Social Economy in Europe

2. The social economy in housing

Abstract

Housing is crucial for individual well-being, economic stability and growth as well as for social inclusion. It contributes to and influences societal, economic and environmental outcomes; yet, many people, especially vulnerable groups across the EU and OECD countries, struggle to access affordable, quality housing that meets their needs. Many cities and regions across Europe experience a housing affordability crisis.

Social economy entities offer solutions to help address this challenge. They deliver affordable and inclusive housing projects and contribute to advancing energy-efficiency and renewable and circular ways of building. They often provide additional support services, such as care, financial education and legal aid, and foster community development through participatory governance and shared spaces.

Public authorities can support the social economy in delivering on people’s housing needs by improving legal and regulatory framework conditions, by providing access to affordable land and facilitating access to long-term tailored funding mechanisms. Better framework conditions can unlock their full potential.

Infographic 2.1. The role of the social economy in housing

Source: Based on Eurostat data, the OECD Affordable Housing Database, FEANTSA and Laudes Foundation (2025[1]) and Albert et al. (2024[2])

The social, economic and environmental dimensions of housing

Housing has impacts on well-being, the economy and the environment. While it makes up a significant portion of household spending, especially for lower-income households, it provides employment opportunities and contributes to health and well-being (OECD, 2023[3]). Innovative housing solutions are needed to balance affordability with other policy objectives such as improving housing quality, promoting economic growth and enhancing environmental sustainability.

Research shows that access to good-quality housing improves physical and mental health, facilitates educational and professional successes and has a social and cultural value that contributes to socialisation and well-being (Rofle et al., 2020[4]; OECD, 2023[5]). Affordable housing can also improve households’ financial security by reducing their rent or mortgage payments, increasing savings and acting as a collateral for credit (McKnight, 2019[6]; OECD, 2023[5]). Homeownership, which generally has a more equal distribution than other assets, can contribute to wealth accumulation, especially among low- and middle-income households, thus reducing wealth inequalities (OECD, 2020[7]). The location of housing and the proximity of services, such as shops, schools, sports facilities, green spaces and public transport, among others, also play an important role in individual well-being and community development (Moreno et al., 2021[8]).

At the macroeconomic level, the housing market is a driver of economic output, employment, consumption, investment and financial stability. In the EU, in 2022, construction of buildings accounted for 1.7% of the value added and for 2.2% of employed persons in European businesses (Eurostat, 2024[9]). The contribution of housing to employment goes beyond construction activity to include real estate agencies and condominium management companies, among others. The availability of affordable decent housing also makes an area more attractive for workers and improves their ability to access employment (Klien, 2024[10]). Moreover, housing markets affect consumption, investment and financial stability, as shown by the Global Financial Crisis. Higher house prices increase the value of collateral and households’ net worth, which may increase consumption. On the contrary, a drop in house prices reduces investment in construction and lowers the values of collateral, which amplifies the losses faced by lenders in case of a default, decreases household wealth and hampers the ability of individuals as well as small and new firms to borrow (Cavalleri, Cournède and Ziemann, 2019[11]).

Housing also has the potential to contribute to an inclusive green transition. Globally, the building sector is responsible for almost 40% of energy-related CO₂ emissions that come from activities such as heating water and the living space, air conditioning, lighting, electrical appliance use, the use of concrete and steel in construction, and demolition of housing (OECD, 2024[12]; OECD, 2023[5]). The location of housing also affects greenhouse gas emissions from transport used to commute to work and other activities (Subin, 2024[13]). Moreover, housing quality and location play a significant role in exposure to indoor and outdoor pollution and extreme weather events (OECD, 2023[5]). Housing that is structurally not adapted or located in an area prone to natural disasters such as flooding or wildfires, or heatwaves, that are exacerbated by climate change, is likely to have lower value than other options, thereby increasing wealth and spatial inequalities (Thompson et al., 2023[14]).

Housing challenges

Europeans face four broad challenges when it comes to housing: i) housing affordability, ii) a lack of supply of quality housing, iii) homelessness and iv) availability, accessibility and quality of services related to and in proximity to housing. These issues disproportionately affect residents in urban areas and touristic regions and in particular vulnerable groups, such as low-income individuals, young people, children and ethnic minorities. The challenges are reflected in recent survey results. For example, in the 2025 Eurobarometer on urban challenges and investment in cities, almost half (40%) of all respondents and over half (51%) of responding urban dwellers identified a lack of affordable housing as an immediate and urgent problem. The lack of quality public services such as healthcare, childcare, education and care for older people, was identified as an issue by almost a third (32%) of all respondents and the same share of those living in cities, with poverty and homelessness seen as an immediate and urgent problem by almost a quarter (24%) of all surveyed individuals and by almost a third (32%) of urban residents (European Union, 2025[15]). In the 2024 edition of the OECD Risks that Matter Survey, more than half (55%) of respondents in 27 OECD countries were somewhat or very concerned about finding or maintaining adequate housing (OECD, 2025[16]). Accessing good-quality healthcare is the third most mentioned concern (71%), with access to good-quality childcare, education and long-term care being cited as a risk by more than 40% of respondents (OECD, 2025[16]).

Housing affordability

Between 2010 and the first quarter of 2025, rents in the EU have increased by 27.8% and house prices by 57.9% (Eurostat, 2025[17]). The share of the EU population who lives in a household where housing costs account for more than 40% of their income has decreased from 11.5% in 2012 to 8.2% in 2024 but remains high among certain groups (Eurostat, 2025_[23]). As shown in Figure 2.1, EU households living in cities are more likely to experience housing cost overburden than those residing in towns and suburbs and rural areas. Moreover, almost a third (31.1%) of EU population earning below 60% of median equivalised income experience housing cost overburden compared to only 3.8% of the population above the threshold (Figure 2.2). Young people find it increasingly difficult to buy a house and are sometimes left with little choice but to live with their parents, which might contribute to their social exclusion and hinder their independence (Eurofound, 2024[18]; Cournède and Plouin, 2022[19]). In fact, 59% of respondents to the 2024 OECD Risks that Matter Survey aged 18-24 were somewhat or very concerned about their ability to find or maintain adequate housing in the next year or two (OECD, 2025[20]). In the 2025 Eurobarometer on urban challenges and investment in cities, 54% of respondents living in cities aged 25 to 39 reported lack of affordable housing as an immediate and urgent problem (European Union, 2025[15]). Single households are particularly overburdened by housing costs as they cannot benefit from economies of scale created by sharing housing (Frayne et al., 2022[21]).

Figure 2.1. Housing affordability is particularly a challenge in cities

Housing cost overburden rate (percent) by degree of urbanisation, 2024

Note: The housing cost overburden rate refers to the share of population living in households, where total housing costs (utilities, mortgage interest payments net of tax relief, rent payments, structural insurance, mandatory services and charges, regular maintenance and repairs, and taxes) account for more than 40% of disposable income net of housing allowances.

Source: Eurostat (2025[22]); Eurostat (2024[23])

Figure 2.2. Housing affordability is particularly a challenge for poor households

Housing cost overburden rate (percent) by poverty status, 2024

Source: Eurostat (2025[24])

Lack of supply of quality housing

The supply of social and affordable long-term housing is currently not matching the evolving demand. This can be explained by several factors. The demand patterns are changing due to population trends, such as ageing, increase in the number of single and single-parent households, urbanisation and migration, which all increase the number of households in a given area (Lee, Kemp and Reina, 2022[25]; Frayne et al., 2022[21]). More housing is needed to meet this demand. Based on estimates, housing shortages are significant in many EU countries. For example, the Netherlands plans to construct 936 000 dwellings by 2030, Germany faces an estimated shortage of 800 000 apartments, and Sweden needs to construct 67 300 new homes by 2030 to respond to growing demand (Pieper, 2024[26]; Albert et al., 2024[2]). In recent years, housing supply has been slow to adjust to strong demand pressures due to the sudden decrease in the issuance of building permits during the Covid-19 pandemic lockdowns, increasing prices of raw materials for construction and a rise in deleveraging that slowed down investments in real estate (Frayne et al., 2022[21]). In some areas, vacant or holiday housing as well as growth in short-term rentals decrease the availability of long-term housing. In the EU, over 47.5 million homes are vacant (FEANTSA and Laudes Foundation, 2025[1]). Recent estimates show that vacant dwellings and seasonal/holiday homes represented 31% of the total dwelling stock in Portugal (2021), 27% in Spain (2021), 24% in Estonia (2021), 19% in Slovenia (2021) and 18% in France (2022) (OECD, 2024[27]).

A significant share of EU population lives in poor-quality housing. In 2023, an estimated 15.6% of EU population lived in a dwelling with either a leaking roof, damp walls, floors or foundation or rot in window frames or floor, with the share reaching 29% in Portugal and 23% in Spain (Eurostat, 2025[28]). In 2024, 16.9% of the EU population lived in an overcrowded household with over a quarter (28.9%) of those earning below 60% of equivalised income living in these conditions (Eurostat, 2025[29]). In the same year, almost one in ten (9.2%) Europeans could not keep their home adequately warm with households in Bulgaria (19.0%), Greece (19.0%) and Lithuania (18.0%) being particularly affected (Eurostat, 2025[30]). More than 4 out of 5 (85%) of the EU’s buildings were constructed before 2000, three-quarters of which have a poor energy performance (European Commission, n.d.[31]). Poor-quality housing negatively influences children’s school performance, facilitates the spread of infectious diseases, amplifies the risk of depression, raises the cost of housing and increases energy consumption (Goux and Maurin, 2005[32]; Fondation Abbé Pierre and FEANTSA, 2024[33]).

Homelessness

Homelessness is a pressing issue in EU Member States. Estimates show that some Member States, such as Czechia, France, Germany and Ireland, have more than 25 homeless people per 10 000 inhabitants with figures rising in Ireland, Slovenia, Latvia, Austria and the Netherlands (OECD, 2024[34]). The root causes of homelessness are context specific. However, they typically include a combination of (i) structural factors, such as rising housing costs, labour market conditions and poverty, (ii) institutional and systemic failures that usually involve individuals becoming homeless after leaving an institutional setting such as foster care, the criminal justice system or hospitals, and (iii) individual circumstances such as eviction, loss of employment, health issues and domestic violence (OECD, 2024[35]). Homelessness carries many risks, such as health complications due to rough living conditions, as well as social isolation (Fondation Abbé Pierre and FEANTSA, 2024[33]). Depending on the country, between 60 and 93% of homeless people experience mental health issues over their lifetime, a much higher rate than among the general population. For example, in Germany, homeless people experience mental health problems almost 4 times more often than the general population (FEANTSA, 2023[36]).

Availability, accessibility and quality of services

The lack of services in proximity to where people live can significantly hamper residents’ quality of life. These services include, but are not limited to, different types of care (such as childcare, healthcare and elderly care), shops, physical and social infrastructure (such as public transport and parks), educational establishments and financial institutions (such as banks). Recent research shows that there are regional disparities in accessibility of services. For instance, services are harder to access in regions with lower incomes and in areas where there are fewer potential users of the service (Almeida et al., 2024[37]). A large variation in local availability of services can also be observed within cities with central neighbourhoods being generally better connected to services than peripheral areas (Bruno et al., 2024[38]).

