European cities are taking very different approaches to the same housing problem: how to provide homes that ordinary households can afford as land, construction costs and private rents rise.
Vienna has spent decades building a large municipal and cooperative housing sector. Basel uses publicly owned land to support cooperative housing. Paris is combining public housing targets with planning measures and the conversion of existing buildings. Prague is developing below-market rental homes aimed at essential public-sector workers.
Ireland has taken a different route with Cost Rental, a relatively new form of long-term rental housing designed to operate below private-market rents.
New research from the Economic and Social Research Institute suggests the model is already producing a substantial difference in housing costs.
An ESRI study published in April found that Cost Rental homes were, on average and at the median, 29.9% cheaper than comparable market rents after accounting for differences between the properties.
The research also found that Cost Rental remains heavily concentrated in urban areas, particularly Dublin suburbs, highlighting a question that will become more important as the sector expands: where should these homes be delivered?
Vienna has built public housing into the city
Vienna is one of Europe’s longest-established examples of large-scale public involvement in housing.
The City of Vienna says there are about 220,000 city-owned apartments and 200,000 cooperative apartments in the capital.
That gives public and cooperative housing a much larger role than simply providing a small safety net for the lowest-income households.
Vienna’s municipal housing system developed in response to severe housing shortages and poor living conditions after the First World War. Over decades, the city continued to add to its housing stock and support cooperative housing.
The result is a large pool of homes operating outside the conventional private rental market.
For Ireland, the important feature is not simply the number of homes. It is the fact that affordable and publicly supported housing has become a permanent part of Vienna’s housing system rather than a short-term response to a particular housing shortage.
Basel uses public land to support cooperative housing
Basel has taken a different approach by using public ownership of land to support housing development.
The canton of Basel-Stadt provides land to housing cooperatives under long-term building-right arrangements. The arrangement allows developers to build and use the land without having to purchase it outright.
The canton says around 40% of cooperative housing in Basel-Stadt is located on municipal land provided under building-right arrangements.
The model allows the public sector to retain ownership of the land while housing cooperatives take responsibility for developing and managing homes.
Basel has continued to use the approach. In 2026, the canton announced the purchase of two sites with potential for almost 600 homes, with plans to make them available to housing cooperatives under building-right arrangements.
For cities where land prices make housing development difficult, retaining public ownership of land can therefore be one way of reducing the amount developers have to spend acquiring sites.
Paris is combining public housing with existing buildings
Paris has set a target of having 40% public housing by 2035, comprising 30% social housing and 10% affordable housing.
The city’s approach involves more than new construction.
Paris has used planning rules, acquisitions and reserved sites to increase the supply of social housing. Its housing strategy also identifies offices, hotels, garages and other existing buildings as potential sources of additional homes.
The city has also established a public affordable-housing structure aimed at expanding rental housing for households that sit between traditional social housing and the private market. Paris says some of this housing can be offered at rents at least 20% below current market levels.
The Paris example shows how cities can use planning, land acquisition and changes to existing buildings alongside conventional housebuilding.
Prague is using affordable housing to support essential workers
Prague is taking a more targeted approach.
An initiative backed by the European Investment Bank and Czech bank Česká spořitelna is developing more than 700 affordable apartments across four locations, with the homes intended for long-term rental to public-sector workers including nurses, teachers and other essential workers.
A later EIB account of the programme says the wider financing framework is supporting more than 1,000 affordable homes in Prague. Rents are expected to remain around 20% below market levels, helped by economies of scale and other operating efficiencies.
The policy is aimed at a problem faced by many expensive cities: workers may have jobs in the city but struggle to afford housing close to where they work.
For Prague, affordable rental housing is therefore being linked directly to the ability of essential public services to attract and retain workers.
Ireland’s Cost Rental model
Ireland’s Cost Rental system is based on a different principle.
Cost Rental was introduced under the Affordable Housing Act 2021. The model is intended to provide long-term rental housing at non-market prices, with rents linked to the economic cost of providing and managing the homes rather than simply following private-market rents.
The tenure is aimed largely at households who do not qualify for social housing but may still struggle with private rents.
The latest ESRI research provides the clearest evidence yet of the difference in price.
Using administrative tenancy data and a like-for-like comparison with private rentals, the ESRI found an average and median Cost Rental discount of 29.9%. The researchers also found that simple comparisons understated the difference because Cost Rental homes tended to have higher quality characteristics.
For a household paying rent every month, a difference of that size can leave more money available for food, energy, transport, childcare, savings and other household expenses.
Cost Rental remains relatively small
The ESRI research also points to a limitation of the model: its current scale and geographic distribution.
Cost Rental provision has so far been concentrated in urban areas, particularly Dublin suburbs. The ESRI said expanding the tenure into other urban centres and regional towns facing affordability pressures will be important as the sector grows.
That matters because housing affordability pressures are not limited to the capital.
Different parts of Ireland face different combinations of rents, house prices, employment opportunities, transport links and housing supply. Expanding Cost Rental therefore involves decisions about where homes are built as well as how many are delivered.
The ESRI has also suggested reviewing the scheme’s income thresholds over time to broaden its reach across households and locations.
The next question is scale
The Irish government is already delivering housing through several programmes, with Cost Rental forming only one part of the wider system.
The Department of Housing’s Q1 2026 Construction Status Report covered 52,523 new-build social homes across 3,208 schemes. But that figure includes projects at different stages of development. At the end of the quarter, 9,935 homes were on site and another 13,322 were at design and tender stage, giving a combined 23,257 homes at those two stages.
Cost Rental sits alongside social housing, affordable purchase schemes and private housing in Ireland’s broader housing system.
Its potential impact will therefore depend not only on the discount offered to individual tenants, but on how many homes can be delivered and where they are located.
Different systems, different tools
The European examples do not point to one housing model that can simply be copied.
Vienna has built up a large municipal and cooperative housing stock over many decades.
Basel has used public land ownership to support cooperative development.
Paris is combining public housing targets with planning powers, acquisitions and the conversion of existing buildings.
Prague is using below-market rental housing to support key public-sector workers.
Ireland is developing Cost Rental as a long-term rental option between traditional social housing and the private market.
The systems are shaped by different histories, land markets, planning rules, institutions and sources of housing finance. What works in one city cannot necessarily be transferred directly to another.
For Ireland, the more immediate question is how Cost Rental develops from a relatively new tenure into a larger source of affordable housing.
The ESRI’s research shows that where Cost Rental homes are available, the difference in rent can be substantial. The challenge now is increasing supply, extending the model beyond its existing urban concentration and maintaining a financial structure that allows lower rents to continue over the long term.
