU published its first
two-year report on the situation of people with disabilities in December 2005.
The European Commission made 2007 “the European Year of Equal
Opportunities for All” within a frame of coordinated efforts to promote equality
and non-discrimination in the Union.

4.2. Immigration and integration of immigrants


As the Treaty of Amsterdam came into force in 1999, the European Union
became competent to carry out a common immigration policy. Since then,
immigration is no longer a question of coordination among Governments, but of
actions adopted by the EU Council of Ministers from proposals submitted by the
European Commission. In the European Council hold in Tampere, October
1999, the leaders of the EU State Members agreed on the essential elements
needed for a European common immigration policy. They demanded the
adoption of more dynamic policies for the integration of nationals from third
countries residing in the Union. They also agreed on the fact that this integration
policy would eventually tend to grant these nationals from third countries rights
and obligations comparable to the Union citizens’.


The European Council committed itself to adopt a common policy concerning
the right to asylum and immigration. A common policy comprises the following:

   �	 The integration of policies regarding immigration flows into the EU's
      foreign policy
   �	 The development of a European information exchange system
   �	 Common rules regarding asylum, reception of immigrants and family
   �	 Promotion of fundamental rights for all people and of civic responsibility
   �	 Non-discrimination and equal opportunities.

In addition, the Council defined common rules regarding the reception of people
seeking asylum and the definition of “refugee”.


The EU Charter of the Fundamental Rights sets forth a series of principles
applicable to nationals from third countries by virtue of the universal nature of
these rights. The European Commission has proposed a common legal
framework which determines the conditions for admission and residence by
means of a set of directives drafts. In 2003, the Council adopted the proposals
of the Directive regarding: family regrouping, legislation on long-term residing
nationals from third countries and minimum regulations for the reception of
people seeking asylum. On the same year, these directives were completed
with a legislation regarding the criteria and the mechanisms determining the
Member State responsible for the evaluation of asylum requests. Access to
work and equal treatment in the workplace are also essential elements for
successful integration. For this reason, the European Commission has recently
proposed a revision of European directives on employment. In November 2000,
the Commission submitted to the Council a Communication on UE policy
regarding immigration, in which the principle of civic responsibility was stated.
This principle may contribute to the promotion of the integration. This

Communication was followed by a second Communication in July 2001 that
introduced an open method of coordination in EU immigration policy.
The integration entails also fighting against all forms of discrimination, racism
and xenophobia, being nationals from third countries especially vulnerable to
them. In 2000, the EU Council of Ministers adopted a package of measures
against discrimination, followed by a Directive on Racial Discrimination
(2000/43/EC), a Directive on Equal Treatment in Employment and Work
(2000/78/EC) and a Community Action Plan (2001). Moreover, the Treaty of
Amsterdam contains provisions regarding cooperation in relation to police and
justice, precisely on racism and xenophobia issues. Nonetheless, the
development of adequate integration strategies is responsibility of the State
Members, and in this respect, authorities and other local and municipal actors
play a very important role.

The EU also supports integration policies of its Member States by means of
several financial instruments. Preliminary actions intended for the integration of
nationals from third countries (INTI) have largely contributed to the promotion of
activities at local level, the reinforcement of networks and exchange of
information and good practices. Within the frame of its Financial Perspectives
2007-2013, the Commission proposes new solidarity instruments including a
European Fund for the Integration of Nationals from Third Countries. This new
fund feeds on experience of the EQUAL Initiative to promote innovative
approaches in the prevention of discrimination against immigrants in the work
market. Also, its objectives complement the ones of the European Social Fund


On June 3, 2003, the Commission published a Communication entitled
"Immigration, Integration and Employment". Interestingly, this Communication
defines a global approach of integration. In other words, it is not only interested
in employment but also in education, housing, social services and involvement
in social life. In the same spirit and in the light of the summit held in Salonica,
Greece, on June 19 and 20, 2003, the Chiefs of State asked the Commission to
submit annual reports on migration and integration. In November 2004, the first
edition of the Handbook on Integration for policy-makers and practitioners was
published. The second edition, expected by 2006, will focus particularly in urban
and housing issues.

The Hague Program, adopted by the European Council on November 4 and 5,
2004, highlights the need for a better coordination between national integration
policies and European initiatives on the subject. The Council of Justice and
Internal Affairs met on November 19, 2004 and adopted common basic
principles (CBP) which must provide the foundation for a coherent European
framework for the integration of nationals from third countries. One of these
CBP is particularly important for social landlords: “Access for immigrants to
institutions, as well as to public and private goods and services, on a basis
equal to national citizens and in a non-discriminatory way is a critical foundation
for better integration.” The European Commission has recently asked Member

States to allow a thousand million euros for the 2007-2013 period allocated for
an exchange program on immigrants’ integration.

4.3. Social integration


In 2000, the 2000 European Council approved the European social agenda that,
in conformity with the Lisbon Council conclusions and the Commission
Communication, defines priority policies focused on six strategic orientations in
all spheres of social policy every five years. The European Council, on the
occasion of its annual Spring Summit, reviews the application of the agenda
within the framework of the coordination open method from reports by the
Commission and the Council and different indicators applied regularly. Social
partners are associated to this process and in particular participate in the
annual meeting prior to the Spring Summit.


The social agenda provides the details of the application of a European strategy
to fight social exclusion. This strategy has resulted in the development of
national action plans to fight poverty and social exclusion (NAP/inclusion) and
draws up the main objectives and priority axes within this scope. These are
based on a list of common objectives which have been adopted by the Nice
European Council. These common objectives deal especially with access to
housing. In fact, “everybody’s access to decent, healthy living” appears under
the first of these objectives, which is “to foster the participation of all in
employment and everybody’s access to resources, rights, goods and services”.
This strategy also gave rise to the definition of the European inclusion


Every Member State has submitted its NAP/inclusion for 2001-2003 and later
for 2003-2005. New Member States submitted joint memorandums on inclusion
pertaining to the strategy for the following year. The access to decent housing is
an objective which the European Council of Justice and Home Affairs has
unceasingly advocated within the framework of the definition of common
objectives revised for the NAP/inclusion 2003-2005. The Commission and the
Council have elaborated three joint reports on social inclusion. The debate
regarding housing indicators is still under discussion and some political
programs have been progressively set up (for further details, see the Internet
link). The fight against social exclusion is also among the objectives listed by
the Union in section 3 of Article 1.3 of the Constitutional Treaty project: “Combat
social exclusion and discrimination and the promotion of social justice and
protection, equality between women and men, solidarity between generations
and the protection of the rights of the child".

In 2006, the Council approved the Commission’s proposal intended for
streamlining the approach of the three social policies, so that Member States
will only need to develop a single report on the application of the three
strategies: the social inclusion strategy, the long-term care strategy and pension
strategy. This streamlining basically aimed at reinforcing the social dimension of
the Lisbon Strategy. It was supposed to guarantee a positive interaction
between the open coordination method (OCM) on social protection, the broad
orientations of economic policies and the European employment strategy.
Common objectives regarding social inclusion and pensions were replaced by a
set of unified objectives shaped by global objectives. The specific objective of
improving the access to housing has disappeared.