How the social economy addresses housing issues

Social economy entities are active in housing in many ways

The social economy is active in many aspects of housing, including supply of quality housing, affordability, service provision and community development. Infographic 2.2. provides some examples of social economy entities’ involvement in the housing sector.

Infographic 2.2. Examples of ways social economy entities are active in housing

Some social economy entities are active in social and affordable housing provision, while others might fall outside of this scope. While social housing definitions vary across countries, social housing can be broadly defined as ”residential rental accommodation provided at sub-market prices that is targeted and allocated according to specific rules such as identified need or waiting lists” (OECD, 2020[39]). Social economy entities, or non-profit, limited-profit and co-operative organisations, are significant providers of social housing in the Netherlands (82% of the social rental housing stock), Austria (61%), France (53%) and Denmark (33%) (Figure 2.3). However, not all housing provided by social economy entities is social rental housing. For instance, limited-profit housing associations in Austria and Dutch housing associations provide some homeownership solutions and housing co-operatives can attract wealthier groups that may not meet social housing criteria in some definitions of social housing. Although the goal of most social economy entities is to provide affordable housing, which is defined as “rental and owner-occupied dwellings that are made affordable to households through a broad range of supply- and demand-side supports” (OECD, 2020[39]), not all social economy housing might be affordable for low income earners.

Figure 2.3. Provision of social rental housing by social economy entities in some EU Member States

Note: Data for Germany is not available, but in most states (Länder), the majority of social dwellings is provided by municipalities or other public institutions as well as housing co-operatives; in some states, private providers are responsible for a significant share of the social housing stock.

Source: OECD Affordable Housing Database (OECD, 2024[40])

Supply of quality housing

Social economy entities provide a large share of the housing stock in some EU Member States

In some EU Member States, social economy entities make up a large share of the housing stock and construct new housing units to help meet demand. As shown in Figure 2.4, non- or limited-profit organisations represent almost a third (32%) of the housing stock in the Netherlands, a quarter of homes in Austria and a fifth in Denmark. These entities also seek to increase the housing supply. For instance, housing associations in the Netherlands aim to build 250 000 new social housing units and 50 000 new rental homes by 2030 for those who are left out of the housing market but earn a high enough income to not qualify for social housing (Housing Europe, 2023[41]). Limited-profit housing associations in Austria built 16 800 new constructions in 2021 (GBV, n.d.[42]). The members of the Danish Federation of Not-for-profit Housing Associations have completed 4 629 units in 2021, or 13% of the total completed units in the country in that given year. In France, housing social enterprises annually construct half of all new social rental dwellings (Les entreprises sociales pour l'habitat, n.d.[43]). Figure 2.5 shows that housing co-operatives provide almost a quarter (24%) of the housing stock in Sweden, 16% in Poland, 14% in Norway, 12% in Czechia and Austria, 7% in Denmark and 5% in Germany.

Figure 2.4. Share of housing stock provided by non-profit or limited-profit organisations

Data from the latest available year

Note: Data is from 2022 for the Netherlands, from 2021 for Denmark and Ireland, from 2020 for Austria, Finland and France, and from 2019 for Slovenia. The figure for the Netherlands is based on the data provided by Aedes (the national network of social housing associations), for Austria on the number of homes managed by the members of the Austrian Federation of Limited-Profit Housing Associations, for Denmark on the number of occupied homes managed by not-for-profit housing associations, for Slovenia on occupied not-for profit rental housing, for France on the total housing stock data provided by Housing Europe and data from the French Union for Housing Social Enterprises, for Finland on rental apartments managed by the members of the KOVA association (association for non-profit rental housing companies and foundations) and for Ireland on the housing managed by Approved Housing Bodies (AHB).

Source: Housing Europe (2023[41]), Housing Europe (2021[44]), Aedes (n.d.[45]), Les entreprises sociales pour l'habitat (n.d.[43])

Figure 2.5. Share of housing stock provided by co-operatives

Data from the latest available year

Note: Data is from 2023 for Norway, from 2022 for Sweden, from 2021 for Czechia and Denmark, from 2020 for Austria, from 2019 for Portugal and Ireland, from 2018 for Germany, from 2017 for Italy, from 2013 for Poland and from 2011 for the Slovak Republic and Hungary. Data refers to the share of housing units managed by co-operatives. The figure for Czechia is estimated using the number of dwellings managed by organisations in the Union of Czech and Moravian Housing Co-operatives, which can be both privately owned and under co-operative ownership.

Source: Housing Europe (2023[41]), Housing Europe (2021[44]), Housing Europe (2017[46]), OECD calculations based on Cooperative Housing International (2024[47]), Cooperative Housing International (2020[48]) and GBV (n.d.[42]).

In Eastern Europe, co-operative housing has started to re-emerge in the form of innovative pilot projects. Co-operative housing was imposed and heavily supported by socialist governments to promote a “socialist way of life” and experienced a decline as a result of privatisation during the market transition (Coudroy de Lille, 2015[49]; Kulenovic and Maslauskaite, 2019[50]). Nowadays, while housing co-operatives are often viewed as relics of the socialist past, associated with prefabricated low-quality housing blocks on urban peripheries, innovative co-operative housing models have emerged such as the Nowe Żerniki project in Poland (Box 2.1) or the pilot projects in Croatia, Czechia, Hungary, Serbia, and Slovenia, supported by the MOBA European Co-operative Society (MOBA Housing, n.d.[51]).

Box 2.1. Nowe Żerniki (New Żerniki ) project in Poland

Nowe Żerniki was initiated in 2011 in Wrocław, Poland, as a collaborative effort between the local government, the Wrocław division of the National Chamber of Polish Architects and over 20 architectural firms. It is a mixed-use, socially and functionally diverse district designed to promote social cohesion. It combines self-build housing co-operatives, developer apartments, social rental housing and living facilities for older people, along with schools, nurseries, cultural venues and commercial spaces. The initiative draws inspiration from the 1929 WuWa exhibition of modern housing.

Innovative mechanisms

Perpetual land lease: Land was offered to co-operatives at 80% below market price in auctions limited to non-commercial entities. This significantly reduces initial investment costs for participants.

Community planning: Residents co-designed housing projects, promoting shared spaces like stroller rooms, bike garages and event rooms. This fosters collaboration and social ties among residents.

Integration with the local economy: Commercial spaces, such as cafés or dentist offices, were designed to be run by co-operative members, creating income streams for maintenance.

Impact

Two small co-operatives for four families and one for ten families have been built. Co-operative housing costs are lower than market-rate apartments in Wrocław due to reduced land acquisition costs and the absence of developer profit margins. The project integrates sustainable urban planning practices, emphasising walkability, local services and mixed-use spaces.

Source: Habitat for Humanity Poland (n.d.[52]), Heciak and Twardoch (2021[53]), Lis, Rataj and Suszyńska (2022[54])

Mutual societies1 play a role in providing affordable housing in France. For example Arcade-VYV, a collaboration established in 2019 between the mutual Groupe VYV and the housing specialist Arcade, houses over 400 000 people and builds 5 000 new homes annually (Groupe Arcade-VYV, 2023[55]). Meanwhile, Mutualité Française Grand Sud has developed two housing projects for students and one residence for older people (Mutualité Française Grand Sud, n.d.[56]).

Better use of existing housing stock

Social rental agencies (SRAs) are non-profit housing organisations that act as intermediaries between private landlords and vulnerable populations with housing needs. They lease housing units to sublet them to low-income individuals. SRAs negotiate lower rents with private landlords, providing long-term rent payments guarantee (9 years in Belgium) and dwelling maintenance. SRAs select tenants and take charge of administrative and property management procedures. SRAs can also link vulnerable individuals to supporting organisations such as addiction services and administrative bodies (FEANTSA, 2012[57]). The SRA model emerged in Belgium in the 1980s (Box 2.2), then spread to France and Germany, and more recently has been introduced in Czechia, Hungary, Poland, and the Slovak Republic (Kulenovic and Maslauskaite, 2019[50]).

Box 2.2. Social rental agencies (SRAs) in Wallonia (Belgium)

Social rental agencies (SRAs) act as intermediaries between private property owners and low-income tenants.

Innovative mechanisms

Incentives for private owners: SRAs select the tenants, manage all administrative tasks such as insurance and guarantee monthly rent payments. Owners enjoy tax benefits such as a full exemption from property tax (or a reduced 0.8% rate for legal entities instead of 1.25%) and an annual tax reduction equal to 5% of the expenditure on renovation if the property has been managed by the SRA for at least 9 years. Additionally, the Fonds du Logement de Wallonie offers 0% interest loans and non-repayable grants for renovating properties rented through the SRA model subject to the property being entrusted to an SRA for a minimum period of 9 or 15 years.

Priority housing allocation: SRAs offer quality housing to households in precarious situations or with modest to middle incomes. Eligibility is based on annual net taxable income, with thresholds ranging from EUR 17 000 to EUR 52 800 for individuals and EUR 23 200 to EUR 63 900 for households, plus EUR 3 200 per dependent child. In 2020, most SRA tenants (79%) relied solely on income from social welfare.

Support services: Tenants receive guidance from a social mediator to help them maintain their housing by offering personalised guidance on management and financial planning. In case of personal difficulties related to health or family issues, the tenants are referred to social services for additional assistance. SRAs also provide technical support for housing maintenance and repairs, ensuring safe and decent living conditions.

Impact

SRAs in Wallonia process over 20 000 housing applications annually, which exceeds the available SRA housing offer. In 2023, 33 SRAs operated in 253 out of 262 municipalities, managing around 9 000 properties. Between 2017 and 2020, the average rent for SRA housing was around half of the private market rate. SRAs have committed to attain A-level energy performance of their buildings by 2050.

Source: UWAIS (2024[58]), UWAIS (2024[59]), UWAIS (2024[60]), Piedboeuf (2023[61]), De Mesmaeker (2023[62])

Social economy entities sometimes play an active role in renovating and maintaining vacant buildings, increasing the availability of housing units. For instance, Community Land Trust Brussels has renovated former industrial or vacant premises to provide affordable housing (FEANTSA and Laudes Foundation, 2025[1]). In Italy, national law 80/2014 introduced a mechanism that allows public housing providers to enter into agreement with non-profit organisations to temporarily rent out and maintain public housing assets that require renovation. Such a partnership showed some success before the introduction of the law. ALER Milan, a public housing provider, launched a regeneration programme in 1999 targeting the abandoned Stadera public housing estate. As part of the programme’s Quattro Corti initiative, two co-operatives (Dar = casa and La Famiglia, later renamed Solidarnosc) can use public buildings for 25 years in exchange for the refurbishment and management of the premises using their own financial resources. The co-operatives refurbished 97 dwellings and inserted three elevators per building. The renovation significantly affected the costs and quality of living in Quattro Corti. For instance, the new heating system has decreased condominium fees, which often are one of the largest expenses for public housing residents since they do not depend on tenants’ incomes. The improvements will be maintained even when the buildings will return to the management of the public housing provider (Peverini, Bricocoli and Tagliaferri, 2023[63]).

