After World War II, a ravaged Europe began to move toward a new model of capitalism. European countries developed more ambitious welfare states and adopted Keynesian models of demand management to deliver high rates of employment, with labor unions now playing a meaningful role in political and economic life.

New approaches to housing and development were critical for this new economic paradigm, supplanting a model dominated by private development and landlordism, though without nationalizing landownership or housebuilding. The built environment increasingly came to be governed by public objectives rather than the whims of real estate markets. In many cases, public housing was not the dominant form of provision, with co-operatives and housing associations of various kinds playing a significant role.

In France, the government built an average of around 100,000 new social homes a year during the 1960s and ’70s. In West Germany, after a period when roughly 70 percent of new homes received some social housing subsidy for construction, almost a fifth of housing was social by the late 1960s. Sweden built public housing on a mass scale as part of its state-led “One Million Homes” program between 1965 and 1974.

However, many of these countries subsequently began to reorient toward neoliberalism and economic models led by finance. The following period has seen the rise of “real estate neoliberalism,” with housing and land treated as financial assets, eventually becoming vital for the success of the financial system as a whole.

While the extent of this trend has varied from one country to the next, reaching its furthest extent in the UK and arguably Germany, we can observe steps toward the privatization of housing development and spatial planning throughout the continent. In this context, it is hardly surprising that so many people in contemporary Europe are faced with housing crises, as the gains of the last century dwindle away.

The UK has been at the forefront of housing privatization since Margaret Thatcher’s introduction of the Right to Buy program. This resulted in the mass sell-off of public housing to its tenants, a policy agenda that would later influence privatization schemes elsewhere, particularly in Eastern Europe. A raft of other policies further embedded neoliberalism in the UK housing system.

This reorientation has remade the housing system, resulting in one of Europe’s most unrelenting housing crises, with over a million waiting for social housing. In earlier decades, the UK had above-average levels of social housing compared to other European countries and dramatically lower house prices and rents than today, with secure tenancies and better protection from evictions. Now, house prices are less affordable in relation to average earnings than at any time since the late nineteenth century, while the UK ranks second from bottom in the Global North when it comes to affordability for private renters.

Three times as many private renters from the bottom quarter of incomes in the UK pay more than 40 percent of their earnings on rent when compared to their counterparts in Germany, or six times as many when compared to those in Czechia. The UK’s homelessness rate is currently around five times the OECD average of 0.25 percent. While it is very difficult to compare rates between countries, due to differing definitions of homelessness, the extent of the gap is large enough to suggest that Britain is a major outlier.

Direct labour organizations (DLOs) played a significant role in building many postwar council estates and public assets. In many cities, DLOs were critical for largescale regeneration schemes, ensuring that the public sector was in the driving seat rather than real estate capital. Today, with the exception of maintenance teams, DLOs are rare in the UK.

The British state has also farmed out the tasks of acquiring land, designing buildings, and financing construction projects to the private sector since the 1980s. In the postwar decades, councils developed approximately half of new homes to serve as council housing, which was the dominant form of public housing in the UK. During the same period, central government investment delivered most of the funding for these council homes.

With the decline of council housing and the pruning back of public investment, private sector funding now delivers approximately 85 percent of new UK homes. The proportion of new homes that are publicly funded is barely a quarter of what it previously was.

“New Town” programs also played a critical role in development during the postwar decades. Between 1946 and 1970, successive governments initiated twenty-two new settlements, with publicly owned development corporations taking responsibility for “master-planning,” delivering the necessary infrastructure, and coordinating the building of houses. Of the homes built in these New Towns, around 80 percent were allocated for social housing during the first phase of development.

Social housing continued to serve as the backbone of New Town housing until the 1980s. Forty-six percent of housing stock in Milton Keynes, the biggest New Town, was comprised of council housing in 1981. The equivalent figure for Peterborough, another major New Town, was 37 percent in the same period.

There have been some recent developments that could indicate a partial return to this approach. Keir Starmer’s government has mooted the launch of a revived New Towns program and some expansion of social housing. Cities like London and Manchester have sought to buy back formerly public housing, as has the devolved government in Scotland. London has also formulated plans to establish a publicly owned developer. However, there are reasons to be deeply cautious about any sense of optimism here.

Firstly, there are no signs thus far that the proposed New Towns program involves much change in delivery methods when compared to the recurrent attempts we have already seen to construct New Towns or “Garden Cities” since the 1990s. The fact that Starmer’s government is proposing this program at the same time as it moves toward a fresh round of austerity suggests, in particular, that the necessary investment to get this right will not be forthcoming. The promise that 40 percent of homes in New Towns would be comprised of “affordable housing” may seem positive. But it also indicates that a central role for the public sector is unlikely, since there is no mention of council or social housing.

Secondly, the government’s stated target to build more social housing than any government has achieved in a generation seems much less impressive when we remember that the UK has simply not built many social homes since the 1980s. In 2023, Labour transformed a pledge to reestablish social housing as the second-biggest form of tenure into a “long-term aspiration” — an aspiration that has since all but disappeared from the party’s rhetoric.

Finally, while the reforms carried out at regional level in London represent an improvement on the national trends, the program for the acquisition of public housing remains modest and less ambitious than the original plan. The proposal for a public developer is still yet to be implemented, and its proposed remit suggests little focus on using the new entity to reshape development markets or to serve as a tool of public planning.

