Addressing the consequences of Russian aggression towards Ukraine: The case of affordable housing in Central and Eastern Europe
Introduction:
Soon after the start of the war in Ukraine, energy security became a political priority for many European countries. Growing inflation, including increasing energy and food prices, has brought economic insecurity even to many middle-class households. While the speedy implementation of sustainable energy and energy efficiency measures could be a decisive part of the solution to the current European energy challenges, many fear that the financial weight of these changes will be put on those already struggling to pay their bills. Where to start then? This author believes that the affordable and social housing sector in Central and Eastern Europe (CEE) is the place to best maximize the impact of available funds and create a positive outcome while contributing to dealing with the dark reality of war in the EU’s neighborhood.
Why CEE?
The war in Ukraine has brought many challenges. Why should housing be on our immediate agenda? First, increasing the quality of the housing stock could have a significant impact on energy savings and therefore on long-term energy security. In 2020, households represented 27% of final energy consumption. More importantly, the residential sector accounts for 40% of EU gas demand. Around 97% of housing stock across the EU does not meet a sufficient level of energy efficiency and its improvement should be seen as an immediate priority, especially in Central Europe due to the above-average household energy consumption there and limited substitutes for Russian gas.
Specifics of the CEE housing sector:
Despite many citizens managing to acquire affordable housing through this process, the quality of the buildings was often very low due to long-term under-investment in maintenance. Moreover, the rent price cap, which in some cases had been in place for more than a decade, further prevented private landlords of restituted properties from investing in their properties. Furthermore, ‘typically the housing stock in the worst condition remained in public (municipal) ownership, and the most vulnerable households became the typical social tenants’
Accessibility of affordable housing:
Despite a lack of data about the extent of this issue and gaps in terminology, the growing risk of energy poverty has been increasingly addressed by the European Parliament. From the Clean Energy for All Europeans package to the Report on Access to Decent and Affordable Housing for All, the urgency of this issue as well as its inter connectedness with the need for investment in the energy efficiency of European housing stock are recognized across the political spectrum. The bigger problem is the issue of financing support for property owners and developers.
Conclusion:
The war in Ukraine is creating escalating financial pressure on European households and exposes the extent of Europe’s vulnerability to energy poverty. The housing crisis is particularly severe in those CEE countries with an underdeveloped safety net for people struggling to access housing or maintain their property. The allocation of available funds to creating quality housing stock is not only a vital part of measures to increase independence from Russian gas, but an opportunity to address a problem whose potential to undermine the resilience of CEE democracies has been underestimated for years. A redesign of housing policy is a massive task for any country, and it would be unreasonable to expect the refugee crises to trigger large-scale changes.
However, the solutions that are currently being piloted by local governments and the international development sector in the affected countries could trigger the policy changes needed for the development of bankable and sustainable solutions accessible to both the most vulnerable and those on middle incomes.