The role of the social economy in inclusive employment and sustainable construction

Some social economy entities contribute to employment of vulnerable individuals in construction. In the ENSIE (European Network of Social Integration Enterprises) database of work integration social enterprises (WISEs), around a fifth (18%) carry out some activities related to buildings and public works (ENSIE, n.d.[64]). Although the activity of some of these WISEs expands beyond the construction of residential housing, some provide training, skills development and employment opportunities applicable to home construction. For instance, SBC Insertion is a WISE (une Entreprise de Travail Temporaire d'Insertion) active in Paris and its surroundings with a focus on construction, public works, cleaning, demolition, civil engineering and waste sorting. It supports individuals with low qualifications who face difficulties with social and professional integration through providing training and practical experience (SBC Insertion, n.d.[65]). The Kaja Kaona association in Mayotte (France) is a WISE that encourages sustainable grassroots construction (Box 2.3).

Box 2.3. Kaja Kaona association in Mayotte (France)

The Kaja Kaona association was established in Tsoundzou 1 (Mayotte, France) in 2017 at the initiative of local youth to facilitate work and social integration of 15–30 year-olds who are not in employment, education or training (NEET).

Innovative mechanisms

Support for youth work integration: The Kaja Kaona association organises different activities that encourage manual teamwork alongside offering individual support for its beneficiaries and workshops on basic knowledge, their legal rights and prevention.

Affordable housing offer: The Kaja Kaona association is a social rental agency (opérateur de l’intermédiation locative), which helps its beneficiaries access affordable housing options.

Sustainable construction practices: Since August 2022, the Kaja Kaona association has offered two work integration workshops focusing on sustainable construction and land use. The first workshop focuses on traditional building techniques using eco-friendly materials and the second on gardening and seedling production with an emphasis on permaculture. The beneficiaries can practice their skills by being involved in building and providing food for a restaurant in a local centre that will focus on training and accompanying young people to facilitate their long-term work integration.

Impact

The Kaja Kaona association has created 30 jobs in Tsoundzou 1, targets more than 300 beneficiaries and employs 16 employees in work integration per year.

Source Kaja Kaona (2025[66])

Social economy self-build projects seek to improve the skills of involved individuals while making constructed homes more affordable and community-centred. For instance, the Baugruppe (building group) system in Germany involves individuals coming together to design and construct their future homes, which allows them to tailor residential spaces to their needs and develop social ties. The building costs are also reduced because no real estate developer is involved (Florian, 2024[67]). The Nowe Żerniki project in Poland includes three self-build housing co-operatives inspired by the Baugruppe system (Habitat for Humanity Poland, n.d.[52]).

Additionally, some social economy entities are at the forefront of sustainable construction and demolition through using sustainable materials and adopting circular practices. For example, the Circle House project in Aarhus, Denmark, run by a housing association, is the world’s first social housing complex with the goal of being built according to circular principles (Box 2.4). The BauKarussell co-operative in Austria, in collaboration with other social economy entities, practices circular construction through safely demolishing buildings and reusing or recycling the materials for new construction (Box 2.5). La Borda housing co-operative in Barcelona (Spain) is made from pine wood and includes traditional open-air corridors that enhance energy efficiency. The sustainable practices adopted by the co-operative result in a lower-than-average energy consumption (66.37 kwh/m² vs 87.49 kwh/m² annually) (World Habitat Awards, 2019[68]). The Brf Viva co-operative in Gothenburg, Sweden uses an innovative type of concrete with a 30% lower carbon footprint than traditional alternatives (Housing Europe, 2023[41]).

Box 2.4. The Circle House project in Lisbjerg (Denmark)

The Circle House project is the world’s first social housing complex with the goal of being built according to circular principles. It was initiated in 2017 in the Lisbjerg village, north of Aarhus, Denmark’s second largest city. It has received DKK 9.9 million (Danish kroner) (around EUR 1.3 million) in public and philanthropic investment. The project was expected to be completed by mid-2023. However, due to the withdrawal of the contracted construction company, a two-year break had to be taken until a new one was found. A pilot unit was built in 2020 to present the project to the general public.

Innovative mechanisms

A pilot of circular construction: The Circle House project uses innovative circular construction materials such as recycled plastic tiles from household waste and expanded cork boards for the façade. Circle House is expected to serve as a scalable demonstration project on circular construction.

Cross-industry collaboration: The project involves a wide range of public, private and social economy organisations. It is being managed by the Lejerbo housing association and was designed by four private architectural companies. The design phase also involved some building companies for engineering and demolition aspects and consulted the City of Aarhus. In total, the project involves more than 30 companies in the Danish construction sector.

Impact

The project consists of 60 social housing units managed by the Lejerbo housing association. The residential complex comprises a mixture of two and three storey terrace houses and five storey tower blocks. There is a total 100m² of shared facilities and a communal garden. The objective of the project is to construct the complex with 90% reusable building materials, which reduce CO₂ emissions. For instance, precast concrete structures cut emissions by 45%.

Source: GXN Innovation (2018[69]), Dueholm (2024[70])

Box 2.5. BauKarussell co-operative in Austria

BauKarussell co-operative is the first Austrian provider of dismantling services with the aim to recover materials for reuse or recycling. BauKarussell supports companies through the tendering process and coordinates actions such as dismantling, upcycling and recycling used materials with social economy partners who employ and offer training for disadvantaged individuals.

Innovative mechanisms

Social urban mining approach: Social economy partners carefully remove pollutants and impurities, enabling safe demolition and the recovery of high-quality reusable and recyclable materials. This process allows to sort materials by type, increasing energy efficiency and the value of the recovered resources. Social economy entities also contribute to work integration by employing and offering training for vulnerable individuals.

Open book model: Customers receive revenues from the sale of reusable or recyclable materials. To ensure full transparency, all impact indicator results, such as revenues, material volumes and working hours are openly shared.

Impact

Since 2017, the co-operative has participated in 11 renovation projects. As of January 2025, 786 tons of building materials, elements and furniture have been reused, 586 tons have been processed by regional waste disposal companies, and 454 tons have been directed to material recycling. In addition, BauKarussell has created 37 000 hours of employment and qualification opportunities in social economy organisations.

Source: (BauKarussell, n.d.[71]), (BauKarussell, n.d.[72])

Quality and sustainability of housing provided by social economy entities

In some countries, social economy entities seek to maintain a high-quality living environment. Housing associations in the Netherlands are legally required to provide liveable, safe and decent-quality housing. Many housing associations go beyond this requirement as rent is set based on housing quality and investments in structural quality reduce future maintenance costs (van Deursen, 2023[73]). More broadly, research shows that housing co-operatives, such as grant-of-use co-operatives in the Region of Catalonia (Spain), tend to create a greater sense of community, decrease loneliness, increase access to services such as care and facilitate physical, emotional and financial security (Carrere et al., 2020[74]; Reyes et al., 2022[75]).

They also seek to reduce their carbon footprint by improving energy efficiency and using renewable energy sources. For instance, in Austria, LPHAs are engaging in building retrofitting, installation of solar panels, as well as trainings and information campaigns on efficient energy use. Only 4% of properties owned by LPHAs constructed before 1980 have not undergone retrofitting or thermal insulation compared to around 40% in the general housing stock. Some housing co-operatives in Czechia offer trainings on energy efficiency, provide information on how to access state subsidies and engage in the retrofit of buildings (Housing Europe, 2023[41]). The social housing stock in the Netherlands, 82% of which is provided by non-profit housing associations, performs better on energy efficiency than the overall housing sector: three quarters of the social dwellings have a rating of C or above, while this share is 69% for owner-occupied and 65% for private rental segments (OECD, 2024[40]; Housing Europe, 2023[41]). Moreover, almost a fifth (16%) of social housing units run by housing associations have installed solar panels. The Brf Viva co-operative in Gothenburg, Sweden has introduced a bike and car sharing scheme and started using old batteries from buses to store solar energy (Housing Europe, 2023[41]).

Access to affordable housing

Some social economy entities active in housing have an innovative financial model

Social economy entities typically adopt a cost-based rent setting approach, which usually results in lower cost of housing than among other private providers. This approach is adopted by housing associations in Austria (Box 2.6), Denmark and Finland, as well as some co-operatives and involves setting rents at levels to cover the costs of providing housing, such as the repayment of loans, building maintenance and insurance (Pittini, Turnbull and Yordanova, 2021[76]). In Austria, limited-profit housing associations (LPHAs) charge rents that are 20% lower than among other private providers (Klien and Streicher, 2021[77]). In Helsinki, Finland, rents charged by private providers are 62% higher than cost-based social rents (Pittini, Turnbull and Yordanova, 2021[76]). In France, Mas Coop in Beaumont-sur-Lèze adopts a cost-based rent-setting approach and charges EUR 11.77/m² in total (EUR 7.79/m² in rent and EUR 3.98/m² in savings that can be taken out in 30 years) compared to the local average rent of EUR 12/m² (Mas Coop, 2025[78]; SeLoger, 2025[79]).

Box 2.6. Limited-profit housing associations in Austria

Limited-profit housing associations (LPHAs) emerged in Austria at the end of the 19^th century and in 2021 owned or managed around a million dwellings that are rented, owner occupied or are part of municipal housing. Around half (54%) of the associations take the form of limited liability or public limited companies and the other half (46%) are co-operatives.

Innovative mechanisms

Cost-based rent setting: LPHAs cannot set rents that are above or below the costs of construction, maintenance and financing of their buildings. Rental dwellings for which the cost of financing has been paid off are under permanent rent control, with rents usually set at below the cost-rent.

Allocation: LPHAs allocate their housing units based on a mix between social criteria (used in allocation of municipal housing) and market criteria (used by the private sector). LPHAs are aimed at broader population groups than municipal housing but low- and middle-income households still have priority. If an LPHA is publicly funded, it needs to allocate a certain share of its units to low-income priority groups.

Profit reinvestment and revolving funds: LPHAs cannot distribute profit to owners and must reinvest them into construction. The shares in LPHAs can only be traded at the nominal price of the initial investment.

Impact

The cost-based rent setting results in approximately 20% cheaper rents than in the private sector. The affordability gap between LPHAs and private dwellings has been widening over the past few years, with a particularly large difference in urban areas. The prices of dwellings sold by LPHAs are estimated to be 12% less expensive than in the private sector. LPHAs are also actively engaged in renovation of the old building stock. Only 4% of the buildings owned by LPHAs built before 1980 have not benefitted from renovation and insulation measures compared to 40% for the general housing stock. Overall, LPHAs are estimated to add up to EUR 980 million annually to the Austrian economy.

Source: GBV (n.d.[42]), Klein and Streicher (2021[77]), Housing Europe (2023[41]), Pittini, Tumbull and Yordanova (2021[76])

Housing quality and size are set as basis for rents by some social economy entities. Housing associations in the Netherlands, for instance, are subject to regulated rent limits, which are determined through the Home Valuation System. The system allocates points to a home based on quality indicators, which are then converted to a maximum rent (van Rijn, 2024[80]). In Slovenia, non-profit rents are calculated based on a formula that takes into account the property value (determined by elements such as living space and the technical state and quality of the dwelling) and its location. A proposed reform envisages the transition to a cost-based rent system (OECD, 2023[81]). In la Borda housing co-operative in Barcelona (Spain), the monthly contribution is based on the size of the apartment and the cost of the communal areas (World Habitat Awards, 2019[68]). The rent is EUR 8.71/m², which is cheaper than private rentals in the area (around EUR 11/m²) but more expensive than public housing (around EUR 7.85/m²). The monthly contribution will decrease to around EUR 5.86/m² once the co-operative’s loans are repaid (World Habitat Awards, 2019[68]). In Czechia, the monthly rent paid by residents of housing co-operatives is determined by the dwelling’s floor area (OECD, 2021[82]).

