Affordable Housing, The Missing Piece in Europe’s Just Transition Puzzle
Can a transition to a greener economy be just if millions of people still lack access to safe, affordable housing? As Europe embarks on its ambitious journey toward a climate-neutral future, it risks overlooking one of the most foundational elements of a truly Just Transition: housing. Far more than just shelter, housing underpins economic stability, social equity, and environmental sustainability. Ignoring this critical pillar means leaving behind the very communities most affected by the green transition—workers in transitioning industries, low-income families, and marginalized groups. Unless housing becomes central to the green agenda, the promise of justice in this transition will remain unfulfilled.
Can a transition to a greener economy be just if millions of people still lack access to safe, affordable housing?
As Europe embarks on its ambitious journey toward a climate-neutral future, it risks overlooking one of the most foundational elements of a truly Just Transition: housing. Far more than just shelter, housing underpins economic stability, social equity, and environmental sustainability. Ignoring this critical pillar means leaving behind the very communities most affected by the green transition—workers in transitioning industries, low-income families, and marginalized groups. Unless housing becomes central to the green agenda, the promise of justice in this transition will remain unfulfilled.
When we talk about the EU’s Just Transition policies, it’s easy to applaud the generous funding streams and financial mechanisms aimed at reskilling workers, diversifying economies, and encouraging green investments.
Yet housing—an essential pillar of economic stability, social equity, and environmental resilience—remains largely overlooked.
Without access to affordable homes, workers and families in transitioning regions face significant barriers to stability and inclusion. Energy-inefficient housing compounds these challenges, driving up utility costs and disproportionately affecting low-income households already struggling with the economic effects of the green transition and creating a widening gap between those who can adapt to a greener economy and those left behind. These pressures risk creating a two-tier society where sustainability becomes a privilege rather than a shared benefit.
By integrating housing into Just Transition policies, we can ensure that revitalized regions are not only economically diverse but also socially inclusive, environmentally sustainable, and livable for generations to come.
Affordable and energy-efficient housing is vital to achieving a fair and inclusive Just Transition, particularly in coal-dependent regions where energy poverty is disproportionately high.
Retrofitting homes offers a tangible solution, reducing utility costs for vulnerable families, lowering greenhouse gas emissions, and creating stable, local jobs for displaced coal workers.
In addition to retrofitting homes, rethinking how we use existing resources such as vacant real estate presents another powerful strategy for addressing both housing shortages and climate goals. Across Europe, millions of homes and buildings sit vacant, representing a significant opportunity to address both housing shortages and climate goals.
Affordable housing can be created by converting vacant real estate, a strategy that significantly reduces the embodied carbon emissions of Europe’s building stock—one of the largest contributors to CO2 emissions.
Europe’s housing crisis is not a matter of scarcity but of misaligned priorities.
Across the continent, 38 million homes sit vacant, alongside underutilized industrial spaces and office buildings left empty by the remote work revolution. Projects like ‘Empty Spaces to Homes’ (ESTHer), funded by the Laudes Foundation and led by Habitat for Humanity International, demonstrate what is possible. By retrofitting unused spaces and implementing governance models such as Social Rental Agencies, ESTHer has transformed vacant properties into affordable, energy-efficient homes for vulnerable populations. This approach not only addresses housing shortages but also aligns with climate goals by reducing the reliance on high-emission new construction.
Despite these innovative examples, the scale of these initiatives is by no means sufficient, and housing focus remains largely absent from the EU’s Just Transition framework to the local actions on the ground. The Just Transition Fund, for instance, prioritizes industrial transformation and worker reskilling while providing only limited support for housing initiatives. Yet, housing is a critical enabler of both climate action and social equity.
To truly embody the principles of justice, Europe must elevate housing as a central pillar of its green agenda. A dedicated Housing Commissioner could play a pivotal role in addressing this gap. The Commissioner’s role could be to champion initiatives that prioritize housing in Europe’s journey to meet climate and social equity goals. This includes advocating for sustainable construction practices, prioritizing retrofitting over new construction, and encouraging member states to integrate housing into their Just Transition plans. For coal-phase-out regions, retrofitting projects offer transformative potential—reducing energy poverty while providing employment opportunities for displaced workers. Achieving these goals requires more than funding—it demands governance models that promote long-term sustainability, financial systems that extend beyond temporary subsidies, and a construction industry committed to innovation and responsibility.
Housing must transition from being treated as an afterthought to becoming the missing piece in Europe’s Just Transition agenda puzzle.
This piece is also an effective way to bridge high-level policy frameworks with tangible impacts on affected communities, ensuring a Just Transition that leaves no one behind.
Author: Laura Palencikova, Project Officer, Habitat for Humanity Europe and the Middle East