European Commission launches consultation on revised State aid rules to support affordable housing
On 3 October 2025, the European Commission announced a public consultation on the revision of the State aid rules governing services of general economic interest (“SGEI”), with the aim of enabling Member States to support affordable housing more effectively.
The initiative marks a key step in the Commission’s broader efforts to address the growing housing affordability crisis across the European Union. Indeed, Commissioner Ribera’s letter of mission provides for the explicit mission to propose a revision of the State aid rules to enable housing support measures, notably for energy efficiency and social housing.
The consultation is open until 4 November 2025 and invites input from citizens, businesses, public authorities and associations via the Commission’s competition website.
The Commission acknowledges that its Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (the “SGEI Decision”) is no longer fully suited to address the challenges of today’s housing market, where affordability concerns extend beyond traditional social housing aimed at by the SGEI Decision. The planned revision introduces a new category of exemption under the SGEI Decision for affordable housing, allowing Member States to grant State aid without prior notification to the Commission.
Under the proposed revision, affordable housing is defined as “housing for households who are not able, due to market outcomes and notably market failures, to access housing at affordable conditions”. This new category recognises that market dynamics, such as rising demand in urban areas, escalating costs and insufficient supply, prevent low-income households from accessing suitable housing. By broadening the SGEI framework, the Commission seeks to ensure faster and simpler procedures for granting aid while maintaining the principle of subsidiarity, enabling Member States to tailor measures to their specific housing contexts.
Access to affordable housing remains one of Europe’s most pressing social challenges. As Executive Vice-President Teresa Ribera noted, addressing this issue requires coordinated action across authorities, and the Commission is responding by proposing a targeted revision of the SGEI rules to facilitate public funding for affordable housing.
In addition to housing, the draft revision of the SGEI Decision proposes updates in other sectors, including critical medicines, aviation and maritime transport. These updates aim to modernise and simplify the existing rules.
The draft revision builds on feedback from a Call for Evidence and an initial public consultation held in June and July 2025, which attracted more than 250 responses. A “reality check” meeting with Member States and stakeholders provided further insights into the practical barriers encountered when applying State aid rules to affordable housing initiatives.
The ongoing consultation will help the Commission refine the draft text to ensure the revised Decision effectively supports investment in affordable housing while remaining consistent with EU competition principles. The final revised SGEI Decision is expected to be adopted by the end of 2025.
Unfortunately, the revision of the EU State aid rules does not solve the issue of national budgetary constraints.
CMS has the widest coverage and largest team of State aid specialists in Europe. In addition, we have extensive experience in setting up aid schemes and support measures for individual projects.
Please feel free to consult our brochure to find the CMS contact in your jurisdiction.
Below is a link to the CMS expert guide on State aid: State aid legal guide | CMS Expert Guide
Annabelle Lepièce, partner, and Tatiana Dragojevic, junior associate, CMS Belgium, e-mail: Annabelle.lepièce@cms-db.com and Tatiana.dragojevic@cms-db.com