4.4. The urban dimension in the 2007-2013 cohesion policy


The urban dimension in the cohesion policy

The urban dimension is part of the cohesion policy, mainly within the framework
of Objective 2 (aid to economic and social restructuring of regions and areas in
structural difficulty), of the URBAN program and, to a lesser extent, of the
EQUAL program (see previous pages). The main actions available for choice in
this respect referred to urban renovation, accessibility to services, quality of life
in the city, safety, assembly of local actors and improvements to the urban
environment. In line with the cohesion policy, the European Investment Bank
(EIB), the Council of Europe Development Bank (CEDB and the European Bank
for Reconstruction and Development (EBRD) contribute to the joint financing of
actions and projects completed in urban areas through borrowed funds and by
means of their expertise. Thus, in 2004 the EIB approved loans for a total 6.1
billion euros to improve the urban environment in regions of the EU, of which
3.2 billion euros were granted to urban renovation initiatives2

For the 2007-2013 period, the urban dimension appears as a significant factor
in the cohesion policy. On December 6 and 7, 2005, during the informal meeting
at Bristol, European Ministers agreed on the promotion of sustainable urban
development. Since the URBAN initiative has come to an end, the objective was
to integrate its contents into an adequate framework. This issue was the object
of intensive discussions among the three institutions of the Union: What
importance should be attributed to cities and urban dimension? For the
participants in urban renovation, the question was to seek instruments capable
of encouraging national and regional authorities to develop specific actions and
allot them more resources.
In order to reinforce and define the urban dimension of the new cohesion policy,
the European Commission has published a working document pertaining cities
and cohesion. This document, which was to adopt the form of a communication
by the Commission in July 2006, will be integrated into community strategic
orientations that determine the contents of the EU cohesion policy and must be

    A list of the financed projects can be requested from the EIB secretary ( www.eib.org)

approved during summer or spring 2006. The working document highlights the
different ways of achieving the objective:

-    Pay noticeably more attention to urban areas by means of URBAN-type
     integrated interventions by setting up four main priorities: transport,
     accessibility and mobility; access to services and equipment; natural and
     physical environment; the cultural sector.
-    Reaffirm the role of the cohesion policy as an essential instrument of the
     Lisbon Strategy.
-   Associate cities to the application of the cohesion policy to a greater extent.
     This involvement may include even the delegation in municipal authorities of
     the concrete implementation of actions such as urban renovation
-   Resort to innovative financial instruments of urban renovation such as
-   Promote the exchange of experiences and best practices by means of the
     Urban Audit and the URBACT network.

Housing and the cohesion policy

In spite of its important role in the urban renovation process, housing has not
profited so far from the coordination efforts which united Member States and
European institutions within the framework of cities policies.

During the previous programming period of structural funds, even when housing
expenditures were not available for choice within structural funds, housing could
still benefit from European aid, mainly by means of the European Regional
Development Fund (ERDF) pursuant to Objective 2 or within the framework of
the URBAN II program, but also thanks to financial actions within the framework
of the European Social Fund (ESF). Activities available for community aid
through the ERDF mainly included demolitions in line with urban rehabilitation
projects, adaptation of outdoor spaces and the renovation of deteriorated
buildings, the promotion of local governing and the application of safety
measures for tenants. Housing has profited not only from contributions of
structural funds but also from financing in the form of loans granted by the
European Investment Bank and the European Bank for Reconstruction and
Development. In fact, the cohesion policy theoretically advocates infrastructures
projects, actions aiming at the improvement of urban environment, ICT
networks and actions in favour of energy efficiency, whereas the EIB, the CEDB
and the EBRD may finance the construction or rehabilitation of individual social
housing units.

For the programming period 2007-2013

  JASPERS (Joint Assistance in Supporting Projects in European Regions) will assist
national and regional authorities in the development of ambitious infrastructure
projects, while JEREMIE (Joint European Resources for Micro to Medium Enterprises)
will enhance the access to financing of small and medium-sized businesses.
JESSICA (Joint European Support for Sustainable Investment in City Areas) is devoted
to providing solutions to financing problems of distribution and urban development
projects by means of combined subsidies and loans.

Article 7.b of the future General Provisions on Structural Funds, which was the
object of negotiations between the Parliament, the Commission and the
Council, will allow new Member States to devote a maximum 3% of budget for
European regional subsidies to housing, under rather strict conditions.
Recipients cannot be other than multifamily housing buildings, as well as social
housing organizations (public group or non-profit organization).

Operations available for choice will be the following:

          �	 Multifamily housing rehabilitation
          �	 Rehabilitation of some structural elements in buildings (roofs,
             frontages, windows, doors, lifts, common areas)
          �	 Technical installations (electrical installation, garbage handling
             system, etc.)
          �	 Operations linked to energy efficiency including system change of
             boiler rooms, heat distribution, thermal isolation and promotion of
             renewable energies.

Like the other countries, the new Member States face very important problems
regarding housing, particularly in specific aspects related to urban renovation,
energy efficiency and social inclusion.


Given the ambitious objectives announced by the European Union regarding
energy efficiency, it would have been certainly convenient to extend a part of
this proposal to all Member States, so as to create a levering effect and
facilitate the occurrence of new financing formulas at national and local level in
this field.

After five years of existence, the European Social Inclusion Strategy has been
integrated into a broader process on the future of social protection and has
become one of the three pillars of this new approach aimed at streamlining the
different existing strategies in the social sphere so as to group them in a single
document which will be the reference document for Chiefs of State and Head of
Government for every spring summit. On proposing this streamlining, the
Commission has sought to increase the visibility of social policies and their
relations to economic policies, in particular the new Lisbon Strategy.

Also, after five years, the limits of the open coordination method have been
proved, it was a little revolution at its introduction, as a new method in view of
the difficulty to move forward with the existing rules and institutions in all scopes
at European level. This method, which still implies benefits in terms of mutual
understanding, does not carry enough political weight to go any further. Lastly, it
can establish a first stage which allows the creation of a common language and
facilitate the emergence of priority questions. The political link would thus deal
with these questions. From the very beginning, the absence of the European
Parliament has marked the limits of these duties and it holds even more true
within a context in which the Parliament is now the community institution with

the greatest leadership, since the Commission and the Council are specially
weakened by the blockage of the Constitutional Treaty.

But the restructuring of the social inclusion strategy is indeed a step backwards
for the housing sector. With this precise strategy an objective of housing policy
at European level appeared for the first time. Within the new strategy, this
objective has merged into a broader objective of access to services. Besides,
Member States are asked to focus only in those priorities with clear and
quantified objectives in their report on the strategy implementation. Regarding
this issue, it is unlikely that a State will choose the access to decent and
affordable housing as a priority since no common indicators are established,
whilst priorities such as decreasing poverty in children or the number of
homeless are more clearly identifiable. Again, a trend into focussing the efforts
on some actions “to make the difference” can be noticed. This policy conveys
an approach of the social policy which should take care of the most
disadvantaged according to the definition chosen by the Commission in the
second version of the Services Directive.