Social economy housing providers can decrease local average private rents. Research from Austria shows that a 10% increase in the share of non-profit housing associations in a region is associated on average with 30-40 cent lower rents per square meter in the non-regulated rental sector. The presence of limited-profit housing associations results in on average 5% cheaper rents in the non-regulated rental segment. It does so through encouraging private providers to compete with LPHAs (Klien et al., 2023[83]).

Some social economy housing entities offer ownership solutions. For instance, around one third of homes managed by LPHAs are in individual ownership (Koessl, 2022[84]). In 2021, Dutch housing associations sold 5 600 social units, with 4 400 units (around 80%) going to existing tenants. This creates opportunities for first-time buyers and provides equity for the development of new social rental housing (van Deursen, 2023[73]). The Accession Solidaire association in France (part of the Habitat et Humanisme federation) offers a scheme to low-income first-time home buyers. It mobilises funds by issuing bonds to its network of over 2 000 subscribers. Once the bonds mature, they are either repaid, reinvested in another project or donated to the association to benefit from tax advantages. The raised funds are used to offer interest-free loans to low-income first-time homebuyers. This innovative financial mechanism reduces the homebuyers’ debt-to-income ratio, which allows households who previously could not afford to buy a home, to do so (Habitat et Humanisme, n.d.[85]).

Although in contrast to condominiums, units in housing co-operatives cannot be owned, ownership co-operatives allow inhabitants’ shares to be sold at market value. This housing co-operative model is common in Norway, Poland, Sweden and the US (Infographic 2.3). The yearly cost of such housing is often lower than the market value. For instance, in Sweden, in 2021, the median yearly cost of housing in co-operatives was SEK 73 000 (around EUR 6 500), compared to SEK 77 000 (around EUR 6 800) for rented apartments and SEK 86 000 (around EUR 7 600) for owner-occupied apartments (Statistics Sweden, 2021[86]).

Infographic 2.3. Different types of housing co-operatives

Source: Based on Cooperative Housing International (n.d.[87]), Cooperative Housing International (2020[88]), Cooperative Housing International (2020[89])

Social economy entities often adopt a diversified financial model that allows them to provide long-term affordable housing with limited direct government support. The financial model of social economy housing entities usually consists of revolving funds from rental income, long-term loans from private and public institutions, and equity from unit sales or tenants’ deposits. For example, Dutch housing associations use revolving funds of rental income for their operations and fund the construction of new housing using excess rental revenue, equity from unit sales and long-term loans from private institutions backed by a government guarantee (van Deursen, 2023[73]). Austrian housing associations mainly rely on public and bank loans, with public grants making up only 5% of funding. The funding for Danish housing associations mainly comes from loans provided by mortgage institutions guaranteed by the state and municipal loans. Private loans with state guarantee are the main financing option for Finnish housing associations (Pittini, Turnbull and Yordanova, 2021[76]). Housing social enterprises in France get only around 7% from public subsidies, with the majority of the funding (almost 80%) coming from public and private loans (Sénat, 2019[90]). In Slovenia, the National Housing Fund that supports non-profit housing associations, has not received any public contributions from 1991 to 2023. In 2023, the Fund received a public capital injection of EUR 25 million and currently relies on funds from the state budget, domestic and foreign grants, own revenues from financial investment, rental income and apartment sales, as well as long-term loans and guarantees (Ziemann, 2024[91]; OECD, 2023[81]).

Housing co-operatives, such as Mas Coop in Beaumont-sur-Lèze (France) (Box 2.7), are typically financed by bank loans, initial contributions, grants, monthly membership fees and member as well as non-member savings or shares. For instance, some housing co-operatives in Germany have savings institutions that offer their residents investment products with higher interest rates than those proposed by commercial banks. The funds are used to finance new construction and maintenance of existing buildings (Kulenovic and Maslauskaite, 2019[50]). Sostre Civic, an umbrella organisation for co-operative housing projects in Catalonia (Spain), offers its members and non-members to buy shares to support a specific housing development (Sostre Civic, n.d.[92]). HSB Riksforbund, one of the two largest developers and managers of housing co-operatives in Sweden, offers savings accounts for non-residents to move up in the waiting list. In 2021, there were more than 120 000 savers on the HSB lists who contributed SEK 4.3 billion (Swedish kronor) (around EUR 280 million). The funds are primarily used to build new housing co-operatives (Thompson, 2023[93]).

Box 2.7. Mas Coop intergenerational housing co-operative in France

Mas Coop is a housing co-operative created in 2015 by a group of households in Beaumont-sur-Lèze, near Toulouse. It comprises 11 eco-friendly houses, a communal building and a shared garden. It accommodates 29 residents aged between 1 and 74.

Innovative mechanisms

Affordability for low-income groups: Residents must be eligible for social housing. Each member of the co-operative must make an initial financial contribution equivalent to 20% of the cost of their future home. If some co-operative members bring in more than required, other households can pay less. Moreover, the general assembly can decide to lower the monthly contributions for residents in financial difficulty, if other members agree to pay more.

Diversified financial model: Mas Coop is financed by a bank loan, grants, initial contributions and monthly membership fees. The project received a state-backed loan (prêt locatif social) of EUR 2.07 million from a commercial bank and some grants from private and state actors. Alongside the initial contribution, each resident must pay a monthly membership fee, which is divided into two parts: a rental part and a savings part. The rental part covers the costs of the co-operative, including the loan interest repayment. The savings part goes to a fund that covers major works, unexpected move-outs, unpaid rent and the repayment of the bank loan principle. When a member leaves the co-operative, Mas Coop reimburses their initial contribution, but the savings part cannot be taken out for 30 years. Furthermore, to help pay for unforeseen costs, the co-operative decided to allow non-residents to support the project by buying shares in the co-operative.

Intergenerational resident involvement: All members of the co-operative participate democratically in the decision-making process of the residents’ council. Moreover, the complex hosts couples, families with children and seniors, who help each other with daily tasks such as grocery shopping and bringing children to school. The inter-generational aspect is facilitated through the availability of different-sized apartments, allowing residents to move throughout their lifetime based on their needs.

Green innovation: The project incorporates a bio-climatic design, using bio-sourced and natural materials whenever possible for the construction of the dwellings. All buildings and communal spaces are energy efficient, requiring no air-conditioning and minimal heating. Roofs are leased to a solar energy co-operative (SCIC Citoy'enR), contributing to the energy needs of the buildings.

Impact

Mas Coop apartments charge below-market rents. In Beaumont-sur-Lèze, average rent reaches EUR 12/m². Mas Coop apartments are priced at a more affordable EUR 11.77 /m² (EUR 7.79/m² in rent and EUR 3.98/m² in savings that can be taken out in 30 years). The shares are regulated and are not directly related to the value of the property, which makes speculation impossible. Moreover, Mas Coop has been awarded the “NoWatt Building” label in recognition of its low carbon footprint.

Source: World Habitat Awards (2023[94]), Mas Coop (2025[78]), SeLoger (2025[79])

Long-term affordability of social economy housing is also facilitated by restrictions on the resale of shares and land. Many ownership housing co-operatives place conditions on the resale of shares, such as restrictions on the share price or quantity that can be sold, to prevent speculation and maintain the affordability of their housing offer (Cooperative Housing International, n.d.[87]). Moreover, as land value significantly influences the housing price, community-land trusts (CLTs) make housing more affordable through decoupling the value of land from buildings2 and restricting land re-sale (Infographic 2.4). In Europe, there are currently more than 500 Community Land Trusts, mainly in Belgium (Box 2.8), Ireland, the Netherlands, Spain and the UK (Community Land Trust Network, n.d.[95]; Foncier Solidaire France, n.d.[96]; European Community Land Trust Network, n.d.[97]).

Infographic 2.4. How do community land trusts work?

Source: Based on European Community Land Trust Network (n.d.[97])

Box 2.8. Community land trust Brussels (Belgium)

Community land trust Brussels (CLTB) consists of a non-profit association and a public utility foundation providing affordable housing to households with low-income backgrounds by decoupling the value of land from property and managing it in the interest of the community.

Innovative mechanisms

Decouple buildings and land to maintain affordability: The Community land trust (CLT) separates the value of land from property. CLTB residents buy the property and the CLT owns the land. The non-profit and community-centered nature of CLTB ensures that the land and the property remain affordable. Mortgages for CLTB residents are financed by Fonds du Logement, the main provider of social mortgages in the region, which sells CLTB properties and grants reduced mortgage rates to CLTB residents.

Limits on owners’ income and resell conditions: To be eligible for CLTB housing, future owners must register as members on the CLTB website and meet the income limits set by social housing regulations. Homes can be resold, but only at a limited price that allows sellers to recover their investment plus a limited margin, ensuring long-term housing affordability.

Resident involvement: All CLTB housing consists of multi-unit buildings managed by residents who make up one third of the CLBT and foundation administration. At the beginning of a new housing project, a group of future owners is selected to participate in designing, planning and developing the project. This groups meets regularly and receives training on co-ownership, energy efficiency and collective decision-making.

Sustainable initiatives: All new CLTB built housing units meet passive energy standards. The organisation includes sustainability clauses in construction tenders, advocates for reduction in parking spots, and promotes the use of shared bikes. CLBT aims to achieve a minimum energy rating of C for its buildings. CLTB also offers trainings to its residents on how to use sustainable technologies.

Impact

CLTB has completed five housing projects, providing housing to 450 people in 103 homes. The housing model results in homes that are, on average, 40% more affordable than market alternatives. The final cost of the house depends on the household’s income ranging from 50% more affordable for the lowest-income households to 20-30% more affordable for higher-income eligible groups.

Source: World Habitat Awards (2021[98]), CLBT (2024[99]), CLBT (2024[100])

CLTs served as an inspiration for other models that decouple buildings from the land that they are on. For instance, in France, the Organismes de foncier solidaire (OFS) are entities recognised by public authorities that separate land and property ownership to provide affordable housing but have less emphasis on long-term community involvement than CLTs (Community Land Trust Network, European CLT Network and Dark Matter Labs, 2025[101]). An OFS buys land and allows developers to build and market homes under a special lease (bail réel solidaire). The residents, who can be owners or renters, pay for their dwelling and land separately. Since the land is under a long-term lease (usually 18-99 years long), which regulates the re-sale of the property on the land and limits speculation, the total monthly payments are cheaper than under traditional homeownership or rental (Foncier Solidaire France, n.d.[102]).3 For instance, Grand Delta Habitat established La Coopérative Foncière Méditerranée to make homeownership more affordable. The potential inhabitants buy only the building, whereas land is owned by the co-operative. This reduces the price by 20-50% in Côte d’Azur. In l’Isle-sur-la-Sorgue (Vaucluse department), Grand Delta Habitat is selling homes at EUR 3 320/m², a quarter below the market price. The owner, in turn has to pay EUR 1.63/ m² to the co-operative, which is an OFS. There are limits on resale capital gains and income ceilings for (potential) owners (Housing Europe, 2025[103]).

