When people can’t afford to live close to their work, their quality of life suffers. And so does the climate. Think of social housing as climate projects that counter the need for long commutes that emit lots of carbon.

A home is a basic need, but many Europeans can’t find a decent, affordable place to live.

That’s obviously a social problem. It may surprise you that it also contributes to global warming.

The shortage of good, energy-efficient homes in Europe is especially bad in a lot of urban areas, where 70% of the population lives. It impairs the quality of life for many people, who can only afford housing a long way from their jobs. And that hurts the climate, when those people commute long distances by car and use more fossil fuels. Then there’s an energy consumption angle within the cities. Homes and buildings, especially old, leaky ones, are one of the top consumers of energy.

Big steps for housing and energy

When people can’t find good housing, this increases the social divide in European communities. It causes public health problems, poor public safety, shortages of workers in central locations and inefficient labour markets. In Ireland, for example, thousands of people linger on waiting lists to get better housing. In France, it’s difficult for nurses to find affordable accommodation in central Paris.

The housing and energy challenge is immense. Nearly half of all European residential buildings were constructed before 1970, when materials, standards and techniques didn’t take into account how much energy was consumed. The European Commission estimates that 75% of buildings and housing needs to be made more energy efficient to meet Europe’s climate goals.

“Providing people with a home is the most important part of our social housing projects, but if it’s done in an energy efficient way, that’s a great benefit,” says Gerry Muscat, who heads urban development at the European Investment Bank. “Many housing projects we are involved in help people and the climate.”

Even something as simple as changing lightbulbs makes a big difference. An Austrian lighting company, Zumtobel Group, is researching more efficient lighting and light management that makes sure lighting systems are used only when needed. Early in 2019, the European Investment Bank approved the second part of two €40 million loans to broaden the company’s research into making lighting more connected to digital services.

Growing cities, rental shortages

In Sweden and Poland, the growth of mid-size cities is dramatically increasing demand for affordable housing. Sweden is tackling the problem by building thousands of affordable rental homes. In September 2019, the European Investment Bank approved a nearly €300 million loan to support the Swedish move with near-zero energy plans that adopt the highest efficiency standards.

In Poznan, a city in central Poland, many residents do not qualify for city-supported affordable housing because their incomes are too high, yet they also can’t buy a home in the regular market because they have a low credit rating. The city and a local housing company started a project for these residents that also has a day-care centre, a kindergarten, a playground for kids and parking spaces for the disabled. The goal is to build more than 1 000 flats in this new neighbourhood. The European Investment Bank signed a €34 million loan to this project.

“Our goal is to make Poznan an attractive centre, where people on all budgets can call the place home, commute easily and enjoy a level of municipal services that is modern and ecological,” says Grzegorz Ganowicz, chairman of the city council.

The European Investment Bank also signed a €19 million deal in 2019 in Poland with BNP Paribas Bank Polska to improve energy efficiency in existing homes. The Polish bank will use the money to give loans to farmers and homeowners to install solar panels. The money also will help housing associations improve energy efficiency.

In France, young professionals especially have a hard time finding affordable homes. The country is solving this problem by building homes for people who don’t qualify for housing support, but who also don’t have enough money to afford decent housing. The Bank has invested a total of €1.3 billion in affordable housing projects in the country to build around 27 800 lodgings (read more about European Investment Bank financing for affordable housing in France).

Big demand for new homes in Africa

As with everything else the European Investment Bank does, its social and affordable housing work isn’t confined to Europe. In Africa and around the globe, European Investment Bank projects help build better places to live – and reduce energy consumption. That’s important because, after all, Africa’s cities will be home to an additional 765 million people by 2055, creating a large demand for affordable housing.

The European Investment Bank is contributing nearly $20 million to a series of affordable and green housing projects in Namibia and Botswana. This housing is expected to save 20% on water and electricity use.

“Our ultimate goal is to offer a good quality of life to a group of people who have been underserved,” says Cathal Conaty, managing director of International Housing Solutions II, a fund backed by the European Investment Bank that is raising money for housing projects in Namibia and Botswana.