In such a context, the absence of common indicators related to the access to
decent and affordable housing is even more worrying. These indicators are
necessary to measure the impact of public policies and it is essential to pay
attention to this issue. Moreover, the data which will be available with the new
EUROSTAT network (EU-SILC) from the end of 2006 and the work undertaken
on indicators related to homeless (within EUROSTAT, but also in the Urban
Audit) provide new opportunities to reach an agreement on common indicators.
The research works done by the European Foundation for the Improvement of
Living and Working Conditions represents a progress on housing “dignity”
comparison within the 25 Member States and candidate countries (see also
Section IV).

The social inclusion strategy has been accompanied by an exchange program
(financed by the European Commission) that focused on the visibility of the
strategy rather than in the exchange of good practices. It should be expected
that the continuation of this program (in the bigger program, PROGRESS)
fosters mutual learning to a greater extent, since local exchanges are rich in

The integration of immigrants is not only a “hot” issue at national level in many
countries, but also an issue on which the Commission seeks to make some
progress by using its newly acquired competences on immigration. Moreover,
there is no longer the need to proving the link between spatial segregation and,
consequently, housing policies, integration deficits or the lack of working
opportunities. There will be neither Europe nor a feeling of belonging to Europe
if nationalisms are exacerbated by the rejection of immigration and immigrants.
Based on this fact, the European Commission has adopted a wishful approach
with an experience exchange program for the Integration of Third Country
Nationals (INTI) but has also petitioned the Member States and the Parliament
a much more consistent financing for the next programming period 2007-2013,
so that exchange is enhanced and the adoption of good practices is fostered.
Local housing policies are fully affected by this program. In the end of the year

the Commission will publish the guidelines for the integration of immigrants
through housing. It also seeks to intensify the debates on this issue and will
launch an Annual Forum, whose first meeting will be held on October 9, 2006 at

European territorial cohesion policies do not fully consider the new spatial
segregations. They are still based on a regional approach whilst actually
competitiveness differences in territories should be analyzed within the
neighbourhoods themselves. Nonetheless, diverse initiatives such as reflections
of the URBACT networks and the new information portal EUKN are of a great
interest, but a strengthened urban dimension and specific exchanges in the use
of structural funds are needed. However, the proposed framework for the future
programming period, since Member States were asked to include the urban
dimension in their programs, may prove in a good opportunity for urban
regeneration even in its housing dimension as long as Member States choose
such priority.


The enhancement and protection both of the environment and quality of life are
included among the European Union’s main objectives, listed in Article 2 of the

The Treaty contains a complete title to address environmental issues (articles
174 to 176), a legal foundation for a European environmental policy. In fact,
according to the principle of transversability, all the EU policies should consider
the environmental impact. From a more political viewpoint, from the 2001
European Council at Gothenburg, environmental protection and the promotion
of sustainable development are an integral part of the Lisbon Strategy aiming at
fostering economic, social and environmental performance of the European
Union. Regarding quality of life, a specific program (within the framework of the
Fifth Framework Program of Research and Technological Development) was
developed. Among the objectives of this program were an improvement of the
quality of life and health of European citizens, enhancement of the environment,
sustainable development in agriculture, healthy food habits, fight against
contagious diseases and competitiveness in European bio-industry. These
actions in favour of a better quality of life are based on the expertise of the
European Foundation for the Improvement of Living and Working Conditions,
based in Dublin.

Since housing is the main element in the vital environment, an essential
element to adequately activate the other factors related to quality of life, it
proves an appropriate objective for action in the EU. But housing is not only a
factor but also an expression of the living conditions within the local

There are many Interactions with the environmental policy. Housing is not only
an important source of energy consumption and greenhouse effect gas

emissions, but also it can benefit from environmental actions adopted at
European level which result in the enhancement of the quality of life of the

5.1. Housing and energy issue.

In 2000, the European Commission adopted a series of initiatives including the
Directive on Energy Performance of Buildings, the Directive on Cogeneration,
and a new program known as “Intelligent Energy for Europe”, measures on
renewable energies and Structural Funds 2007/2013.

Since the end of 2003, the Directive on Energy Performance has enforced four
kinds of actions to improve the energy performance of new buildings and
buildings to be renovated: set forth a common methodology for the estimation of
energy performance of buildings, develop minimal standards of energy
performance for new buildings and buildings under restoration, establish a
certification system and guarantee the publicity of these certificates by means of
public displays and control and review boilers as well as heating and cooling

5.1.1. The Green Paper on energy efficiency


The Green Paper seeks to identify the restrictions which currently hinder the
more cost-effective improvements in efficiency. At the beginning of 2005, this
document has been subjected to public consultation intended for promoting
debate at European, national and local levels.


Thus, in particular the Commission proposes:

    �	 To establish energy efficiency annual action plans at a national level
       aimed at defining actions to be adopted at national, regional and local
       levels. They could also be complemented by evaluation exercises and
       by a peer review at European level, so that Member States can benefit
       from the experience of both.
    �	 To provide citizens with better information.
    �	 To improve taxation in order to guarantee the principle of whoever
       pollutes, must pay
    �	 A better specific orientation of the state aid.
    �	 Use of new forms of financing so as to foster not aid.
    �	 Going further as regards new buildings, applying the existing directive
       on energy performance and then extending these measures to minor
       buildings in order to guarantee the best cost-efficiency ratio.

Buildings, particularly housing, exist by operation of law and the Commission
makes a series of proposals in this regard:

    �	 Strict application of the Directive on Energy Performance, which would
       save an estimated amount of 40 million tons equivalent petrol in the
       period from now to 2020.
    �	 Development of an integrated methodology for the estimation of energy
       performance of buildings (Directive)
    �	 Make energy performance regulations more binding, provided that
       Member States do not apply them after verification.
    �	 Extend the Directive on Energy Performance to rehabilitation works.


In general terms, it is difficult to provide stimuli aimed at enhancing energy
efficiency in renting housing, since building owners do not pay energy bills and
thus have no economic interest in investing in improvements. Regarding social
housing, in some countries, the rental fees are regulated and no mechanism
permits to increases them. Returns on investment are therefore theoretical.
Furthermore, a significant increase in charges cannot be applied without
negatively affecting its tenants, who are often modest people.


It is necessary that the European research must not be confined to its
technological aspects and that financial and sociological investigation must be
fostered (best financing methods, inhabitants’ best practices and best
management, etc.). The use of Structural Funds by all Member States intended
for the urban renovation that enables improvements in energy efficiency of
buildings would create a levering effect.

5.1.2. Exchange program: Intelligent Energy for Europe (IEE)

The framework program in the field of energy called “Intelligent Energy for
Europe” for the 2003-2006 period, participates in the application of mid and long
term European strategy and contributes to the achievement of objectives of
greenhouse effect gas emission reduction adopted by the European Union in
Kyoto. The specific objectives of “Intelligent Energy for Europe” include:
promoting energy efficiency and thus reducing CO2 emissions, with the view to
achieve a 18% reduction in energy consumption, from now to 2010, and
increasing in renewable energies from 6 to 12% in the European Union energy
balance, as well as increasing the produced energy from renewable energies
from 14 to 22% by 2010.

