SEFA’s response to the European Commission Consultation on Affordable Housing Plan Initiative

EU climate policy increasingly shapes national decisions mainly through the Renovation Wave and directives such as the EPBD, yet the absence of an EU housing framework has led to fragmented impact across Member States. National systems operate within diverse legal, demographic, and economic contexts, making coordination essential.

Affordability and energy efficiency are intrinsically linked: a home cannot be considered affordable if energy bills are unaffordable, nor can it be energy efficient if residents cannot access the capital needed for renovation. In many communities, poor housing conditions like bad insulation, moisture, bad ventilation...result in real health issues and financial stress for families.

 An affordable home should be livable, healthy and cost-effective over time. This is why dealing with housing affordability should consider operating costs, particularly energy expenses not just purchase price. In this context, improving building quality and reducing energy bills is not only a matter of environmental responsibility, but also one of economic stability and social justice: this reduces the risk of default and allows families to live in healthier, more stable conditions

However, realizing this link in practice requires upfront investment, something traditional retail banks are often unwilling to provide due to the high risk and small scale of residential projects. This is where social lenders, energy service companies (ESCOs), and other mission-driven investors play a critical role. They take on financial risk, pool smaller renovation projects, and channel capital to households and building owners who would otherwise be excluded from mainstream financing.