The story of Europe’s housing emergency is usually told like a tale of scarcity: too few homes, too little public money, and an investment gap estimated at roughly €150 billion a year. The numbers are real, but they conceal a more uncomfortable diagnosis. After three years of research in the Horizon Europe-funded HouseInc project, with the contribution of SDA Bocconi as one of the research consortium members, what emerges is this: the housing crisis is increasingly a delivery failure. Fragmented responsibilities, siloed planning, and transactional contracts mean that even the resources we already have rarely turn into homes — let alone into the integrated, affordable, and durable housing that vulnerable families really need. So, if this is the case, the most powerful lever we should use is governance.
Let’s start with the approach to affordable housing taken today by the actors who deliver it. Everything revolves around financing construction, to include negotiated planning concessions, public procurement, and the resources mobilized by public, social, and cooperative housing providers. But what happens once people actually move in is largely an afterthought. Consequently, these arrangements remain transactional: the actors involved finance the brick-and-mortar, hand over the keys, and move on — with little contractual grip on outcomes over time. What matters here is the shift from delivering buildings to commissioning a service . In other words, this means treating affordable housing like a service of general economic interest, with enduring outcomes such as accessibility, inclusion, and quality of life written into the contract itself. In practice, this translates into long-term, outcome-based arrangements, and not just authorizations for land use. The institutional architecture varies across Europe, from Denmark’s non-profit model to Ireland’s 25-year social-housing PPPs, but the path converges on contracts that reward outcomes over decades, not handovers.
The problem is, governance reform around delivery is moot if the money does not follow. The same collaborative logic has to reach the capital stack. Public budgets alone will not close a €150 billion gap, and private capital is deterred by thin returns and long horizons. The answer is not simply more money but better-governed money: blended structures that bring public, private, and philanthropic actors to the same table. Philanthropy can take catalytic first-loss positions and fund the technical assistance that makes projects investable; public guarantees can crowd in pension funds and insurers (leveraging instruments such as InvestEU at ratios of 1:8 to 1:16); and investment vehicles can be stretched beyond the customary twenty-year horizon to match the life of the asset. To see how a well-designed, risk-sharing architecture lowers the cost of capital at scale, we can look to the Netherlands' Waarborgfonds Sociale Woningbouw , a sector guarantee fund backed by housing associations, municipalities and the central government, and Ireland's Housing Finance Agency , a state-owned lender that channels long-term, low-cost capital to local authorities and approved housing bodies under sovereign guarantees.
Then comes the lever of internal economies . Rather than running each project as a stand-alone, housing providers (be they public, social or cooperative) can operate their stock as a single, interconnected portfolio. This would represent an integrated supply chain in which surpluses from less risky, mixed-income segments cross-subsidize homes for the most vulnerable, while revolving instruments keep capital circulating into maintenance and new supply. This is what makes affordability sustainable when public funding is tight or unstable. It all depends on scale, mixed tenure, reinvestment rules that retain surpluses in the system, and crucially, managerial capacity. Consider Vienna, where limited-profit associations house most of the city under strict reinvestment rules, or the large, diversified housing associations of Denmark and the Netherlands : these examples show that resilience is built through portfolio management — not one grant at a time.
But none of this works if housing remains a sector unto itself. Housing vulnerability is multi-dimensional — it reaches into employment, health, education and social connection — yet services are still organized in policy silos that blunt their combined effect. The Housing+ approach treats the home as a platform : a base from which integrated, co-designed service bundles are delivered, moving from fragmented interventions to coordinated ecosystems. The payoff is both social and fiscal: better housing stability and access to opportunity, alongside less duplication and shared infrastructure that make public spending go further. So how much value is unlocked when housing policy is deliberately de-sectorialized? For real-world answers, we can turn to projects such as Italy’s Tandem (housing and education) and Sweden’s Vivalla , where a renovation contract was used to employ jobless residents.
What ties delivery, finance, internal economies, and de-sectorialization together? The answer, once again, is governance. For each lever, actors who are not used to working together must align across levels of government and across policy domains. The recurring model is a multi-level architecture with a coordinating “backbone,” typically national or metropolitan, that steers strategy, pools resources, and builds a pipeline of bankable projects, while local authorities and providers keep operational control and multi-stakeholder platforms broker the rest. Milan’s Extraordinary Plan for Housing and Barcelona’s Housing Plan are promising attempts to serve as this backbone, coordinating public, private, and non-profit actors within a single strategy.
All this represents a wake-up call for policymakers and practitioners. The binding constraint is no longer only fiscal; it is institutional and managerial. Breaking down siloed budgets, defining shared affordability metrics, and building durable public–private–philanthropic partnerships: all this demands expertise that most administrations have not yet developed— and that fragmented, billed-by-the-hour technical assistance will not create. As the European Affordable Housing Plan takes shape, the agenda should be less about new instruments and more about consolidating a model: governing housing as an integrated, financed, long-term service, and investing in the people on both sides of the partnership table who can actually deliver it.
Europe will not build its way out of the housing crisis. It will have to govern its way out.
The themes discussed in this article are expounded on in HouseInc, where SDA Bocconi spearheaded the development of ten solutions to housing inequality. These were the topic of discussion at the HouseInc Research and Policy Dialogue , hosted at SDA Bocconi on 13 May 2026.
The topics covered in the “Housing” Trending Topic are addressed in the executive education programs Partnership pubblico-privato per investimenti e servizi and PPP per investimenti e servizi pubblici , and are studied by SDA Bocconi’s Public Value Lab and Business & Government Lab .