The “Intelligent Energy for Europe” program is structured on key actions
including every specific scope. The key action SAVE refers to the enhancement
of energy efficiency and the management of energy demand. Among SAVE
priorities is the key action known as “social housing rehabilitation”.

5.2. An improved measurement of quality of life

5.2.1. The Urban Audit


The quality of life in European cities is subjected to an increasing demand for
evaluation by political leaders at all levels. In order to support their future
actions, set the priorities as close as possible and appraise the progress
achieved, they need to have comparable information about all the EU cities at

The Urban Audit has as its objective to "measure the quality of life in our towns
and cities through the use of a simple set of urban indicators and a common
methodology". These indicators are conceived to be updated and, in the future,
to provide the foundations needed to facilitate the evaluation of the incidence of
national and European policies in the development of urban areas. In line with
this action, EUROSTAT, in collaboration with national statistics institutes, would
be in charge of managing the local data regarding cities and urban areas, as
well as harmonizing information systems and definitions.


The Urban Audit gathers urban statistics of 258 cities in 27 European countries,
with more than 300 statistical indicators regarding aspects such as
demography, society, environment, transport, information society and leisure.
The Audit was launched through a pilot stage in 1998 by initiative of the
Regional Policy Directorate General (DG REGIO) in cooperation with
EUROSTAT and the national offices of the 25 Member States, as well as
Bulgaria and Romania.


The Urban Audit is a key instrument in the housing policy. From 1998 on,
several indicators referring to types of housing, tenure status (owners, tenants
of social housing, tenants of private housing and others), the housing/rent ratio
and the housing size has been set up. The Urban Audit will work on the
exclusion related to housing. It currently gathers data on the number of people
with no fixed abode, i.e. homeless people, and people living in poor or
inadequate housing.


Within the framework of the elaboration of their policies, public authorities can
make use of these statistical tools and compare the performance of the policies

5.2.2. European Quality of Life Survey - EQLS


The quality of life in the EU, citizens’ main concern, has recently been the object
of a first comprehensive study by the European Foundation for the Improvement
of Living and Working Conditions. On the basis of this study, the Foundation
develops its program for monitoring the quality of life within the EU.


This survey4, carried out in 2003-2004 covering 28 countries and interviewing
26,000 people is firstly intended to describe the elements that take part in the
quality of life. In fact, this concept embraces three elements: the individuals’ life
situations (both in micro and macroscopic terms), the multidimensional
interdependence of these situations and, finally, the individuals’ perception
(subjective indicators) on their own situation. The quality of life concept is thus
broader and more operative than the concept of “living conditions”. The study
covers the following aspects: economic resources, housing and environment,
employment and education, family and homes, and, finally, health.


Regarding housing, the study aims at analyzing the links between urban
environment, the income distribution and housing conditions (tenure status
structure, size) and, in this way, seeks to determine inequality factors in terms
of housing. The study concludes that the satisfaction degree regarding
environment and housing conditions is weaker in urban areas than in rural
areas, especially in the EU-10; there is no relation between the access to the
property and the housing conditions. On the contrary, all this could lead to
spatial and social exclusion. It is thus essential that the EU invests more in the
enhancement of the urban environment and in the fight against hostile
conditions regarding housing, often factors of social exclusion.


This kind of study is relevant for those parties involved in European housing
policies, since it highlights the interdependence between housing and the other
dimensions of quality of life, as well as the citizens’ perception regarding
housing conditions.

5.3. Thematic Strategy for Urban Environment


Most cities are facing the same series of environmental problems, such as poor
quality of air, high traffic levels and traffic jams, as well as very high
 European Foundation for the Improvement of Living and Working Conditions: European Quality of
Life Survey (2005)

environmental noise, poor quality of buildings, existence of building plots,
greenhouse effect gas emissions, terracing of cities, garbage and sewage

The origin of these problems lies mainly on lifestyle changes (increasing
dependency on private car use, increase in the number of people living alone,
increase in the rate of use of resources per capita) and demographic evolutions,
both of which need to be considered when seeking solutions. To deal with these
problems of diverse nature affecting urban areas, the European Commission
has published a thematic strategy intended to improve the application of
existing EU policies regarding environment as well as legislation at a local level,
by supporting and encouraging local authorities to adopt a more integrated
approach of urban administration and inviting Member States to support this
process and make use of the possibilities offered in the context of the EU.


The strategy seeks to encourage Member States, and through them, regional
and local authorities, to propose and apply integrated environmental
management techniques and sustainable urban transport plans. In turn, the
Commission will favour the constitution of networks for the exchange of good
practices, the organization of national contact points (for instance, within the
framework of the LIFE+ program and the European Social Fund) which
contribute to train local authorities in the management of problems related to
urban environment.


In 2006 the Commission will publish technical orientations regarding integrated
environmental management based on the gained experience and providing
examples of good practices. In this regard, these orientations will refer to the
most important elements of the EU legislation pertaining to the environment,
particularly the directives referring to air, noise, waste treatment and energy
efficiency. It will propose support mechanisms for the exchange of good
practices, and projects of demonstration of urban issues to local and regional
authorities through these instruments. It will also encourage Member States, as
well as regional and local authorities, to exploit these possibilities. Finally, the
Commission will evaluate the pilot network (at the end of 2006) and will
determine whether it can be useful for the elaboration of a “European
Framework Program for the exchange of experience related to urban
development”, pursuant to the cohesion policy proposed for the 2007-2013

As stated in the European Quality of Life Survey, housing interacts significantly
with urban surroundings and urban environment. The establishment of
integrated environmental management techniques and the encouragement of
the exchange of experience relating urban development offer the housing sector
the opportunity to present both its appropriateness and its technical knowledge.

5.4. Standardization


In summer 2004, a Communication of the European Commission on
Standardization was published. It has as its objective the reinforcement of
standardization activities, particularly in regard to services, and the promotion of
the association of users.


Housing conditions are directly affected by European standardization activities,
which highly affect the building and management of housing units. The housing
sector has to comply with approximately 1,500 standards.

This standardization is in general satisfactory for products: the standard entails
saving time and provides a clear definition of the state-of-the-art while
facilitating the compatibility of products among themselves. Naturally, it also
represents a cost which needs to be considered.

On the other hand, the extension of the scope of application of standardization
to services also affects some activities related to the society. Such is the case
with a pre-standard which observes the prevention of crime by urban planning
and building (CEN TC/325) as well as with the future standard for vandal
resistant lifts (CEN/TC 10), which implies a grid which classifies users and
rearranges strikers and offenders as risk factors under the same category.


It is necessary to start a reflection at a political level on the fields of
standardization in order to analyze the domains which cannot depend on
standardization since not all human endeavours are “standardizable”. When a
standard under elaboration regarding a technical aspect is shown to affect
social issues or political choices (such as the reference to users’ behaviour), it
is the task of the standardization body observing this fact to raise the subject to
the political authority concerned in order to obtain their opinion. Community and
national political authorities must ensure that users are truly consulted.

