Vice-President Teresa Czerwińska’s opening speech on Delivering affordable housing across continents at the World Urban Forum on 28 June 2022.

Check against delivery



It is a great privilege for the EIB to share with WUF11 participants some of our reflections and experiences in relation to the topic of the affordable housing and challenges it is facing.

The starting point of our reasoning should be the following blunt yet painfully true statement. As of today, many young adults continue to live with their parents. Not having their own place to live often makes it impossible to start families, have children and live an independent life. Still, these people are better off than many of the young people who migrate to large cities and have to live in informal settlements as the costs of accommodation are simply too high. 

The fact that young people have now to spend most of their income for the costs of living in big cities may mean that the future generations will be poorer than our own generation.

How did it happen that we cannot cope with this global phenomenon of rising cost of housing in big cities? Somehow we managed in other sectors, we made education and medical services much more accessible globally, technological advances made advanced consumer goods accessible to increasing number of people. And yet, somehow the housing sector seems to be going the other direction.

Attempts to stimulate this sector by using typical policy tools, such as lowering taxes or providing subsidies, which worked so well elsewhere do not seem to bring the expected results. Something evidently went wrong and we need to identify and address it.

Characteristics of successful cities

We need to start by understanding that urbanisation brings economic value to societies. This value is created from increased economic activity, creativity, trade and greater scale of interaction between people. This value is already lifting millions of people out of poverty and brings them together. In Europe, cities were always leaders of progress and an attractive place for people to migrate to. As we can see, this is still the case. Often, the initial reason that created the city like a market or an industrial plant, no longer exists and the city built around it is still present, offering much more than a place to live for traders or employees.

However, what we have learned from the history of our European cities is that their populations thrive only if the city can share with all the residents the benefits of its success. In other words, solidarity and inclusivity are necessary conditions for a city to succeed.

Failed housing policies

So, coming back to our question of failing policies: how can the housing sector foster solidarity and inclusivity?

The issue is that a home in fact has two functions: it has a utilitarian function as a safe place to live and an investment function as a way to preserve family savings. Why is the investment function so special in case of housing? It is due to the fact that there are not too many attractive places in a city to build a house. Therefore, with limited supply and economic growth, the value of houses go up and this characteristic makes it a good place to store family savings.

The down side is that the investment earnings of one person mean higher housing costs for another. Consequently, a government, aiming at providing mortgage subsidies or tax breaks to support vulnerable groups, risks ending up in the vicious circle of ever-increasing costs of these interventions. Moreover, these demand-type interventions and limited supply lead to even quicker increase of housing costs.

Better housing policies

Is there a better way? Our European history is rich in major processes impacting entire populations. When it comes to housing, it followed big population movements, modernisation processes and migrations. But, national and local governments intervened along the way. There were major housing programmes implemented with a view to ensure decent quality of life. They all meant to realise in practice the postulate of solidarity and inclusivity.

Large housing programs were implemented in various forms. There were public and cooperative housing programs. There were even programs implemented by not-for-profit private entities. They all had one thing in common: that the economic value created by urbanisation was kept within the not-for-profit housing sector entities, creating conditions for their future growth while maintaining affordability. In fact, it is due to the capital base formed by this accumulated value staying in not-for-profit housing entities that we, at the EIB, are able to finance our housing programs nowadays, with our very long term loans offered at very low rates.

Housing of the future

The history teaches us that the cities must evolve to keep pace with societal and economic changes. Those cities who were once build around markets or industrial plants today may be centres of service industries. The future will have 70% of all of us living in cities. What they will look like depends on us. Better urban future, the headline of this World Urban Forum calls our cities to be inclusive, sustainable and green.

This all begs the question to how the housing sector must evolve to deliver this promise. There is probably no one simple response. But, if the experience of European housing can teach us something, then it is that the housing system must be diverse and balanced. Housing must be offered by public, private and cooperative stakeholders. The public policies on housing must require that value is kept within the housing entities.

Secondly, having sustainability and inclusivity in mind, the homes must be closer to essential services each other enabling access to most needs within a 15-minute walk or bus ride.

The cities of the future must involve people more in decision-making. Public institutions must be better funded and take on more responsibility to offer good quality, sustainable and affordable housing to residents. We, at the EIB, have financed nearly €100 billion of urban investments during last 5 years. We will continue doing so, now through newly established branch, EIB Global, which is building increased local presence in key markets, closer to our future clients.

I am confident that with closer cooperation among international and local partners, we will create good quality of life in the cities of tomorrow. The European Investment Bank is ready to respond with financing and advice and looks forward to cooperating even closer with partners to make our urban future prosperous and inclusive.