Wohnanalage in der Kiefholzstraße
1 March 2020

“Every person has the right to adequate housing”

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An interview with Patricia Llopis from the EIB.

In January 2020, the European Investment Bank (EIB) provided Gewobag with a loan of 240 million euro to construct 2,000 new residential units by 2023. Over the next few years, Gewobag will, therefore, build 10,000-15,000 new homes for Berlin, among other things.


This is already the second financing project in which Gewobag and the EIB have cooperated and is in accordance with the EU Urban Agenda for liveable and innovative cities. Due to its high energy efficiency standards, the financing project makes an important contribution to both Gewobag’s and the EIB’s climate protection targets.

Patricia Llopis, urban development expert at the European Investment Bank.
Patricia Llopis, urban development expert at the European Investment Bank. She is responsible for projects relating to affordable housing and social housing development, notably in Germany and Spain.

Patricia Llopis, urban development expert at the European Investment Bank, spoke to us about the relevance of promoting social and sustainable housing development. We wanted to know more about the EIB’s targets in the context of European policies and how she rates Berlin’s housing market in the European rankings.

What is the general objective of the EIB in Europe?

The European Investment Bank is the EU’s bank, which means it belongs to the 27 EU countries. Our task is to provide the best funding opportunities for projects that are important for the success of the European Union. These are often very long-term loans within the EU. But about ten percent of our funds also provide help outside Europe to put our ideas and political goals into effect.

Do your goals change when the political landscape changes?

Traditionally, the EIB has four priorities. Firstly, we support the development and maintenance of infrastructure, which classically includes roads and railways, but also power lines, digital networks and much more.  Secondly, we invest in our continent’s competitiveness by promoting innovative projects. Thirdly, we support small and medium-sized companies that benefit from guarantees or pass-through loans to national or regional partners. And finally, we pay particular attention to projects that benefit the environment or climate protection.

The latter point in particular is now at the heart of our activities with the accession of the new European Commission under Ursula von der Leyen. Together with the Commission, we want to ensure that the EU is climate neutral by 2050. This will require enormous investments, especially in the next ten years.   

“The cost of housing facilities often takes up a significant proportion of income and people who try to find accommodation in social housing or other subsidised housing end up on long waiting lists.”

What are the EIB’s objectives with regard to the German housing sector?

The housing market is in crisis, not only in Germany but also in other European cities. The cost of housing facilities often takes up a significant proportion of income and people who try to find accommodation in social housing or other subsidised housing end up on long waiting lists.

Cities and housing associations in Germany are in the process of implementing ambitious investment programmes to create more affordable housing. EIB finance plays an important role in providing the necessary funds for these programmes.

The EIB provides direct financing to large private and public housing associations, with which a loan agreement can support an investment programme over several years and that often involves a large number of properties. Many customers see this as an advantage because it enables them to take on large investment sums in a relatively short time. Modernisation can also be financed in this way.

In addition to direct financing, the EIB cooperates with partners, such as regional development banks, which pass our funds on to smaller projects.

Cost-effective housing is a key objective of EIB financing in the housing sector. However, energy efficiency and climate protection are also very important to us. 

“Our projects aim to strengthen social cohesion and improve the quality of life of those groups whose housing needs are not adequately met by the market.”

The EIB finances new construction and modernisation projects in the housing sector provided that are in line with EU objectives. Can you briefly explain these objectives?

The EIB supports the implementation of the EU Urban Agenda, which brings together European, national, regional and local participants to improve the quality of life in urban areas. We invest in regions and cities where there is a clear housing policy and regulatory framework.

Our projects aim to strengthen social cohesion and improve the quality of life of those groups whose housing needs are not adequately met by the market. We also want to combat urban sprawl, create vibrant districts and make sustainable transport solutions possible.

The EIB also participates in the EU Housing Partnership, which, among other things, explores better financing tools for affordable living. Through cooperation with our partners, we promote new approaches for social housing in European regions where supply is limited and the legal framework conditions are evolving.

“Affordable housing is enormously important for the sustainable development of cities and communities. At the same time, heating costs in some poorly insulated buildings are a significant cost factor for the occupants. Therefore, it makes economic and ecological sense to invest in high energy efficiency standards.”