5.5. Framework Program for Research and Technological Development


The Seventh Framework Program (FP7) is the main EU program for research,
technological development and demonstration activities (RTD), which applies to
the years 2007-2013. The Commission’s proposal, combined with a global
budget of 72.5 billion euros and made public on April 6, 2005, is under debate in
the European Parliament (commissions) and in the Council of Ministers. The
Parliament and the Council should vote on the Program before the end of 2006

since the first proposal summons are expected in December 2006 and the
following ones will next take place at regular intervals.


There are 4 objectives (or programs):

 1. Cooperation
 The objective of the specific program involving cooperation is to support the
 wide range of research activities carried out within the framework of trans­
 national cooperation, from set up projects and networks to research programs
 coordination. International cooperation between the EU and third countries is
 also part of the program.

 The cooperation program will be organized around 9 thematic priorities,
 among which, energy is included with a clear precedence being given to the
 search of renewable energies for heating and cooling, energy generation with
 reduced CO2 emission rates, renewable electricity generation, energy savings
 and energy efficiency. Another example of thematic priority is that of
 nanotechnologies and materials.

 2. Capabilities

 The objective is to reinforce research and innovation capabilities all over
 Europe and to ensure their optimal use, by coordinating and creating research
 infrastructures, supporting regional regroupings oriented to research and
 small and middle-sized businesses (SMEs), fostering a closer relation
 between science and society and enhancing international cooperation. A
 specific action of this program refers to the advantages of research for SMEs:
 it is intended for helping SMEs associations and a large number of SMEs to
 develop technical solutions to deal with problems faced by numerous SMEs,
 in specific industrial sectors or segments by fostering, for instance, the
 necessary research for the development or compliance of European
 standards and for the abidance of regulatory requirements in the context of
 health, safety, and environmental protection.

 3. People

 The aim is to reinforce the human potential in research and technologies in
 Europe both in quality and quantity. For this purpose, it seeks to encourage
 people to pursue a career in the field of research, and European investigators
 to stay in Europe, as well as to make Europe more attractive to the best
 researchers in the world. This objective includes actions in favour of the
 relation between industry and university: transfer of personnel between the
 two sectors within a framework of association, so as to reinforce intersectorial
 cooperation; temporary reception of experienced researchers recruited
 beyond the association framework in both sectors; programming of workshops
 and conferences to foster an intersectorial exchange of experience and
 knowledge aimed at reaching the highest possible number of staff members

 from both sectors; and specially as SMEs are concerned a contribution for
 light equipment according to their involvement in the cooperation.

 4.	 IDEAS

 The objective of the Inter-Disciplinary Experimentation and Scholarship
 (IDEAS) Program, proposed for the FP7, is to promote the dynamism,
 creativity and excellence of European research to reach the highest spheres
 of knowledge. In order to achieve this, it is advisable to support “investigator­
 driven” research carried out across all fields by individual teams in
 competition, at a European level. Projects will be financed from proposals
 submitted by researchers on the subject of their choice and will be evaluated
 on the basis of scientific excellence only, as determined by peer review. EU
 activities regarding vanguard investigation should be put into practice by a
 European Research Council (ERC) formed by a scientific management board
 and a specific implementation structure. The fields of investigation covered
 shall be independent from the thematic orientations of other aspects of the
 Framework Program and will focus on engineering, social sciences and
 human sciences.


1.	 With regard to the cooperation objective: research in engineering contributes
    largely to sustainable social housing: research on new materials (e.g. using
    recycled materials) for the building of housing units, for better insulating
    housing and promoting energy efficiency; research on one’s own energy
    (solar panels, wind motors for suburban neighbourhoods). The housing
    sector could profit from an enhancement of research and innovation in these

2.	 With regard to the “Capabilities” and “People” objectives: the importance
    given to the link between industry and university could be used by housing
    providers and by the sector SMEs. In fact, research institutes could help
    social housing actors to seek technological solutions to problems related to
    building, energy saving and electricity production, all of which affect prices.

3.	 With regard to the “Ideas” objective: the European Research Program will
    need to boost research in several fields such as social sciences and human
    sciences. It will need to deal with issues such as poverty, town planning, the
    integration of disabled people and foreigners, all of which are relevant to
    social housing.

4.	 Both in measures intended for improving the European citizens’ quality of life
    and in those considered to contribute to environmental improvement
    (particularly thanks to a higher energy efficiency), housing appears as an
    important variable for the action of public authorities. Several programs and
    actions, both related to energy and to research and technological
    development, enable housing to be the object of important projects whose
    objective is to foster a cleaner environment (especially urban environment)
    and to improve tenants’ quality of life.

The housing sector is a good example of the impact of European standards and
incentives at national and sub-national levels. Not only these standards
encourage public, associates and private actors of the sector to pursue new
objectives, but also do they provide them with conceptual and material
resources to achieve these objectives. The Members States should thus
systematically integrate housing as a scope for action in terms of environment,
and define the possibilities offered by structural funds in this field.


6.1. A broader and stronger support of sustainable urban development by
the EU

One of the paradoxical aspects of the development of EU policies is the
following: even though the city policy is not included among the Union’s
legislative competences, there yet exists a non-binding cooperation tradition
between the Member States and the European Commission intended for
exploring the different political approaches regarding urbanization issues, and
sharing best practices in this field. "Cities matter", here you have a statement
which has made its way during the past year. But, who can really say what that
means for the EU policy? What does this concept announce for city actors?
What impact could it have on housing organisms?

As already stated in this report, the situation has been clarified regarding
financing possibilities of urban renovation actions within the framework of the
cohesion policy: this will certainly involve a strong urban dimension. It will
encourage Member States to develop programs and policies intended for
promoting sustainable urban development. For the housing sector, the
willingness of European institutions to reinforce the cities’ contribution to the
cohesion policy is seen as a positive signal. Indeed, first of all, housing will be
selectable for the European Regional Development Fund (ERDF) for the new
Member States. On second hand, actions which will resume the “URBAN
method” will be available for choice for all Member States. Finally, the new
financial instruments developed by the European Commission and the
European Investment Bank will enable fund management authorities to promote
urban renovation projects that will include social housing.

Nevertheless, sustainable and integrated urban housing remains a challenge for
the EU and for the housing sector actors.

A series of issues relative to the consideration of urban dimension in the new
period of the cohesion policy is still pending: How can it be guaranteed that
housing actors really have instruments (particularly financial) to allow them to
participate in urban renovation projects? Which ones will be to exchange issues
in the context of financing projects of urban renovation in the “new” Member

States? Indeed, massive privatization of housing stocks considerably increased
the number of individual owners who will require integration in these projects.

In general, how can it be guaranteed that urban renovation efforts extend to all
its dimensions, particularly, that of social cohesion?

Together with the questions regarding the new period of the cohesion policy,
EU support to cities as a main space of European citizenship and life in
common should be reasonably systematized. Beyond urgent situations, it is
essential that all Member States coordinate and encourage the EU, in
compliance with the subsidiarity principle, to develop a framework which
enables long term and global actions based on the association for sustainable
urban development.