Inclusion of specific or vulnerable groups

Social economy housing is often available to a wide range of potential residents, creating opportunities for interactions between different groups. For example, in Austria limited-profit housing associations allocate housing based on social and market criteria, prioritizing low-income individuals. This approach results in a greater share of middle-income residents than in municipal housing (Klien and Streicher, 2021[77]; Angel and Mundt, 2024[104]). In Denmark, there is no income criteria to sign up for the non-profit housing waiting list but one in four apartments are reserved for those with unmet housing needs and are allocated by municipalities (BL, n.d.[105]). The Feld4 housing co-operative in Basel (Switzerland) offers apartments of different sizes to meet different lifestyle and living arrangement needs. The building was constructed to facilitate minimal interventions if a change in apartment size is needed (ArchDaily, 2024[106]). In Germany, the NettelbeckPlatz project in Berlin, implemented as part of the Affordable Housing Initiative European Partnership, renovated the Housing Cooperative Berliner Bau- und Wohnungsgenossenschaft von 1892 eG to include apartments that can be adapted to different groups (SHAPE, n.d.[107]).

Groups that struggle to access suitable housing, such as students, homeless individuals and seniors, are typically the focus of social economy housing entities. For instance, in Finland, non-profit rental housing associations target vulnerable groups, such as individuals experiencing homelessness, youth and older people (Pittini, Turnbull and Yordanova, 2021[76]). Riksbyggen co-operatives in Sweden have schemes that allow young households to buy a home after renting for four years (Housing Europe, 2024[108]). The Studentendorf Schlachtensee eG in Berlin (Germany) manages around 1 300 residential units for students and young professionals (Studentendorf Schlachtensee, n.d.[109]). The Global Financial Crisis led to the emergence of social housing co-operatives in Spain, mainly in the form of co-housing for seniors (Ahedo, Hoekstra and Etxezarreta, 2021[110]). The Chamarel les Barges co-operative near Lyon (France) is also aimed at older individuals (Chamarel, n.d.[111]).

Social economy entities play a significant role in reducing homelessness by providing both long-term affordable housing and emergency accommodation. There are many examples of proactive and innovative actions led by SSE entities. For instance, the Habitat et Humanisme association (Box 2.9) builds, buys and renovates buildings to house vulnerable individuals. Moreover, the association mobilises private housing providers to offer housing for those in difficulty in exchange for managing their property, ensuring consistent rent payments and some fiscal advantages for the landlord. The association also provides emergency accommodation. The Provivienda association in Spain aims to reduce homelessness through adopting a Housing First approach by mediating between individuals in need of housing and private landlords. The organisation has managed more than 68 000 housing units in over 30 years of its operations (Provivienda, n.d.[112]). The negotiated rents are about a fifth lower than market rents while remaining attractive for landlords, especially those with vacant properties (OECD, 2024[35]). No Permanent Housing association (Vva ry) in Finland manages the country’s first housing service based on the Housing First principle in Helsinki. The association also runs a temporary accommodation unit (Vva ry, n.d.[113]). The Casa Ioana association in Romania offers rooms monitored by a security company in the centre of Berceni to women and children affected by domestic violence and/or homelessness (Casa Ioana, n.d.[114]).

Box 2.9. Habitat et Humanisme federation

Habitat et Humanisme is a federation of 59 associations operating across 87 French departments, Belgium and Luxembourg. It provides tailored housing solutions for vulnerable groups, offers them a range of personal services and aims to strengthen social ties and cohesion.

Innovative mechanisms

Tailored and affordable housing options: Habitat et Humanisme provides housing for socially isolated and vulnerable individuals that offer communal living with close social support, intergenerational housing, housing for seniors and people with disabilities to promote their autonomy, as well as youth residences. Emergency accommodation is aimed at vulnerable individuals such as refugees and individuals experiencing homelessness. These initiatives are complemented by community centres that facilitate social inclusion by strengthening ties among residents and with the local population.

Social support: Habitat et Humanisme combines housing solutions with personalised social support to facilitate vulnerable individuals’ autonomy, dignity and social integration. It has more than 140 staff members and over 2 000 volunteers who receive continuous training to provide individual and tailored assistance such as helping residents with daily life tasks, navigating social services, accessing healthcare and other administrative procedures.

Sustainable housing renovation: Habitat et Humanisme aims to improve the quality and energy efficiency of its housing stock. The association seeks to accelerate energy renovations both in their own properties and in those entrusted by solidarity landlords. To achieve this, they support landlords in meeting new legal standards through renovation advice and guidance, while providing education to tenants on sustainable housing practices to reduce energy costs.

Impact

The association offers more than 11 000 housing units, either owned by the association or provided by solidary landlords. In 2023, the association provided housing to 2 030 families and emergency accommodation to 2 740 individuals. Three quarters (74%) of newly-housed families were below the poverty line, compared to 32% in general social housing. In terms of housing affordability, Habitat et Humanisme rents in the 10^th arrondissement in Paris averaged EUR 6.6/m²/month, compared to EUR 8.5/m²/month for social housing and EUR 25/m²/month in the private market.

Source: Habitat et Humanisme (2025[115]), Habitat et Humanisme (n.d.[116]), Habitat et Humanisme (2024[117])

Proximity services and community development

Proximity services

Social economy housing entities often provide different types of care for its residents. For instance, Habitat et Humanisme Soin in France, in 2023, directly managed 35 homes with specialised units and temporary accommodation and assisted in the management of 21 homes for dependent older persons. It offers care services that aim to maintain dependent persons in their homes while encouraging autonomy and social integration (Habitat et Humanisme Soin, 2024[118]). Mutualité Française Grand Sud has developed residences for older persons. For example, their means-tested residence for seniors in the new Grisettes eco-district in Montpellier is part of a service centre with a care facility, nursery, medical centre and a centre for social activities (Mutualité Française Grand Sud, n.d.[119]). Co-operative Housing Ireland provides early years education and childcare for school-aged children to its members and the wider residents of East Wall, Dublin. It does so by partnering with Co-operative Childcare Island Key, which provides affordable and quality care (Co-operative Housing Ireland, 2024[120]). The Nowe Żerniki complex in Wrocław, Poland, alongside self-built housing co-operatives, developer apartments, social rental housing and living facilities for older people, offers schools and nurseries (Nowe Żerniki, n.d.[121]). The Provivienda association in Spain, focused on reducing homelessness, offers social support services and residential emergency care (Provivienda, n.d.[112]).

Intergenerational housing offered by some social economy organisations creates opportunities for personal service provision and encourages socialisation. For example, the Mas Coop co-operative in Beaumont-sur-Lèze, France, encourages different types of households to live in the co-operative, including couples, families with children and older people to help each other with daily tasks such as grocery shopping and bringing children to school (World Habitat Awards, 2023[94]). In the WZCHumanitas long-term care centre, a public benefit foundation in Deventer, the Netherlands, students can live free of charge in exchange for spending at least 30 hours per month interacting with older residents through organising events and sharing meals, among other activities (WZC Humanitas, n.d.[122]).

Some non-profit organisations combine access to housing with financial education, employment support and legal advice. The Homelab pilot projects in Czechia, Hungary, Poland and the Slovak Republic take the social rental agency model further by offering employment support alongside affordable housing (Box 2.10). The Casa Ioana association in Romania provides temporary accommodation to women who have experienced domestic violence and homeless individuals. This offer is complemented by psychological support alongside help with creating a safety plan, legal support, access to social benefits and communication training, among others, with the goal of facilitating the beneficiaries’ safety and helping them to find employment (Casa Ioana, n.d.[114]).The HERO project aims to empower Roma communities in small- and medium-size municipalities in Bulgaria, Romania and the Slovak Republic. Non-profit organisations, in partnership with social banks and local authorities provide financial literacy training, employment assistance and access to saving schemes. The goal is to provide the beneficiaries with a microloan to be used to self-construct or improve their home. The project aims to have a lasting impact on local communities through spurring economic development and social cohesion (HERO, n.d.[123]).

Box 2.10. HomeLab social rental enterprise pilot projects in Eastern Europe

The HomeLab project seeks to implement the social rental enterprise (SRE) model through five pilots in Czechia, Hungary, Poland and the Slovak Republic. This project was financed by the European Commission under the EU Programme for Employment and Social Innovation (EaSI). The project targeted individuals and families at risk of poverty and social exclusion, particularly those living in unfavourable conditions or without access to housing.

Innovative mechanisms

Interlinked housing, employment insertion and social services: SREs are based on the social rental agency (SRA) model and act as mediating agents that connect private landlords with vulnerable individuals who cannot access housing. In addition to housing, SREs offer employment insertion and social services such as job counselling, individualised training and social support. These initiatives aim to improve labour market outcomes among the beneficiaries and thereby facilitate their long-term access to housing.

Partnership with the social economy: The HomeLab pilot projects relied on a strong partnership between the local governments and civil society organisations. Non-governmental organisations (NGOs) provided tailored support to vulnerable groups and helped municipalities with beneficiary identification and outreach.

Impact

HomeLab pilot projects supported 82 households in Hungary (17 in Budapest and 65 in Veszprém), 62 households in Poland, 53 households in Czechia and 46 households in the Slovak Republic. The rent prices vary depending on the role of the SRE. The SRE can act as the manager of the municipal social housing stock and/or be the mediator between beneficiaries and private landlords. For instance, SREs in the Polish pilot project assumed the mediator role and provided full flat management, which allowed to reduce the rent price by 10-20%. The services offered by SREs ranged from negotiating with employers to supporting the beneficiaries in the job application process, resulting in formal employment for 37 households in the Slovak project, 36 in the Hungarian, 21 in the Polish and 15 in the Czech project.

Source: HomeLab (2019[124]), European Social Fund Plus (2022[125])

Access to local shops

Some entities facilitate access to food and other goods by locating grocery shops or cafes, often run by social economy organisations, inside or close to their buildings. For instance, the Social Commissary (L’Economat), an associated work co-operative selling organic products, is located on the ground floor of the Cirerers project in Barcelona, Spain, developed by the Sostre Civic co-operative (Sostre Civic, n.d.[126]). La Chalmeta, another housing co-operative in Barcelona, Spain, offers its ground floor space to Keras Buti, a food consumption co-operative that promotes the consumption of local and organic food (La Chalmeta, n.d.[127]). The Nowe Żerniki complex in Wrocław, Poland, that includes self-build housing co-operatives, has commercial spaces such as supermarkets and cafes inside it (Nowe Żerniki, n.d.[121]).

Community engagement and development

Social economy housing entities usually have participatory governance, with residents having a say in key decisions such as the budget, house rules and renovations. For instance, in Denmark, non-profit housing associations have a board with tenant representatives, who collectively make decisions (BL, n.d.[105]). In the Netherlands, some housing associations consult tenants and local residents before implementing significant changes. For example, the Eigen Haard association consulted stakeholders before renovating one of its buildings. During several meetings, children were given the possibility to draw their dream streets and their vision of the future neighbourhood. The resident committees in the neighbourhood were also involved in planning the social aspects of the development, such as the allocation of relocation allowances (Eigen Haard, 2023[128]). In France, local authorities and tenant representatives are board members of housing social enterprises and are elected from lists compiled by associations active in the housing sector (Les entreprises sociales pour l'habitat, n.d.[43]). Almost half (46%) of LPHAs in Austria take the form of a co-operative, which encourages tenant participation by allowing them to elect the board and vote on key decisions (GBV, n.d.[42]). The residents were involved regularly in the NettelbeckPlatz project in Berlin that included a housing co-operative. This led to substantial changes to the renovation plan, including the transformation of the ground floor to shared spaces for the whole community (SHAPE, n.d.[107]). Community land trusts have democratic governance, which involves residents, the private sector, public authorities and the local community who does not live on the land (Community Land Trust Network, European CLT Network and Dark Matter Labs, 2025[101]). The participatory aspect of social economy entities usually makes their housing quality often better than public or other private alternatives (Kulenovic and Maslauskaite, 2019[50]).