In particular, social and affordable housing and energy efficiency projects are financed. Is there a preference within the EIB, or do social or energy projects take centre stage?

You are touching upon two points here that must be thought about as a whole. Affordable housing is enormously important for the sustainable development of cities and communities. At the same time, heating costs in some poorly insulated buildings are a significant cost factor for the occupants. Therefore, it makes economic and ecological sense to invest in high energy efficiency standards.

Furthermore, the EIB sees itself as the EU’s climate bank, energy efficiency is part of our work’s DNA, regardless of the sector. Our focus in public housing development is, therefore, on social and affordable housing with the highest possible energy efficiency standards. In private housing development, we focus exclusively on energy-related renovations and on new buildings with energy standards that are significantly higher than the statutory requirements.

Have EIB project requirements/housing sector economics changed in recent years? And if so, how?

We have financed a wide range of housing projects across Europe in recent years – from social housing, student accommodation and nursing homes to reception centres for refugees. We generally observe the market and adapt our financing to developments to the respective countries. More recently, the greatest change has been with regard to buildings’ energy efficiency. In any case, the issue is particularly important for us as a climate bank, and the gradually rising standards at European and national level naturally also affect our work.

“Every person has the right to adequate housing and we would do well to respect this right.”

Why is financing that promotes social and sustainable housing development so relevant to society?

The EIB supports affordable housing for several reasons: first of all, for social justice. Every person has the right to adequate housing and we would do well to respect this right. It is not just about reducing inequality in society. A sensitive housing policy is also a means of defusing potential tensions that can arise from the concentration of different population groups and a lack of social mixing.

Furthermore, we can see across Europe that housing markets do not provide sufficient supply for low-income and marginalised population groups. This sometimes has far-reaching consequences for public health, safety and social cohesion. The EIB tackles this problem by providing long-term loans to those developing social and affordable housing projects, thereby assisting cities and municipalities.

How many housing projects are you financing across Europe?

Between 2015 and 2019, we invested around EUR 9.6 billion worldwide to support social or cost-efficient housing; over 95 percent of this was in the EU.

And in Germany?

Germany is one of the biggest beneficiaries of our financing. Between 2015 and 2019, German developers in the housing sector received an impressive EUR 2.4 billion from EIB funds. This means that every fourth euro that we invested in this sector during this period benefited Germany.

“According to local estimates, Berlin’s population will grow to almost four million by 2030.”

How do you see the Berlin housing market in terms of affordable housing in comparison to Europe?

According to local estimates, Berlin’s population will grow to nearly four million by 2030. Most inhabitants live in one of about 1.6 million rental apartments. Like in many other European cities, there is a significant shortage of rented housing, especially for low and middle-income households.

Berlin is recording big increases in rents, especially for new rentals. Together with the dynamic population development, this means that the housing market here is rather strained.  The low ownership rate compared to the rest of Europe also contributes to this. Furthermore, there are relatively high numbers of people in Berlin who have a social housing permit, meaning they are entitled to subsidised housing. At the same time, the number of this kind of housing has been declining for years, although the Senate is now taking countermeasures against this development. The state-owned housing associations in particular are now investing heavily again.

“According to the latest Eurostat surveys, in 2016 almost one in twenty EU citizens had great difficulty finding adequate housing. Eleven percent of people spent at least 40 percent of their disposable income on accommodation. Large cities are particularly affected by these problems.”

Why is financing in the housing market particularly important in large cities?

Over 70 per cent of Europeans live in urban areas. This frequently leads to high demand for affordable housing. According to the latest Eurostat surveys, in 2016 almost one in twenty EU citizens had great difficulty finding adequate housing. Eleven percent of people spent at least 40 percent of their disposable income on accommodation. Large cities are particularly affected by these problems.

However, investments in housing development have been in decline since 2009. This leads to two significant problems, especially in the area of affordable housing: there is less and less good accommodation and at the same time demand is increasing. According to a recent EU study, there is an annual shortfall of around EUR 6 billion for social and affordable housing development. This means that investments in this sector must increase by 25 percent.

Of course, we cannot completely fill this gap, but we can make our contribution to ensuring that living in big cities is not just for big earners. And we do it with zest.

Thank you for talking with us.

Garden courtyard at Kiefholz residential complex and low energy standard building 70 I Portrait photo © EIB


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