6.2. A new governance for housing policies in the EU.

Governance, an old word which became popular only in the nineties, suggests a
form of government organized on the basis of a cooperation, an association, a
contract among a plurality of actors, both public and private.

Housing policies in the Member States are increasingly becoming the object of
actions adopted at different governmental levels and by actors of different
nature, under the double influence of policies of decentralization and
diversification of the actors of housing policies. Then there comes the European
level, which (as already seen) favours coordination but also brings about
legislation which affects the housing sector, whether considered as a good or as
a service.

Governance for housing policies has as well undergone a significant evolution
from the beginning of the 21st century:

-   In the first place, a change of the political context, with a return to housing
    considered as a factor of EU social cohesion.
-   A diversified approach of housing policies with reactive policies (which
    consist in responding to urgent needs and situations) and proactive policies
    (intended for preventing situations of housing exclusion).
-   The establishment of new instruments and concepts at a European level
    (open coordination method, earmarking of expenditures within the
    framework of the cohesion policy, Service Directive).
-   Increasing decentralization of central government responsibilities towards
    regional and local levels, as well as a greater importance of non­
    governmental structures to attain the objectives of the social housing policy.

The outlined governance poses a series of problems:

First, the “legal framework” for housing is characterized today by a certain
degree of vagueness at European level, particularly in relation to the
consideration of social housing as a service of general interest or not. In fact,
the approach of the sector representatives has been so far to exclude housing

from the field of application of EU provisions (especially, the ones regarding the
free circulation of services, and state aid).

This “defensive” approach leads to a certain degree of legal uncertainty for the
sector operators, whose activities could be determined by the decisions of the
European Court of Justice. It is thus advisable to adopt a “positive” framework
for housing at a European level.

From that viewpoint, the Commission’s Communication on Social Services of
General Interest represents significant progress, since it clearly integrates social
housing together with legal systems of social protection and social services for
the individual. This Communication reaffirms that the definition of social housing
is under the competence of Member States. However, as seen in the chapter on
state aid, this competence is restricted by the general principles of the Treaty. It
would be advisable to depict more clearly the boundary between community
and national competences.

Another problem of housing governance has to do with the policies actors.
Since Member States seek to preserve their prerogatives regarding housing
whereas the European Commission seeks to deal with urban issues by creating
an interservice on urban issues similar to the Urban-Housing Intergroup in the
European Parliament, it is important to guarantee the presence of urban
development actors and specially housing actors, whether at the level of
consultation or at the level of policy application.

Finally, governance should not mean only the improved management of
individuals’ needs in terms of housing, but also the prevention of risks of
exclusion, which entails the cooperation among different levels, reinforced in the
context of the social inclusion strategy. In this respect, the European Year
against Poverty, 2010, should facilitate a thoughtful review of governance
issues for a true eradication of poverty and a better quality of life for everyone.

                  FOR URBAN REGENERATION


Urban housing cannot be taken apart from its environment: it cannot be
contemplated as an isolated use, since it implies the use of the city as a space
of coexistence in which it is embodied. Its basic needs for open spaces and
public facilities (education, health, sports, administration, etc.), as well as
access and transport infrastructures which enable communication with other city
spheres or, as the case be, its metropolitan area should be met within its near

Due to various circumstances, the physical obsolescence of the built-up
housing stock and the urban infrastructures (roads, benches, streetlamps,
service networks, etc.) has favoured the degradation of certain areas of many
cities. This degradation, in its turn, has adverse effects, notably on urban
environment and economic activities, that can, as well, lead to a process of
contributing to the expulsion of the population, commercial activities and
services settled in them, creating a vicious circle difficult to hold.

The main problems which these areas may encounter are of physical, economic
and social nature.

   � Problems of a physical nature are the ones resulting from the aging of
   infrastructures, services and edifications: the urbanization in deficient
   conditions or incapable of taking up the current demand for access,
   transport and service networks (water, drainage, energy, communications),
   ramshackle or poor conditioned buildings, incapable (without considerable
   restoration) of meeting the residential demand for the services and facilities
   which they lack and which in many cases prove impossible to get (garage,
   parking lot, etc.) in the reduced scope of the edification itself. There may
   exist empty housing units because they do not meet habitability
   requirements or meet them so minimally that they only face demand from
   groups which cannot have access to another kind of housing.

   � Problems of an economic nature may be owed to different reasons, such
   as the closure or transfer of productive, commercial and service installations,
   with the subsequent loss of jobs in the area. Some influencing factors

   include the physical degradation of the urban environment, which is no
   longer commercially attractive, as well as changes in buying habits, which
   may lead to the disappearance of the small-sized neighbourhood shop that
   tends to be replaced by new shopping malls in the outskirts of the central
   area and in the periphery.

   � Problems of a social nature may result, among other possible causes,
   from the physical degradation of the neighbourhood, lack or shortage of
   open spaces and facilities, as well as from the loss of economic activity and
   the aging of the population. Under these circumstances, the population
   which still enjoys a favourable economic situation may move to other areas
   of the city and be replaced by national or foreign inmigrants of low economic
   standing who settle there in the poorest conditioned buildings through rent
   and sublet, causing overcrowding problems. The high number of
   unemployed people and young people with temporary or precarious jobs,
   together with the occupation of certain areas by marginal groups, may be
   circumstances which add to a conflictive social situation which, in turn,
   worsens the problems of the decline in economic activities and contributes
   to the expulsion of the population which traditionally occupied these central
   areas of the city.

Thus, according to the specific characteristics and situation in each case, and in
order to be effective, urban regeneration operations in these areas may require
an integrated nature which, together with physical rehabilitation and re­
urbanization, shall consider financing measures, measures intended for
promoting employment and economic activity and social measures for training
and aiding for the most needy groups.

Naturally, each country’s circumstances determine sets of problems and
causalities which do not necessarily match those of the other countries. That
explains the interest implied in the exchange of experiences of the Member
States of the European Union (as well as those of the candidate countries) in
this respect.

What seems clear is that housing policies can largely contribute to successful
urban regeneration operations with a vision that goes beyond of simply
facilitating the individual rehabilitation of housing units by their owners (which is
also necessary) or promoting a specific isolated group of social housing units.

They can also contribute to overcome resilience of private capital to invest on
this kind of operations, even with a view to pubic-private collaborations. In turn,
when they act in these areas, they may reach more effectively their objectives
of increasing the supply of affordable housing wherever rehabilitation is cheaper
than urbanization and edification, and of preventing spatial segregation of the
population. Through the reutilization of urbanized soil, instead of dealing with
new forms of development, they can also contribute to a more respectful
planning of sustainability.

Thus, the opportunity to get acquainted with the situations, experience and aims
of the above countries is also of particular interest in this regard. This is what
has encouraged the research whose findings are now presented thanks to the

collaboration of all the abovementioned countries.

That research has been based on the answers submitted by officers in charge
of housing in those countries to a questionnaire delivered by Spain which aimed
at gathering specific information toward a deeper mutual understanding and
allowing all countries to learn about the different policies of regeneration of
degraded areas in the context of the European Union.