They also facilitate community development by providing shared spaces and organising social activities. Housing associations in Denmark are responsible for the social activities among their residents (Bican, 2020[129]). For example, residents of the Lejerbo housing association in Nyborg have started and run social activities such as gymnastics and sewing in the Origo community centre with the support of social housing staff (Lejerbo, 2025[130]). The 2022 amendment of the Housing Act allowed Dutch housing associations to pursue projects focused on increasing social interactions. For instance, housing associations like Alliantie and KleurrijkWonen engage in neighbourhood revitalisation, while encouraging resident-led initiatives such as community gardens and clean-up days (Den Boer, 2023[131]). One of the core action areas of the Habitat et Humanisme federation, alongside providing affordable housing, is to combat the isolation of vulnerable individuals and contribute to social cohesion (Habitat et Humanisme, n.d.[116]), For example, the federation organises a yearly ‘solidarity hour’ campaign in France to raise awareness about volunteering and solidarity with vulnerable individuals. It spans over a week with more than 30 ambassadors from the artistic, sports or culinary spheres giving an hour of their time to share their skills with individuals housed by the association. This initiative aims to promote volunteering opportunities, which can be a powerful catalyst for local development through revitalizing neighbourhoods, improving social cohesion and increasing community resilience (Habitat et Humanisme, 2024[132]; OECD, 2024[133]).

Challenges social economy housing entities face

Despite their positive impact, social economy housing entities face a number of challenges that prevent them from scaling and addressing the needs of vulnerable households while minimising their environmental footprint. These barriers include: (i) lack of an enabling legal framework, (ii) unaffordable land, (iii) balancing affordability with financial and environmental sustainability and (iv) limited long-term finance options to scale.

Lack of an enabling legal framework

In some countries, existing legal frameworks specific to the social economy in housing or related to housing more broadly present significant barriers that prevent social economy housing entities from effectively developing and expanding their reach. These legal restrictions may include absent or outdated regulations, restrictive zoning laws, or a lack of supportive policies that recognise and facilitate the unique nature of social economy housing initiatives. As a result, these entities often face challenges in acquiring land, accessing funding, or gaining official approval for projects, which hampers their ability to address housing shortages and provide affordable and sustainable housing solutions for vulnerable populations. For example, in Poland, the Co-operative Law Act of 16 September 1982 and the Housing Co-operatives Act of 15 December 2000, under which housing co-operatives operate, have been amended over 20 times, causing uncertainty in the sector (Cooperative Housing International, 2020[88]). Although Slovenia has a general law on co-operatives and a housing law, it lacks a regulatory instrument for housing co-operatives. This makes it very difficult for a potential housing co-operative to acquire land at below market price and access public support mechanisms (Ramšak, 2023[134]). Hungary and Croatia also do not have legal instruments dedicated to rental housing co-operatives (Džokić and Ramšak, 2022[135]).

Unaffordable land

The lack of access to affordable land is one of the main factors hampering the development and scaling of non-profit housing providers, especially in urban areas with higher residential land scarcity and price. For instance, in Slovenia, the need to acquire land at market rates coupled with limited profitability hinders investment in social housing and limits the presence of not-for-profit housing providers (Ziemann, 2024[91]). The increases in land costs, especially in urban areas, make building new co-operatives in Sweden more difficult (ILO, 2025[136]). The lack of access to affordable land, among other factors, hinder social economy housing entities from meeting the growing demand for housing. For example, in at least 90 of 344 Dutch municipalities the waiting time for social housing, 82% of which is provided by housing associations, is longer than 7 years and in 5 municipalities, it exceeds 17 years (Eurofound, 2023[137]).

Balancing affordability with financial and environmental sustainability

Social economy housing entities can find it difficult to keep their housing affordable and inclusive while ensuring that they are financially and environmentally sustainable. Striking this balance is particularly difficult due to increases in construction costs and interest rates. For instance, LPHAs in Austria finance around half of their new construction with private loans, which means that interest rate increases raise the cost of construction. Moreover, from 2020 to 2022, the cost of materials increased by 38%, which made some LPHAs postpone their construction projects (Housing Europe, 2023[41]). The higher construction costs, in the absence of public support, are likely to be passed on to tenants in the form higher cost of housing or prevent social economy entities from building new homes in response to growing demand.

While the financial model of social economy housing entities can contribute to their financial sustainability and result in lower-than-market rents, it might make housing unaffordable for some low-income households. The cost-based rents can be too high for some individuals, especially if construction and financing costs increase. Moreover, downpayments and resident participation required by some social economy housing providers might make it less accessible to low-income households. For example, housing associations in Austria and many housing co-operatives across EU Member States such as Germany and France require a downpayment before moving in, which, in combination with the need to engage in collective decision-making, can be a barrier for low-income and vulnerable households to benefit from social economy housing (OECD, 2023[81]; Lang and Novy, 2013[138]; Laine et al., 2018[139]).

In some countries, the sale of housing units managed by housing associations or ownership co-operatives might benefit wealthier population groups. For instance, in Austria, higher-income households (those in the fifth quintile) who buy a home from LPHAs aggregately save EUR 32.8 million compared to only EUR 14.9 million among the poorest households (those in the first quintile). This is driven by the general greater ability of wealthy households to buy a home (Klien and Streicher, 2021[77]). The sale of housing units by Dutch housing associations allows them to diversify their income and is targeted at first-time young buyers. Nevertheless, the prices of their housing units have been increasing faster than the market average and are becoming closer to homes sold by private developers. Moreover, the sale of housing units can decrease the availability of social rental housing if the income from the sale is not re-invested into building new homes (Rekers, 2022[140]).The shares in ownership housing co-operatives can sometimes be sold at market values, which decreases their affordability (Cooperative Housing International, n.d.[87]; OECD, 2025[141]).

Green initiatives undertaken by social economy housing entities usually incur a high cost and can result in increases in the cost of housing for residents. For instance, in Ireland, the Sustainable Energy Authority usually funds up to half of the renovation works with non-profit Approved Housing Bodies (APHs) having to provide the rest of the funds. This represents a significant cost that cannot be paid without raising rents and can impede affordability (Housing Europe, 2023[41]). The potential cost increases that result from sustainability measures can discourage residents from voting in favour of them in entities with democratic governance, thereby hindering the sustainability efforts.

Limited long-term finance options to scale

Non-profit housing initiatives in some countries are limited partly due to the lack of long-term (typically 25-30 years long) financing options, which prevents them from scaling their activities. For example, the financial products offered by private financial institutions for residential property developments in Croatia, Hungary and Slovenia are usually short-term loans, typically lasting 2-3 years with some going up to 10 years and are structured around the construction and sale of apartments, which mainly benefits higher-income buyers. In Croatia and Hungary, public financial institutions do not offer any long-term financial instruments for housing development and instead focus on providing loans for energy efficiency improvements (Pósfai et al., 2022[142]).

The difficulty with access to finance can be partly explained by limited experience among financial institutions in lending to social economy housing entities or the lack of regulation. Without proper regulation and track record, potential lenders perceive co-operatives and non-profit rental housing as high-risk investments, especially in countries where homeownership is prevalent (Lidberg, 2018[143]; Pósfai et al., 2022[142]). For instance, in Croatia, Finland and Hungary, housing co-operatives face challenges in securing financing and scaling due to limited public support and scepticism from financial institutions (Charlesworth and Hyötyläinen, 2023[144]; Pósfai et al., 2022[142]).

Policy options

Housing as a political priority that the social economy can help address through innovative solutions

Housing is a political priority at local, regional, national and international levels. Over two-thirds of countries in the EU and the OECD have a dedicated national housing strategy, while some other countries have regional strategies or other strategic documents that set out housing policy objectives. The top priorities in national housing strategies are i) access to affordable housing, ii) improving its quality, iii) increasing housing supply, and iv) promoting sustainable and inclusive urban development. Other priorities include boosting energy efficiency and resilience to natural disasters, and improving housing conditions of specific groups (OECD, 2024[145]). The OECD Agenda for Housing Policy Reform provides an OECD reference for housing policy and considers the multifaceted nature of housing policies, an enabling regulatory environment, inclusive policy strategies, housing sustainability, housing finance, among other factors (OECD, 2024[146]). The OECD Confronting the cost-of living and housing crisis paper highlights the importance of housing affordability, supply and funding with the aim to inform actions at city level (OECD, 2023[3]). On the EU level, housing and assistance for the homeless is the 19^th principle of the European Pillar of Social Rights (European Commission, 2023[147]). The 2021 Lisbon Declaration established the European Platform on Combatting Homelessness and agreed to a set of objectives aiming to eradicate homelessness (European Commission, n.d.[148]). The Affordable housing initiative was included in the European Commission’s renovation wave to ensure that social and affordable housing benefits from energy efficiency investments (European Commission, n.d.[149]). The EU Affordable Housing Plan is currently being developed with the aim to be adopted in December 2025 to support EU Member States, regions and cities to increase the supply of affordable and sustainable housing, as well as to improve access to housing for vulnerable individuals (European Commission, 2025[150]).

As shown above, social economy entities can help to deliver on these priorities. The importance of non- and limited-profit organisations for sustainable, inclusive and efficient housing markets is highlighted in the OECD Agenda for Housing Policy Reform (OECD, 2024[146]). The 2021 Lisbon Declaration recognises the role of the social economy in addressing and preventing homelessness (European Commission, n.d.[148]). Some Lighthouse Districts supported by the EU’s Affordable housing initiative include social economy organisations (European Commission, n.d.[149]). The importance of social economy housing entities in providing affordable housing is also recognised in some national housing and homelessness strategies as shown in Table 2.1.

