The buzziest topics these days all seem to have the word “crisis” attached to them. Cost of living crisis, financial crisis, immigration crisis, everything is a crisis, but it is a bit tougher to explain exactly how we got to this point. In particular, the housing crisis is the one that has spiraled so spectacularly that ordinary young people feel discouraged at the prospect of ever achieving financial or housing stability, much less the common objective of homeownership. Work hard and you’ll be able to buy a home, they said. For the last few decades, that dream has been steadily slipping further from reach. 

So what happened? How has this crisis reached all corners of the globe, crossing continents and cultures? And what is the future of housing if these problems are not addressed? Experts in academic and economic spaces point to multiple common contributing factors that brought us to where we are today, such as high interest rates, the wages not keeping up with inflation, a rise in investment from wealthy property owners, regulatory hurdles for building COVID-19’s lasting impact on supply chain issues and construction costs, and many more. Pick your poison, but the story stays the same: finding and keeping affordable housing is becoming more and more untenable for ordinary people.

Comparing the Crisis

In each global region affected by the housing crisis, more specific components intensify the situation. The European Union has witnessed a 55.4% average increase in house prices in the last decade, according to Eurostat, while rent increased by 26.7%. In the fourth quarter of 2024, European house prices increased by 4.9% compared to a year earlier.

Figure 1: Housing protests in Spain in 2025. Source: Euronews

In popular vacation destinations, like Spain, surging tourism has dramatically affected the housing market. Over the last decade, nearly 10% of housing stock has been scooped up by investors or turned into rentals for tourists, driving scarcity up and even driving residents out of their homes in the process. Spaniards have been extremely vocal in their response, with hundreds of thousands partaking in nationwide protests ahead of peak tourist season this year to rail against the greed of industry leaders and their seizure of community resources.

The growing focus on short and medium-term rentals as money-making machines has changed the face of neighborhoods across Europe as a whole, as low transparency and regulatory challenges continue to extend far beyond the current capabilities of public authorities to curb the issue. In countries like the Netherlands, where 25% of homes in its four largest cities are owned by private investors, policy measures have actually accelerated the decline of affordable housing. The government’s mortgage tax relief program that was meant to encourage first-time homeowners wound up helping those who already owned property to invest in more. The affordability problem is expected to persist, especially after a late 2024 move by the Dutch Cabinet to cut that relief tax rate for the lowest earners while raising it for higher ones. 

Figure 2: Apartment buildings in Seoul. Source: The Korea Times

Half a world away, the Republic of Korea (ROK, also known as South Korea) is facing its own set of challenges due to its unique rental system and a top-5 household debt level amongst OECD countries. The jeonse rent system relies on large deposits amounting to 50-80% of the property’s market value on average rather than high monthly rent. This means tenants often have to take out loans to afford them. The resulting debt has made many “house-poor,” where they own real estate but have little liquidity. As thousands flock to South Korea’s biggest cities in search of better opportunities for work, education, healthcare, and more, the cost of living in those cities has soared alongside demand for housing and services. Even if people are eligible for a loan to pay their jeonse, property owners often cannot guarantee the deposit return and often auction off properties to redevelopers, who cannot always build as construction costs and interest rates remain high. And so the cycle of unaffordability continues.

Then there is the migrant and refugee crises. In the United States, as well as some European countries, newcomers are often blamed for housing shortages. Yet housing units seem to have increased by a greater number than households in the U.S. over the last century, meaning that the situation cannot be solely attributed to either supply or demand forces. Rather than pointing to an influx of migrants themselves as a cause of the nation’s woes, some economists are drawing attention to an influx of so-called “dirty money.” This term refers to illicit, commonly laundered funds, which are funneled through foreign bank accounts and shell companies into luxury housing units in major American cities. These assets then essentially function as havens for illegally acquired wealth to sit pretty and eventually price ordinary Americans out of the housing market. 

When coupled with all the other common factors at play, it’s no wonder that homeownership is becoming more of a pipe dream for young and working populations. As a result, many are forgoing that goal entirely. Anecdotally, the idea of owning a home is usually addressed as more of a luxury than a necessity for life fulfillment. It would be nice to attain, but it’s just not realistic these days.

