Strengthen the Role of Local Governments and Municipalities

What is the problem?

Currently, housing policy in many EU member states is primarily designed and managed at the national level, with limited authority and resources granted to local governments and municipalities. This centralization often leads to inefficient responses that fail to reflect local housing realities - such as differences in rent levels, population density, migration patterns, and social needs. As a result, cities and municipalities struggle to address housing shortages, homelessness, and affordability crises in ways that are responsive and sustainable.

Why is it important?

Housing needs are highly local in nature. Municipalities are closest to citizens and best positioned to identify vulnerable groups, available properties, and emerging housing pressures. Without stronger local involvement, policies risk remaining disconnected from on-the-ground realities. Empowering local governments would enable more tailored, inclusive, and timely solutions, ensuring that housing policy effectively supports both citizens and community development.

What should be done?

The EU and its member states should increase the role and capacity of local governments in housing policy design, management, and implementation. This can be achieved through:

• Decentralizing decision-making to give municipalities greater authority over social housing programs, land use, and rental regulation.

• Direct EU funding to municipalities for affordable housing projects.

• Creating local housing observatories to collect data, monitor market trends, and inform evidence-based policy decisions.

• Encouraging partnerships between municipalities, civil society organizations, and housing cooperatives to develop community-led housing models.

• Providing capacity-building programs for local administrations to strengthen their planning, financing, and management skills in the housing sector.

Who should act?

The European Commission should facilitate and fund local-level initiatives by adapting existing programs to allow direct municipal access to EU funds. National governments should decentralize housing competences, allocate resources fairly to municipalities, and remove bureaucratic barriers that limit local action. Local governments and city networks (such as Eurocities or the Committee of the Regions) should take an active role in implementing housing programs, sharing best practices, and representing local interests at the EU level.

What impact will it have?

Empowering municipalities will lead to more responsive, equitable, and efficient housing policies. Local authorities can design solutions that reflect community needs, reduce homelessness, and promote social inclusion. The approach would also stimulate local economies through construction and renovation projects, enhance democratic participation by involving citizens in local decision-making, and improve sustainability through better urban planning and energy-efficient housing. Ultimately, a stronger local role will make Europe’s housing systems more resilient, fair, and closer to the people they serve.