Table 2.1. Examples of roles of the social economy in national housing and homelessness strategies

Member State	Strategy	Role of the social economy
France	Second Five-Year Plan for Housing First 2023–2027 (Deuxième plan quinquennal pour le Logement d’abord)	Associations are recognised as main partners in the implementation of the strategy. They participate in the Strategic Partnership Committee to strengthen the SIAO's (Integrated Reception and Orientation Service) governance based on a public-private partnership to improve access to housing.
Ireland	Housing for All - A New Housing Plan for Ireland (2021)	NGOs are included as relevant stakeholders for the implementation of the plan, particularly through housing provision for vulnerable households.
Latvia	Housing Affordability Guidelines 2023-2027 (Mājokļu pieejamības pamatnostādnes)	NGOs are recognised as significant providers of temporary housing for vulnerable households.
The Netherlands	National Housing and Construction Agenda 2022 (Nationale woon- en bouwagenda)	Housing associations are recognised as main stakeholders in the housing agenda, in particular through providing affordable housing, constructing new homes, engaging in sustainability initiatives and improving the living environment. The Agenda aims to support of alternative forms of housing and co-operative initiatives.
Poland	National Housing Programme (Narodowy Program Mieszkaniowy)	The programme includes measures to help with the repayment of old loans taken out by housing co-operatives.
Portugal	National Strategy for the Integration of Homeless People 2025-2030 (Estratégia Nacional para a Integração das Pessoas em Situação de Sem-Abrigo)	Social economy entities such as associations, co-operatives and mutuals are included as members in the Technical Committee for Monitoring, Follow-up and Evaluation. Their role is to participate in the preparation of action plans, annual monitoring and evaluation.
Romania	National Strategy on Social Inclusion of Homeless People for 2022-2027 (Strategia națională privind incluziunea socială a persoanelor fără adăpost pentru)	The development of social economy structures that employ and maintain medium- and long-term employment for formerly homeless people is included as a measure.
Slovenia	Resolution on the National Housing Programme 2015-2025 (Resolucija o nacionalnem stanovanjskem programu)	Co-operatives are recognised as “alternative forms of living” that can be promoted to address housing issues. The Programme recognises NGOs as providers of housing for the most vulnerable households
Spain	State Plan for Access to Housing 2022-2025 (Plan Estatal para el acceso a la vivienda)	Social economy entities included as partner organisations in the implementation of initiatives such as the housing promotion programme for older people or people with disabilities and the programme to support temporary accommodation, cohousing models, intergenerational housing and similar arrangements

Source: Délégation interministérielle à l’hébergement et à l’accès au logement (2023[151]), Department of Housing, Local Government and Heritage (2021[152]); Latvijas Vēstnesis (2023[153]), Ministerie van Binnenlandse Zaken en Koninkrijksrelaties (2022[154]), Ministerstwo Rozwoju i Technologii (2020[155]); Diário da República (2024[156]), Ministerului Muncii și Solidarității Sociale (2022[157]); Pravno-Informacijski Sistem Republike Slovenije (2015[158]), Ministerio de Vivienda y Agenda Urbana (n.d.[159]).

Given that housing has links to broader issues such as local and urban development, residential segregation and spatial inequalities, financial stability and the green transition, countries can support social economy housing entities and more broadly the housing market to encourage the provision of affordable, high-quality and sustainable housing. This section focuses on policies that can help the social economy do more in housing, in particular, to amplify its contribution in countries where its presence is limited or increasingly growing.

Enabling legal frameworks and performance agreements to define the scope of action for the social economy in housing and effectively channel policy

An enabling legal framework could be used to clearly define the scope of action for social economy housing entities, their operational modalities and the available policy measures. This would allow to identify social economy housing organisations, to ensure that they operate in line with social economy criteria and to channel support measures. Some countries have done this. For instance, in Austria LPHAs are regulated by the Limited-Profit Housing Act, which sets out rules on business conduct, auditing, building maintenance, rent-setting, revolving funds, among other areas (Koessl, 2022[84]). In the Netherlands, the 2015 Housing Act was adopted after Dutch housing associations suffered a reputational damage due to risky investments, high executive salaries and large portfolios of a few housing associations, as well as competition concerns among commercial investors. The act included an income limit for social housing residents, a landlord levy (which has been repealed in 2023), and a requirement to split the housing associations’ activities into commercial and social portfolios (van Deursen, 2023[160]). In 2022, the Act was amended to allow housing associations to engage in initiatives that facilitate social interactions among residents (Den Boer, 2023[131]). In Denmark, non-profit social housing providers are also strictly regulated, including aspects such as financing of new construction, maintenance and renovation, apartment size and the activities these organisations can engage in (Rogaczewska, 2018[161]). In Slovenia, the National Housing Act is the legal framework for the National Housing Programme and the National Housing Fund, which provides funding for non-profit housing organisations (Ziemann, 2024[91]). The Co-operative Housing Act in Sweden outlines organisational rules for housing co-operatives (Cooperative Housing International, n.d.[162]). In Czechia, 86% of respondents to the 2024 OECD Stakeholder Survey on Affordable Housing agreed that the introduction of a legal definition of the mission and obligations of not-for-profit housing entities could increase the supply of affordable housing (OECD, 2025[141]).

In the Netherlands, the government has concluded not legally binding performance agreements with housing associations and municipalities that set targets and define co-operation modalities. The National Performance Agreement for 2025-2035 was signed by Aedes (the national organisation promoting the interests of housing associations), VNG (Association of Dutch Municipalities) and the Ministry for Housing and Spatial Planning. The Agreement sets targets related to issues such as the number of constructed homes, the share of social housing in newly built homes, rents, maintenance and quality of the living environment (Ministerie van Volkshuisvesting en Ruimtelijke Ordening, 2024[163]).

Public authorities can use legal frameworks and performance agreements to help social economy housing entities to target low-income groups and facilitate social mixing. Policymakers can set the eligibility criteria for housing provided by social economy entities. For instance, in Austria, LPHAs receiving state support need to apply income thresholds set by regional authorities when selecting residents (Pittini, Turnbull and Yordanova, 2021[76]). In the Netherlands, 85% of social housing, 82% of which is managed by housing associations, is allocated to low-income residents (Heylen, 2023[164]; OECD, 2024[40]). In France, the SRU law (La loi du 13 décembre 2000 relative à la solidarité et au renouvellement urbain) requires municipalities with over 3 500 inhabitants (1 500 in the Paris region) in designated urban areas to ensure that at least 25% of their housing stock is social housing, 53% of which is provided by non- or limited-profit organisations and co-operatives. This measure aims to encourage a more balanced distribution of social housing, facilitate social mixing and improve local social cohesion (Ministère de l'Aménagement du territoire et de la Décentralisation et Ministère de la Transition écologique, de la Biodiversité, de la Forêt, de la Mer et de la Pêche, 2024[165]). In the Dutch National Performance Agreement for 2025-2035, municipalities are encouraged to ensure that at least 30% of their newly built housing is social housing, 82% of which is provided by housing associations (Ministerie van Volkshuisvesting en Ruimtelijke Ordening, 2024[163]; OECD, 2024[40]).

Legal frameworks that take into account social economy organisational structures and performance agreements can also be used to support green initiatives. In the OECD Global Survey on Buildings and Climate covering 28 countries, almost all countries (89%) have introduced mandatory energy efficiency codes (OECD, 2024[12]). These codes apply to social economy housing organisations. For instance, in Slovenia, more demanding standards for building performance have led to improved energy performance of the social housing stock, 8% of which is provided by social economy entities (Housing Europe, 2023[41]). Laws related to renewable heating are also applicable to social economy housing providers. However, in some cases, these laws do not consider the organisational particularities of social economy entities. For instance, the Austrian Renewable Heating Law (Erneuerbare Wärme Gesetz) that aims to eliminate fossil-based heating by 2040, cannot be implemented in limited-profit housing associations due to decision-making challenges as LPHAs require tenants to agree to changes in heating systems so additional legislation is necessary to implement the law (Housing Europe, 2023[41]). The Dutch National Performance Agreement for 2025-2035 includes sustainability measures for housing associations to contribute to the national target to have no CO₂ emissions in the built environment by 2050, such as eliminating all buildings with an E, F or G energy efficiency label by 2030 and stopping social housing buildings from relying on gas by 2050 (Ministerie van Volkshuisvesting en Ruimtelijke Ordening, 2024[163]).

Access to land to enable social economy entities to deliver more affordable housing

Access to affordable land through granting access to or leasing public land, zoning rules and land purchase loans for social economy housing providers could help increase the availability of affordable housing, in particular in urban areas where demand is highest. Some EU Member States have provided solutions for land accessibility for the social economy. For instance, the Special Agreement for Land Assignment (ESAL) in Spain gives housing co-operatives long-term use rights (usually for 75 years) for public land. In exchange, they agree to provide and manage affordable housing to benefit the community in the long-term (Community Land Trust Network, European CLT Network and Dark Matter Labs, 2025[101]). In Finland, many social housing providers, a fifth of which are social economy entities, lease municipal land at rates 20-30% below the market value (Pittini, Turnbull and Yordanova, 2021[76]). In the Netherlands, municipalities use zoning regulations to influence the land price. The land that is dedicated to social housing development has a lower value because less profit can be generated from it. Municipalities can also set prices for social housing land. For example, in Rotterdam, the land for social housing costs EUR 80-90 per square meter, compared to the residential market rate of EUR 600 (van Deursen, 2023[73]). In Denmark, municipalities offer a “land purchase loan” for non-profit housing associations to build on land the cost of which is too high for the organisations to keep within the set construction prices (Pittini, Turnbull and Yordanova, 2021[76]). In France, la Loi relative à la mobilisation du foncier public (2013) enabled the sale of public land to social housing providers, over half (53%) of which are social economy entities, at a discount price (up to 100%) (Légifrance, 2017[166]). In Poland, the land in the Nowe Żerniki project was given to co-operatives by the city of Wrocław in perpetual usufruct. The bidding price was 80% below market rates and the auction was closed to commercial entities (Habitat for Humanity Poland, n.d.[52]).

Funding and tax measures to scale social economy solutions for affordable, secure and sustainable housing

Social economy entities need long-term funding options to provide affordable, secure and sustainable housing. Policymakers can encourage access to funding through (i) setting up revolving funds, (ii) providing public loans, (iii) offering guarantees, (iv) subsidising interest rates and (v) directly subsidising social economy housing entities. Activities of social economy entities in housing can be considered as “Services of General Economic Interest” and are therefore exempt from the EU State aid rules as long as their prices are based on costs, they reinvest their profits and adhere to some income limits (Ziemann, 2024[91]; OECD, 2023[81]).4

Revolving funds can enable social economy housing entities to finance new construction and renovation efforts. A key characteristic of revolving funds is that they are constantly replenished. Any generated capital comes back to the fund to be invested into housing construction and maintenance and in some cases social and infrastructure investments (Portico, n.d.[167]). For example, in Denmark, the National Building Fund was established in 1967 with initial contribution from social housing rent increases and is currently funded by a portion of tenants’ rents and the housing associations’ contributions to mortgage loans. The fund finances the construction and renovation of social and affordable housing, social projects in vulnerable areas related to security and well-being, education and employment, as well as social and technical infrastructure. The Housing Fund of the Republic of Slovenia was created in 1991 and is funded through the public budget, domestic and foreign grants, revenues generated by the Fund from short-term investments, rental income and apartment sales, as well as long-term domestic and foreign loans or guarantees. It supports construction, renovation and maintenance of residential buildings. In July 2022, Latvia set up the Housing Affordability Fund to support the construction of 700 new rental homes for middle-income households outside the Riga (capital) region by 2026. In the long-term, the aim is to use developers’ loan repayments, and a share of tenant rent payments to finance new affordable housing and improve the buildings’ quality and energy efficiency. Although limited-profit housing entities are eligible for financing from the Fund, their presence in the country remains limited (OECD, 2023[81]).

