An alternative housing system is emerging across Catalonia aiming to tackle the housing affordability and climate crises simultaneously. Although still in its nascency, the system’s success – grounded in the collaboration of public, private and social actors – could set an invaluable blueprint for achieving a just climate transition in the global housing sector.

When it comes to being evicted from your home, it’s the wait that kills you. At least, that was Adama’s experience. She and her family had lived a comfortable four years in her modest flat in the El Clot neighbourhood of central Barcelona, until one day her landlord quadrupled her rent. Unable to pay, Adama appealed the eviction in the courts, arguing she had never previously missed a payment and the increase was unreasonable. The legal process was drawn out over almost three years. “It’s a living nightmare I wouldn’t wish on my worst enemy,” she says. “You don’t know if you’ll be out on the streets tomorrow. You can’t eat. You can’t sleep. You can’t live.”

Adama had moved her husband and two children to Spain from her native Guinea-Bissau in 2004 seeking advanced medical support for her chronic mobility problems. Her flat was old, mould crept up the bathroom tiles, and in summer the indoor temperature could easily top 35°C – but it was home. Until it wasn’t: Adama lost her appeal and the family had to move out.

Adama’s story is far from rare. Rents in Barcelona have risen 68% on average over the past decade driven by over-liberalisation of the housing market and growing influxes of tourist rentals like Airbnb. And the wages of the lower-income families have failed to keep up.

On top of that, 80% of Spanish homes are energy inefficient and poorly insulated, and the poorest often live in energy poverty trying to service their extortionate utility bills. Barcelona, in particular, is increasingly feeling the brunt of rising temperatures, with summers now characterised by 40-degree heat and stifling humidity – “we are already affected by climate change here,” attests Adama.

Like most countries, Spain is desperately trying to retrofit, refurbish and renovate its housing stock to align it with its net-zero emissions target by mid-century. Yet the costly construction works these new sustainability standards require can often raise housing prices beyond the means of society’s poorest. But there is little for them to fall back on: just 2% of the country’s housing stock is classified as social or affordable housing, compared to an EU average of 9% and over 30% in countries like the Netherlands.

Barcelona has become the poster child for a global housing crisis fast sweeping across most developed economies, culminating in a spate of anti-tourism protests. According to OECD data, housing prices have outpaced income growth in most developed economies since the 2000s. But across the world, housing systems everywhere are buckling, and more than 1.6 billion people now lack access to adequate housing, according to The United Nations Human Settlements Programme (UN-Habitat). From New York to Nairobi, London to Lahore, rents are soaring and homeownership is becoming a pipedream for the young and working classes. The crisis is most acute in Europe: across the EU, average rents rose by 20% in the last decade, while home purchase prices increased by 50%.

But housing isn’t just a social issue, it’s an environmental concern too. After factoring in construction and operation, the built environment is the source of 40% of the world’s carbon dioxide (CO2) emissions. So any attempts to solve the housing crisis must factor in the sustainability concerns, with the two aims often in conflict – affordability coming at the cost of sustainability, and vice-versa. Simply building more housing will not suffice: one recent study indicates that the maximum number of houses that can be built within the carbon budget per year would be around 176,000 for the whole of Europe.

But Barcelona’s parent region of Catalonia is proving Plato’s adage that “necessity is the mother of invention” and is brewing something different. A new housing model is emerging quietly but resolutely across the region; one that prioritises people’s needs over profits. Rather than driven by a single actor or institution, this new model is advanced by collaboration between local and regional authorities, non-profit housing associations, tenant cooperatives, enabler platforms and private-sector firms – perhaps better described as an organic ecosystem than an intentional system. And it treats housing not as a speculative financial commodity but as essential social infrastructure, aiming to provide truly adequate housing to its entire population – namely, affordable, sustainable and climate-resilient.

“Housing is a human right,” says Joan Ramon Riera, Housing Commissioner at the Barcelona City Council. “But it’s also a lever for climate action, for economic inclusion, for public health. The question is: who do we build for, and how?”

Adama lives in Barcelona’s Sant Andreu district. Her apartment is adorned with photos of her family, African artwork and images of Barcelona’s iconic footballers. The flat is cool and breezy despite the suffocating humidity outside. “It’s cool in the summers, and warm in the winters,” she says gratefully. The building is Casa Bloc, a 1930s modernist complex that lay derelict for years before being restored by the housing association Hàbitat3 – a non-profit that provides social housing and other housing options like shared ownership homes at affordable rents. Triple-glazed windows keep the noise and heat out. A communal heat pump system, provided in collaboration with energy giant Ariston and telecom company Cellnex, cuts bills and carbon. “Now, we have peace,” Adama says. “It’s not just a flat. It’s our home.”

It’s places like Casa Bloc where Catalonia’s vision for an alternative, ‘needs-based’ housing system is coming to life, born of a unique collaboration between public, private and social actors: financed with EU climate funds, managed by a non-profit housing association, renovated by private businesses, and made feasible and affordable by progressive public planning policy. “This kind of cross-sector cooperation is unprecedented in Spain,” says Natalia Martínez, director of partnerships at Hàbitat3. “And it’s what makes the Catalan model work.”