The aim is to present the summary document of valuable information gathered
by the Spanish Housing Ministry through a survey on deprived areas conducted
in the second term of 2006 to the (at that time) 25 State Members of the
European Union and the four countries which were then candidates for EU
membership (Bulgaria, Croatia, Romania and Turkey). Bulgaria and Romania
became Member States on January 1, 2007.
Therefore, this document features a summary of the attained results, as well as
a series of conclusions drawn exclusively from the answers to this survey,
without resorting to external sources of information on the issue of deprived
urban areas.
In the light of the nature of the answers and the aim of this document, no final
conclusions will be found for any subject, since they should arise from the
exchange of national experience and from the resulting debate.
The analysis of the results has been carried out according to four main groups
of the countries based on their status, candidate or Member State. For the
latter, initial membership to the European Union is also a criterion. Therefore,
the attention has been focused in the whole of the countries (EU 25+4), the
EU15 (Member States before May 2004), the EU10 (countries integrated in May
2004) and the 4 candidate countries.
Also, the responses were analyzed from another angle, within an approach
according to the different problems detected and their intensity (high, moderate,
low). From this standpoint, countries are grouped according to the types of
problems of common relative intensity.
Finally, it is necessary to highlight that according to the working methodology
adopted, expressions of the kind “country XXX faces a significant problem
(high/moderate/low) in a certain aspect” or similar ones, do not imply a
judgemental conclusion of this report. They are simply a reflection of the
answers framed within the questionnaire that have the above mentioned
predetermined quantitative values.

3.1. Problems regarding housing
The first notable conclusion of this study is that the whole of the countries
surveyed state that large sectors of society suffer from having highly
significant problems in the access to housing. This conclusion determines a
framework for the study and conditions all its results. In fact, access to
housing for medium sectors of society is the most serious problem of those
analysed that EU25+4 globally face.
This problem of access to housing embraces both property and renting tenure
status and affects both tenure statuses in 28 of 29 countries with high/moderate
Breaking down the results according to the housing tenure status, rental
housing proves to be a more pressing problem (being a frequent initial step in
the access to housing by low and middle-income population), and it is
considered a problem of high importance by 17 countries and of moderate
importance by 11 countries and of minor importance only by one country. With
regard to access to housing in property, it is considered a very important
problem in 12 countries and a moderate problem in 16 countries.
It is to be highlighted that ten of the polled countries (i.e. more than a third)
suffer from highly important problems concerning the access to housing, in
relation to both property and renting simultaneously.
Among the main non-economic reasons for this phenomenon, it could be
mentioned, among others, the shortage of social houses and properties
available for renting on the one hand, and of building land on the other hand.
To this respect, in the answers to the questionnaire there rise the main
determining factors to consider, namely:
   � On the one hand, soil management, a factor of the greatest relative
   importance in the EU-15.
   � On the other hand, the efficiency of financing systems, basically in the
   EU-10 countries and candidate countries.
Nonetheless, there is a multitude of active policies aimed at fostering rental and
social housing in property. In this sense, EU-15 countries are the most active
ones, particularly so, as their awareness of the issue increases. The EU-10
countries are proportionally the least active ones.
Similarly, the survey has detected that the deficient state of preservation of the
housing stock in the EU-25+4 countries can globally be considered to constitute
a problem of moderate importance, since 9 countries consider it of high
importance and 16 of moderate importance.


3.2.1. Perception of the importance of the problems and their aspects.

As far as the analysis of deprived areas, which is the main objective of the
questionnaire, is concerned, it can be deduced from the average of answers
that the existence of deprived areas within the cities is a problem of high
importance for the whole of the Member States, as well as for the candidates.
Among the EU25+4, 12 countries consider the existence of deprived areas to
be a problem of high importance, whilst for 11 it is a problem of moderate
However, from the above-mentioned premise, it can also be deduced that the
concept of deprived area is not uniform within the whole of the European Union.
From the answers of the survey, it can be deduced that the perception of
deprived areas has two dimensions, maybe inversely correlated: one related to
physical deterioration (housing, architectural, urban), and the other one related
to social deterioration (unemployment, exclusion, etc.)
The perception of the problem importance can be reasonably correlated to the
Human Development Index developed by the United Nations Development
In the first place, the countries with the highest development index have more
policies and actions on the regeneration of deprived areas.
Besides, the research has shown that, in a general manner, in those countries
with a lesser level of development the perception of deprived areas is basically
demonstrated through the physical aspect, whilst in countries with a higher level
of development it is mainly perceived through the socioeconomic aspect.
Breaking down the results by countries, both the group of the 15 veteran
countries of the European Union and the candidate countries globally consider
the extent of their problems of deprived areas as of high importance, whilst the
10 countries which acceded to membership in 2004 rate the problem in their
cities as moderate.
In line with the above, the EU-15 countries are more sensitive to the social
reality of these environments (interventions defined from different ministries are
a reflection of these worries). They share an integral approach to the problem in
view to propose solutions which deal both with the social problem and with the
housing and urbanism problem.
It is also observed that countries that rate their problem as of a moderate
importance are among the most active concerning the number of policies
applied. This may show a positive correlation between public concern regarding
policies for regenerating deprived areas and the limited extent of the problem,
though this hypothesis should be the object of a deeper analysis to achieve an
unequivocal confirmation.

3.2.2. Spatial localization
As far as the localization of deprived areas in terms of space is concerned, it is
to say that, generally, they are mainly located in the outskirts as well as in those
residential areas where social housing is most common. Although deprived
areas are also detected in the centre of cities and towns (in fact, 13 countries
have programs specifically for the deprived areas within historical centres).
Breaking down the results, it is to say that within the EU 10 countries, as well as
within the candidate countries, the effects of industrial delocalization on urban
degradation are bigger than in the EU-15, and residential use concerns mainly
non-public housing.

3.2.3. Socioeconomic factors
Also, regarding the above-mentioned socio-physical duality of this problem of
deprived areas, it can be observed that, among those countries in which
deprived areas are regarded as a problem of high importance, this concern is
mainly based on four factors, which are mostly socioeconomic, such as:
   •   A high unemployment rate.
   • The fact that these areas are occupied by excluded and non-integrated
   groups (which are generally of immigrant origin in the EU 15, whereas of
   national origin in the rest of the countries).
   • The fact that the part of the population with higher resources or
   purchasing power is leaving these areas.
   •   An increasing lack of law and order.
Also, a physical deterioration of the residential stock and a growing lack of
security frequently coexist with an aged demographic structure and poor public
infrastructures available in these areas.
Moreover, there follows that factors such as industrial delocalization and aging
of the population of deprived areas have a significant impact on both the EU-10
countries and candidate countries.