Addressing the Problem

So the contributions to the crisis become more clear when we consider private investment, holiday rentals, failed policy measures, unstable rental systems, assets at illicit money havens, and all the rest of it. But what have governments tried so far to ease this weight on citizens?

In the summer of 2024, European Commission President Ursula von der Leyen announced the creation of  a Housing Commissioner position to lead a series of brand new initiatives to tackle the housing crisis in Europe. This task force has insisted that the solution cannot simply be to build more housing but to focus on “delivering the right kind of housing to meet local demands,” with social impact at the forefront. However, many have called into question the actual feasibility of change from within the European Union when so much of the implementation comes down to national policy and funding. Acknowledging the problem is one thing, but addressing it on a local level is another challenge entirely.

One possible example of successful, yet notoriously complex, policy in this regard is Vienna, Austria, whose government’s housing program has been pulling attention in recent years. As of February 2024, 60% of Vienna’s residents live in social housing units, made possible by a combination of policies focused on rent controls, subsidies, and landlord-tenant regulations. As a result, only 7.4% of housing stock in the city is for-profit rental and many Viennese report that the living standards and benefits of social housing surpasses that of private housing options. 

Spain, on the other hand, is taking a different tactic: a 100% tax on foreigners, aimed at deterring outside investors from holding their wealth in these assets to the detriment of Spanish citizens. The U.S. President Donald Trump has proposed the use of federal land to develop new housing, but that brings with it a whole host of environmental and logistical challenges that would most likely take such a program years to get off the ground. The slow-moving nature of construction and bureaucratic hurdles mean that relief for prospective tenants and homebuyers is hard to come by in any short-term sense.

Shifting Perspectives

While policy to tackle the myriad issues in housing has largely struggled to offer meaningful reversals of this crisis, activists like Brian Goldstone and Gary Stevenson have encouraged an entire social mindset change to truly address housing issues from the ground up. 

Figure 3: A house for sale in the USA. Source: Mansion Global

There are already signs of a generational shift in who is purchasing homes: in the U.S., baby boomers were the biggest group of buyers in 2024, eclipsing their younger millennial counterparts. What’s more, half of older Americans are paying in cash, contrasted with the 90 percent of millennials who must finance their homes through mortgages. 

Beyond a demographic shift in housing, there are signs of a shift in the appeal of public housing options. What was once a source of stigma and shame has become more attractive as people are pushed out of the private market and even into homelessness. Vienna’s success in that regard has spurred excitement over the potential of implementing similar models in other cities. 

Brian Goldstone, a journalist and author, has written extensively on the working homeless in America and is a proponent of reinvestment in public housing. In an interview about his book, There is No Place For Us, he asserts that the main reason for homelessness in the U.S. is quite simple: people don’t have access to affordable housing. Homelessness itself is not straightforward, either. Goldstone alludes to the myth in America that people with full time jobs should be able to find decent, stable housing, but that the volatile, insecure nature of  work in the 21st century has led to an increasing “working homeless” population. To adapt to current realities, he believes that we must start treating housing as a basic necessity and human right rather than as a commodity or asset.

Gary Stevenson, an economist and former CitiBank trader, has recently gained notoriety for his campaign to bring awareness to growing wealth (not income) inequality. He created a YouTube channel, GarysEconomics, with the intention of spreading awareness of how the rich will continue to accumulate wealth while the middle class and working people lose their ability to hold any assets at all as prices rise. His solution is to redistribute wealth through taxes on the ultra wealthy. But some economists question his theories and insist that extreme wealth taxation is not necessary for reducing the kind of inequality that Gary talks about. Criticism hasn’t stopped Gary from accepting guest spots on a plethora of media in recent months, and his own channel’s subscriber growth shows no signs of flagging anytime soon. His ideas have clearly found an audience.

Conclusion

Whatever the causes, whatever the proposed solutions, whatever the approach, one thing is clear: the global housing crisis is one of the most pressing issues of the past few decades, and it’s only getting worse. Without substantial efforts to reverse trends in homeownership, living standards, and affordability, national governments and local policymakers risk alienating the people they serve as the situation grows more dire for the more residents over time. But with growing awareness of success stories, like Vienna and the commitment of passionate activists around the globe, we may yet witness a paradigm shift in the way we approach the crisis. Where we go from here is up to all of us.

Mary Zopf
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