The affordability of housing generally refers to the cost of housing services and shelter – both for renters and owner-occupiers – often relative to a given individual’s or household’s disposable income. In many developed countries, the affordability of housing has become a focal point in discussions about housing policy over the past few decades. The significance of housing affordability has increased as the relationship between rental costs/house prices and household incomes has transformed significantly, i.e. rental costs/house prices have increased relative to household incomes2. This process is the result of three main factors, Developers continue to build for upper-income households, which increases the number of housing units, without addressing the affordability of housing,  Old and affordable housing units are torn down and replaced with new, expensive ones and  National and local governments have limited affordable housing policies.

No official, legal or statutory definition of the term ‘affordable housing’ or ‘housing affordability’ is universally accepted across the Member States. According to expert interviewees, this often prevents systematic comparison and assessment of housing policy initiatives at European level. However, for practical purposes, housing affordability is usually operationalized by policymakers based on an assumption that households should not spend more than 30–40% of their income on housing expenditures.