3.2.4. Policies implemented
In other respects, in order to know how the different countries face the problem
of deprived areas, they were asked about their policies, classified in six groups:
   •   Global Policies
   •   Specific housing policies for the regeneration of deprived areas
   •   Housing Stock Restoration Policies.
   •   Renting Promotion Policies
   •   Social Housing Promotion Policies
   •   Public Land Use Policies

In summary, three large conclusions can be drawn out of the results regarding
global policies:
   • On the one hand, 24 out of the 29 countries make use of global policies
   to deal with the degradation of deprived areas.
   • On the second hand, these global policies used to be of joint
   administrative responsibility, and are mainly driven by the central
   government and the local governments, so that a balance is kept between
   “social” areas (Home Affairs, Employment, Education) and “building” areas
   (Urbanism, Housing, Environment).
   • Finally, a higher number of high priority policies are observed in countries
   with an important problem of deprived areas.
Among all housing policies, housing stock restoration ones are the most
commonly used, since a great majority of countries (twenty-six), have policies of
this kind. Although they are not specific regeneration policies for deprived
areas, they do have a direct impact on these areas. These policies are urged
and financially supported by the central State.
Twenty countries (i.e. 70%) have, together with global housing stock restoration
policies, specific regeneration policies for deprived areas. These policies
are managed by both the local and the central authorities, and have as their
   •   The re-urbanization of deprived areas.
   •   The demolition of buildings in poor condition.
   •   New non-public housing for sale and renting.
   •   New social housing for sale and renting.
The actions more widely used by these 20 countries include the rehabilitation of
buildings, the rehabilitation of housing units and the re-urbanization of the
deprived area; all of these are used by 19 countries (95%). In detail:
   • 70% of the countries also use the demolition of buildings and housing
   units, the building of protected housing for renting and the construction of
   non-public housing for sale.
   • The building of social housing for sale is applied in 65% of the countries,
   while the building of non-public housing for renting is in the 55%.
   • Lastly, there exist other kind of actions to promote renting in 8 countries
The initiative of these policies is chiefly taken on by local authorities, followed by
central authorities. Conversely, their financing is mainly taken on by central and
local governments (85% and 75%, respectively), regional governments playing
a less prominent role (35%). When applicable, fiscal benefits are taken on by
the central government and are the second most widely spread way of financing
these policies.
In line with the seriousness that countries attribute to these problems, it is
significant that in countries with deprived areas problems of high and moderate
importance, nearly the 75% of the countries have specific policies. This positive

correlation between both aspects is inverted in the group of countries with
problems of low importance, since only the 25% of them apply specific policies.
Management interventions programs are varied and countries often apply more
than one. Nonetheless, both local governments and central administration play
an important role in these interventions.
Nevertheless, there exists a significant involvement by the private sector and
there are also possibilities to increase that involvement in the proposal and
financing stages.
Analyzing in depth the contents of rehabilitation interventions for buildings
and housing units, the most common policies are those that aim at energy
efficiency, the improvements in environmental quality, the measures to correct
structural deficiencies in buildings, the improvements of physical accessibility of
buildings and the correction of housing habitability deficiencies.
In these rehabilitation interventions, the main obligations are taken up by central
governments, followed distantly by local authorities. A greater use of these
instruments is also observed in countries with moderate problems compared to
those with problems of high importance.
Regarding the promotion of renting policies, 16 countries (12 of them belong to
UE-15) implement them. Basically, central and local authorities are involved in
this process, regional authorities to a lesser extent. A quarter of the polled
countries (seven) give a specific strategic role in the regeneration of their
deprived areas to promoting renting policies. Therefore:
   • These active policies on renting promotion are characteristic of EU-15
   countries, 80% of which make use of them, while they are implemented in
   only the 30% of the EU-10 countries and in one candidate country.
   • The most implemented policies are those which benefit private citizens,
   both landlords (fiscal benefits) and tenants (direct aid).
   • It is to be highlighted the regional administrations commitment on aids
   granted to promoters of social housing for renting, applied in the 42% of the
Besides, among the whole 29 countries more than a half (15, exactly) have

policies promoting social housing in property, 9 of which consider and

apply these policies as an instrument specifically intended for the regeneration

of deprived areas, whilst the remaining 6 use these policies as global policies,

not specifically intended for the regeneration of deprived areas.

Concerning the kind of policies:

   • Regarding support to buyers, 12 countries offer loan subsidies, 10
   countries offer fiscal benefits and in 5 countries there exist state aids.
   • In 13 countries, a requirement for buyers to access to social housing is
   not to have a housing unit in property; with only 6 of them applying (low)
   income requirements.
   • As regards housing promoters, they are granted public aid in 8 countries
   and enjoy fiscal benefits (state) in 6 countries.
   •   The granting of public land is only used in 7 countries.

   • As a policy of promoting the building of social housing, the direct
   production is carried out by 9 countries: in 6 it is carried out by the central
   government; in one country, only by regional government, in another one by
   the central government and local authorities and finally, in another one by
   the regional government and local government.
In all, 10 countries apply policies promoting housing renting or the
development of social housing, or both kinds of incentive jointly (nearly a
third of all polled countries).
Proportionately, the use of public land is more widely spread, since nearly half
of the countries (14) have this kind of policies. In general, land is under local
administration and is intended to non-profit uses, such as the construction of
social housing or the development of public equipment and facilities.

3.2.5. Policies management
The responsibility in the management of policies and instruments of
regeneration is generally shared by local and central governments, assuming
different roles.
   •   The central government generally finances interventions, while
   • Local governments are responsible for managing such policies,
   either alone or with the help of the central government itself.

3.2.6. Perspectives
The existence of multiple causes converging at the incubation of deprived areas
determines the need for a multidisciplinary approach of the problem, through
the implementation of integral policies involving the respective areas of the Civil
In the near future, 13 countries (46%) are planning to work hard on few urban
deprived areas, whilst 7 (25%) intend to spread their efforts to act in many
areas not so deeply.
Also, approximately half of the countries are planning to maintain the current
guidelines of action regarding deprived areas.
However, it is to be highlighted that two thirds of the EU 10 countries intend to
change them.
Only one country, belonging to the EU 10, has stated that it will not carry out
any specific policy for deprived areas.
Concerning financial resources, 18 countries (i.e. 62%), including a big majority
of those that state to have a problem of low importance of deprived areas,
intend to increase their budgets. Only a minority will sacrifice other actions,
whereas the majority is planning to make use of the European Structural Funds
for this aim.


� The most important problem is access to housing for medium sectors of
society. Since the most active countries are the more concerned about the
problem, the modalities used should probably be reconsidered.
� The perception of the seriousness of physical and social deterioration is
inversely correlated, countries with higher degree of development have a bigger
perception of social deterioration.
� The importance of the social factor determines the need for integral
interventions in the deprived areas.
� There exist plenty of policies for the regeneration of deprived areas,
generally led by the central government and local authorities. In general, the
resources are provided by the central government and the implementation
carried out by the local authorities.
� Only 10 countries use policies promoting renting and social housing in
property, especially those that face a moderate problem as far as deprived
areas are concerned. Therefore, the use of this kind of policies for the
regeneration of deprived areas can be extended.
� There is no “magic formula” of intervention, since most of the countries use
more than one policy. Nonetheless, it should be analysed whether “too many”
formulas in use may exist within one country.


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