While the UK is an extreme example of the trend, it is by no means unique. In Europe today, the average share of social housing is just 9 percent. If we look at six Western European countries — the UK, Germany, Denmark, Sweden, France, and the Netherlands — all but two have seen a decline in social housing as a share of the housing stock since 1980.

In the Netherlands, social housing has declined from almost 40 percent of homes in 1980 to just 32 percent today — a decrease of around one-fifth. At the same time, most social housing providers have gone from being considered an extension of the public sector to function as independent nonprofit organizations, eroding public control. Government officials have also weakened incentives to invest in new social housing, while eligibility criteria have become more stringent.

In Germany, the market share of social housing is now approximately one-sixth of what it had been in West Germany in the 1960s. There has been an especially precipitous decline in the former East Germany, with both parts of the country experiencing a huge wave of privatization in the 1990s. In Sweden, the decline of social housing has not been as steep — the current figure for public housing stock is 17 percent — but this was in relation to a lower baseline when compared to many Western European states.

The two exceptions to this pattern are France and Denmark. However, both countries have still seen attacks on the role of social housing as a critical social service. Denmark has moved away from a “near-universalist” approach, while France has increasingly been funding social housing through private finance rather than government subsidies. Both countries have also taken steps toward embracing “public-private partnerships” in social housing.

The trend across most of Europe is for the supply of social housing to decline as privatization and commercialization take hold. In cases where social housing is still being built, there is a tendency to rely on private investment, allowing the financial sector to play a greater role in deciding which projects are worth going ahead with.

Public development and construction has also declined since 1980, with countries like Germany and Denmark having sold off or wound down companies that formerly did much of this work.

Public investment in housing has been falling, too. By 2020, the EU average for direct public investment in housing was down to 0.15 percent, significantly lower than the level two decades previously. Few EU states spend much above this average figure. This has left almost all investment in new housing to the private sector and the remaining budgets of social landlords.

Like Britain, several European countries took on major New Town and Garden City projects, particularly France, Sweden, and Finland, showcasing public development and public urban planning. Despite the relative success of these projects, few additional schemes have been built since the 1980s. Private capital has been left to manage the extension of urban areas.

Looking at large cities in Western countries, including those of Europe, a major Cambridge study found that the decline in social housing in many of these countries has led to more reliance on private landlords and financial actors. A 2022 report suggested that this decline has increased inequality, reduced working-class living standards, and contributed to higher housing costs overall.

Over the last five years or so, we have seen signs of change in some parts of Europe. Berlin, faced with rapidly rising rents, has moved to bring about the socialization of rental homes. In 2021, a citywide referendum resulted in a landslide vote to transfer rental homes owned by large corporations to public hands, which would involve nearly one-fifth of private rental homes.

The referendum vote has yet to be implemented, but it is now likely that there will be a second referendum, which if passed would be legally binding, unlike the first one. A shift of this kind in one of Europe’s biggest cities could offer a model for activists to emulate elsewhere.

Spain, under its center-left premier Pedro Sánchez, has recently grabbed attention with a series of eye-catching social democratic proposals. Building on the introduction of rent controls in 2023, the Spanish government has announced plans for a 100 percent tax on homes bought by nonresidents from non-EU countries, a public development company, and the construction of 93,000 new public homes.

While the expansion of public housing represents a move in the right direction, the scale is quite modest. With the existing baseline in Spain very low, the government’s plan would still leave the proportion of social housing in the country far below the EU average or levels in countries like France and the UK. It is not likely to match the scale of public housing programs we saw in many countries during the postwar decades.

Developments in Barcelona might seem more promising. Since Ada Colau became its mayor in 2015, the city has sought to emulate “Red Vienna,” the European city with the strongest public housing infrastructure. However, this attempt at radical reform may well be at risk since Colau lost the position of mayor to a center-left politician in 2023. The efforts to date have not been enough to keep rents in check after Catalonia’s rent controls were ruled to be unlawful.

Decades of privatization have reoriented Europe’s housing systems, making housing less affordable, less secure, and less equal. The same trends have increasingly handed over the management of development and the built environment to real estate capital and the market.

This model will not be displaced without a major, concerted effort. State capacities for public housing, development, and urban planning will take time to rebuild, precisely at a time when the severity of the crisis demands urgent action. But this does not mean that many of the familiar tools that delivered gains for the working class in the past are no longer capable of rescuing Europe from the depths of its housing crisis.

Expansion of public housing, moving further in the direction that we have already seen in cities like Barcelona and Berlin represents a shift away from neoliberalism. With the right approach, it also has the potential to function as a structural reform of the kind described by left writers such as André Gorz and Ed Rooksby — one that, in the words of Gorz, is designed to “break the ‘equilibrium’ of the system.” That means public housing should be more than just a way to ameliorate housing poverty and insecurity, vital as these goals are.

It should also hand real control to tenants and stand as a viable, desirable, and even preferred alternative to home ownership. Principles of “public luxury and abundance” are a prerequisite here. A new system of housing development and urban planning could take on a similar strategic orientation, enabling the democratization and socialization of the development process — the questions of what gets built, how, and for who — as well as the institutions that make it happen.