Increasing funding available to social economy housing entities through public loans, loan subsidies, guarantees and direct public funding can allow them to expand their construction, renovation and green initiatives. This is already the case in some EU Member States. For example, public or municipal long-term loans are available to social economy housing providers in Denmark, Slovenia and the Slovak Republic (Pittini, Turnbull and Yordanova, 2021[76]; Pósfai et al., 2022[142]; De Pace, 2024[168]). Loans from Latvia’s Housing Affordability Fund are available for non-profit rental housing providers but in practice there are very few non-profit housing entities in the country (OECD, 2023[81]). In France, social housing providers, 53% of which are from the social economy, mainly use a dedicated state loan (eco- prêt) from Banque des Territoires to finance their renovation efforts (Housing Europe, 2023[41]; OECD, 2024[40]). Social economy housing entities receive a subsidy to cover some of the loan repayment in times of high interest rates in Denmark and Finland (Pittini, Turnbull and Yordanova, 2021[76]). State guarantees for private loans to social economy entities in housing are offered in Denmark, Finland, France and the Netherlands (van Deursen, 2023[73]; Pittini, Turnbull and Yordanova, 2021[76]; Mas Coop, 2025[78]). Some small-scale innovative housing projects that involve social economy entities and target vulnerable groups could benefit from direct public funding. For instance, Community land trust Brussels is mainly funded by funds from the Brussels Capital Region (World Habitat Awards, 2021[169]). The HomeLab pilot of social rental enterprises in Eastern Europe received funding from the EU Programme for Employment and Social Innovation (EaSI) (HomeLab, 2019[124]). The HERO project targeting Roma households in several Eastern European countries is funded by the European Parliament (HERO, n.d.[123]).

Rent subsidies that are paid either to social economy entities or their tenants can make social economy housing more affordable for low-income and vulnerable households. For instance, non-profit housing associations in Denmark receive a public subsidy to house social tenants and over time, these tenants repay around a quarter of their allowance (Noring, Struthers and Grydehøj, 2022[170]). In the Netherlands, one can receive a rental subsidy based on rent (maximum of around EUR 900 per month in 2025), income, age and household structure (Toeslagen, 2025[171]). In Poland, municipalities provide housing allowances to low-income residents, which allows co-operatives to have steady liquidity and fund the maintenance of their housing stock (Cooperative Housing International, 2020[88]). In Slovenia, the proposed transition to a cost-based rent for non-profit housing providers includes the use of a housing allowance to low-income households to compensate for a potential rent increase (OECD, 2023[81]).

Taxation measures for social economy housing entities can further enhance their financial sustainability. Social economy providers of cost-based social housing are exempt from corporate income tax in Austria and Denmark and under some conditions in Finland (Pittini, Turnbull and Yordanova, 2021[76]; Klien and Streicher, 2021[77]). In France, providers of new social housing (bailleurs sociaux), including social economy entities, benefit from a lower VAT rate and are exempt from property tax for between 15 and 30 years, depending on the energy and environmental performance of the building and other criteria (RT-RE-bâtiment, 2024[172]). Moreover, renovation initiatives undertaken by social housing providers, 53% of which are from the social economy, receive preferential tax treatment (Housing Europe, 2023[41]; OECD, 2024[40]). In Italy, housing co-operatives can deduct renovation expenses from their tax (Housing Europe, 2023[41]). Owners who confer their properties to SRAs for at least nine years in Wallonia (Belgium) are exempt from property tax and benefit from an annual tax reduction equal to 5% of the expenditure on renovation (UWAIS, 2024[60]; UWAIS, 2024[59]).

Partnerships and visibility could leverage the unique approach of the social economy to housing

Social economy organisations can be partners for public social housing programmes and initiatives targeting the most vulnerable households. Their ability to keep costs low combined with limited reliance on direct public support can help public authorities to reduce their housing spending. For instance, non-profit, limited profit or co-operative organisations provide 82% of social rental housing in the Netherlands, 61% in Austria, 53% in France, 33% in Denmark, 21% in Finland, 12% in Ireland, 10% in Poland, and 8% in Slovenia (OECD, 2024[40]). Moreover, since social economy housing providers tend to have broader eligibility criteria than public social housing programmes, such a partnership can facilitate local socio-economic diversity (Koessl, 2022[84]). Furthermore, in the HomeLab project in Eastern Europe, NGOs partnered with local governments to provide tailored support to vulnerable groups and helped them to identify and reach out to beneficiaries (European Social Fund Plus, 2022[125]).

Public authorities, including at local level, could initiate, drive and fund partnerships that include social economy housing entities. In Poland, the City of Wrocław’s help with planning and bank partnerships built credibility for the Nowe Żerniki project (Habitat for Humanity Poland, n.d.[52]). The City of Gothenburg partnered with Riksbyggen, one of the two largest managers of co-operative housing in Sweden together with the private sector, researchers and residents to develop the concept of positive footprint housing (International Cooperative Alliance, 2020[173]). The Housing and Empowerment for Roma (HERO) pilot project is funded by the European Parliament and implemented by the European Commission and the Council of Europe Development Bank in partnership with public authorities, financial institutions and local social economy entities (Council of Europe Development Bank, 2023[174]). The Affordable Housing Initiative European Partnership is an EU-funded project that has supported multi-stakeholder initiatives, including social economy entities, in 22 districts across Europe with mentorship, financial advice and capacity-building for a just transition. The second phase of the project will go further than retrofitting and energy efficiency by focusing on resilience, liveability and circular economy practices (Affordable Housing Initiative European Partnership, n.d.[175]).

Improving the visibility of the social economy in housing can help drive partnerships with the public and private sectors and increase support. To achieve this, public authorities could actively communicate the scale and contributions of the social economy within the housing sector. Highlighting their innovative approaches and measurable impacts can raise awareness on the many ways the social economy is active in housing. For this strategy to work, it is important to systematically collect data on the number of social economy organisations involved in housing, the types of services they provide (such as construction, green initiatives, addressing homelessness and job creation), their reach within communities and the outcomes achieved. Additionally, gathering data on funding sources, collaboration efforts with the public and private sectors, and the financial sustainability of these initiatives can provide a clearer picture of their overall impact and identify areas for improvement. For instance, in the Netherlands, the Housing Associations Authority (Autoriteit woningcorporaties (Aw)) under the Ministry of Infrastructure and Water Management supervises housing associations and collects publicly available data on property characteristics, the value of rental units, financial performance and unit allocation (Inspectie Leefomgeving en Transport, n.d.[176]). In France, the National Agency for Social Housing Control (Agence nationale de contrôle du logement social (ANCOLS)) controls and evaluates social housing providers, including social economy entities, alongside publishing evaluations, studies and statistics on social housing (ANCOLS, n.d.[177]).This evidence-based approach can enable policymakers and stakeholders to make informed decisions, allocate resources more efficiently and enhance the role of the social economy in addressing housing needs.

Another avenue is to organise awards to allow social economy housing entities to showcase their innovative practices. For instance, Mas Coop in Beaumont-sur Lèze (France) has been awarded a ‘NoWatt Building’ label created by the Occitanie region for its low carbon footprint (World Habitat Awards, 2023[94]; Région Occitanie / Pyrénées-Méditerranée, 2018[178]). La Borda housing co-operative in Barcelona (Spain) has won the 2024 European Collective Housing Award jointly organised by the Basque Country Architecture Institute and the Basque Department of Territorial Planning, Housing and Transport for “being an outstanding example of collective housing development at all stages of the process” (European Collective Housing Award, n.d.[179]). Policymakers can also draw inspiration from awards organised by international organisations and associations such as the European Social Economy Awards, organised by Social Economy Europe, where housing was included in the “green transition” category in the 2023 edition, European Responsible Housing Awards organised by Housing Europe, and World Habitat Awards created by World Habitat in partnership with UN Habitat.

Main take-aways on the contribution of the social economy to housing

• Social economy entities contribute to addressing housing challenges through inclusive practices, sustainable initiatives and innovative financial models. In some countries, such as Austria, the Netherlands and Sweden, they represent a large share of the housing stock and increase the supply of affordable housing through renovating vacant properties, acting as intermediaries between landlords and tenants in need and constructing new buildings. Many charge cost-based rents or offer ownership options, ensuring long-term affordability. They often focus on vulnerable populations and promote social mixing, while contributing to the reduction of homelessness by providing both long-term and emergency housing solutions. Some social economy housing entities contribute to decarbonisation of the housing stock through adopting sustainable, inclusive and circular construction practices, as well as improving the energy efficiency of their buildings and using renewable energy.

• Beyond housing provision, social economy organisations tend to offer a range of services related to housing that enhance individual and community well-being. These include care services, financial education, employment support and legal advice, among others. Some initiatives also improve access to retail and foster social interactions through intergenerational housing and community spaces. Participatory governance is a common feature, allowing residents to influence decisions and fostering a strong sense of community, often resulting in better housing quality compared to public or private alternatives.

• While their impact is positive, social economy housing entities face a number of challenges that limit their ability to scale affordable and sustainable housing solutions. These include legal and regulatory barriers, lack of access to affordable land, difficulty balancing affordability with financial and environmental sustainability and, in some countries, limited long-term financing options.

• Supportive policies can enable social economy housing entities to scale and help people to thrive, including in countries where they do not exist yet in significant numbers. Enabling legal frameworks define the action scope of social economy housing entities, their operational modalities and available policy measures. Facilitating access to affordable land through allowing to use or leasing public land, zoning rules and land purchase loans can help expand the availability of affordable housing provided by the social economy, especially in urban areas where demand for it is the highest. Funding mechanisms, such as public loans, loan subsidies, guarantees and direct public funding alongside taxation measures that are in line with competition laws, can increase the amount of funding available to social economy housing entities for construction, renovation and green initiatives while maintaining the affordability of their housing offer. Strengthening partnerships with public authorities, financial institutions and the private sector, as well as increasing visibility can also help unlock the full potential of the social economy in delivering inclusive, affordable and sustainable housing solutions.

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Notes

← 1.  Mutual societies (observed commonly in western European and Nordic countries) are enterprises controlled by their members that provide insurance, social security, and small-scale social services. Their main goal is to meet shared needs, not to make profits or pay returns on capital. Governed by solidarity, members actively participate in decision-making and are the focus of accountability (European Commission, n.d.[180]).

← 2.  The decoupling of land from buildings also happens in a commercial context.

← 3.  The organisme de foncier solidaire was introduced by the 2014 loi ALUR (Accès au Logement et un Urbanisme Rénové). The 2018 Loi ELAN (Évolution du Logement, de l'Aménagement et du Numérique) clarified the operational framework for organisme de foncier solidaire and for bail réel solidaire.

← 4. Services of general economic interest (SGEI) are “economic activities, such as transport networks and postal and social services, regarded by public authorities as being particularly important to citizens, and that would not be supplied (or would be supplied under different conditions) if there were no public intervention” …. According to the 2003 Altmark judgment of the Court of Justice of the European Union (CJEU), public service compensation does not constitute State aid when 4 cumulative conditions are met:

• the recipient service provider must have clearly defined public service obligations;

• the method for calculating the compensation must be objective, transparent and set out in advance;

• the compensation cannot exceed the relevant costs and a reasonable profit, i.e. no overcompensation; and

• the provider is either chosen through a public procurement procedure or the level of compensation is calculated based on an analysis of the costs of an average ‘well-run’ business in the sector concerned.

Where 1 or more of these conditions is not fulfilled, the public service compensation will be examined under State aid rules” (EUR-Lex, 2019[181]).