“It’s not easy. It requires a lot of work, a lot of changes. But this is the only way.”
Invested by Europe explores the forces shaping the European economy. In each episode, we hear from experts tackling the most pressing challenges—from housing and energy to innovation and infrastructure, security and defence. We look at what’s changing, what the solutions are, and how Europe is investing in its future.
What this episode is about
In many cities in Europe, rising prices mean young people delay starting families, key workers live far from their jobs, and lower income households are pushed into overcrowded or substandard homes. In this episode of Invested by Europe, we speak to Grzegorz Gajda, senior urban specialist at the European Investment Bank, about what affordable housing really means, who it is for, and why supply so often falls short of demand. Drawing on experience from across Europe — and beyond — the episode lays out the role of governments, the private sector, and long-term finance in delivering housing that supports social stability, economic growth and sustainable cities.
The conversation in brief
Jobs cluster in cities, but land is scarce and expensive, and construction alone does not determine prices. Instead, housing affordability is shaped by incomes. Because most people earn less than the average wage, large parts of the population struggle to compete in market-driven housing systems.
Affordable housing policies are usually shaped by governments. Clear regulation — defining who qualifies, how rents are set and how projects are supported — can unlock investment. Where rules are weak or inconsistent, supply stagnates. In many countries, between 40% and 70% of the population may be eligible for some form of affordable housing, including teachers, nurses, single-parent families, people with disabilities and other key workers.
Governments can help by setting the rules, providing land, and attracting private capital — from institutional investors to cooperatives, which play a major role in German-speaking countries. The conversation also highlights the wider costs of inaction: urban sprawl, rising infrastructure spending, higher emissions, and the loss of green spaces.
The solutions:
- long-term funding mechanisms with long-term, attractive cost of finance (where the European Investment Bank can help)
- housing for a diverse group of people at different rental rates based on what they can afford
- urban planning that finds useful land, recycled from warehouses or old railways, for example
- commercial real estate, such as shops on the ground floor, to finance the housing
Key takeaways
- Affordable housing is primarily about incomes, not construction costs — which means large parts of the population struggle in market systems.
- Clear regulation and long-term finance are essential to attract public and private investment at scale.
- Failing to build affordable housing fuels urban sprawl, infrastructure costs and environmental damage that often outweighs the cost of building homes.
About the guest
Grzegorz Gajda is senior urban specialist at the European Investment Bank. He advises project promoters on urban and housing investments across the European Union and beyond. Previously, he worked at the International Finance Corporation and the European Bank for Reconstruction and Development on residential energy efficiency and urban development projects in Central and Eastern Europe. He holds a master’s degree in economics from the University of Warsaw.
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