The building now houses 17 families who, like Adama’s, were at risk of homelessness; some fleeing domestic violence, others recovering from long-term illnesses. What unites them is they were all at risk of falling through the crack between the private rental market and public services. Hàbitat3 offers them not just housing but wraparound social support, funded through a blend of philanthropic, public and private capital.

According to Maria Vassilakou, former Deputy Mayor of Vienna and a housing advisor to the EU Mission on Climate-Neutral and Smart Cities, what makes Catalonia stand out is the emergence of a comprehensive ecosystem of stakeholders. “They are not just building projects, they are building institutions,” she says. “And those institutions are redefining what housing can be: green, inclusive, permanent, dignified. This is what a just transition in the built environment looks like.”

The history: key milestones in the emergence of the system

During the 20th Century, Spain's government had invested heavily in developing Viviendas de Protección Oficial (VPOs) – affordable homes with capped prices designed to help the Spanish population get on the housing ladder. These VPOs were subsidised by the government, built by private developers and purchased by lower income families who had registered to access them at affordable prices fixed by the government. The VPOs were a important mechanism in lifting Spanish families out of poverty and consolidating a middle class in the country after the Spanish Civil War. However, the owners of the VPOs were allowed to sell them on the private housing market after a certain amount of years. Hence, by the turn of the millennium most of the VPOs had been sold off to the private market and the country was left with one of the lowest proportions of social or affordable housing in Europe.

When the global financial crisis hit in 2008, Spain was uniquely exposed: in the preceding decade, it had built more homes than the UK, Germany and France combined – with real estate powering 18% of GDP growth. The bursting of the property bubble had devastating consequences, with 3.5 million homes standing empty and half a million families turfed onto the streets.

“The financial crisis exposed the fragility of Spain’s housing model, which had long prioritised homeownership, often linked to speculative intentions, over rental or social housing. This model was reinforced by policies that encouraged buying,” recalls Ivó Valdivielso, CEO of the labour inclusion charity Mansol Projectes. “When the housing bubble burst, mass evictions followed and banks accumulated thousands of empty homes.”

Public outrage ensued, and in 2009 grassroots movement La Plataforma de Afectados por la Hipoteca (PAH) was born in Barcelona, blocking evictions and campaigning for housing to be treated as a human right rather than a financial commodity. Meanwhile, Catalonia’s long tradition of cooperativism was waking up. The region’s social and solidarity economy – an informal movement of citizen-led cooperatives, foundations and mutual aid organisations – was emerging as an intermediary alternative to the failing duopoly of market and state. “There was a realisation that neither the private sector nor public institutions could meet basic needs,” says Jose Téllez of Sostre Cívic, a cooperative housing organisation. “So we started to build something new – from the ground up.”

One of the first innovations came from Hàbitat3, which offered landlords of vacant flats an unconventional deal: Hàbitat3 would rent their properties as social housing, and in return guarantee rental income, cover renovations and manage the tenancy. And these renovations would be carried out by social enterprises training marginalised workers, providing dual social benefits. By 2015, Hàbitat3 had secured hundreds of flats across Catalonia. “It was a triple win – for tenants, for owners, for society,” says Martínez.

The cooperatives were busy innovating too. In 2011, Sostre Cívic launched its first grant-of-use co-housing project, inspired by models in Uruguay and Northern Europe. Instead of renting or owning, residents collectively held rights and co-managed the building, encouraging democratic governance, long-term affordability and ecological design – with environmental sustainability representing a key pillar of its mission. Completed in 2018, Barcelona’s La Borda became a flagship project – a near-zero-emission, timber-framed building constructed with participatory methods, and funded by Built By Nature, a grant-making fund dedicated to accelerating the timber building transformation in Europe.

As the movement matured, the actors institutionalised. Sostre Cívic established La Constructiva in 2016, an in-house construction cooperative dedicated to sustainable building and fair labour practices. “We needed to take control of the supply chain to match our values,” says Téllez. And new social actors cropped up to service the growing needs of this burgeoning ecosystem, including cooperative architects, engineers and financiers.

The public authorities began to take notice. In 2015, PAH co-founder Ada Colau was elected as the first female Mayor of Barcelona, promising to tackle the city’s pernicious housing crisis. And in 2018, the Catalan Housing Agency launched the Right of First Refusal framework, allowing municipalities to buy foreclosed homes before private buyers and assign them to non-profit housing associations, which were also equipped with subsidised finance from the Catalan Institute of Finance (ICF). Properties were granted on 75-year leaseholds to ensure long-term affordability and eventual return to the public stock.

Two years later, Barcelona City Council – which plays a leading role in Catalonia's housing system by implementing municipal policies, collaborating with the Catalan Government through joint bodies, managing its own public housing stock, and providing direct support services to residents – built on this collaboration by launching the ESAL Agreement. This allowed housing associations to bypass competitive tendering and access 99-year surface rights to build affordable homes on public land. “That changed everything,” says Sergio Rodríguez, director of housing association la Fundació Habitatge Social. “It allowed us to plan, to grow, and to build at scale.”

Between 2020 and 2025, Catalonia saw a spate of developments: eco-certified senior residences in Terrassa, accessible homes for people with intellectual disabilities, youth-led renovations in Sant Antoni de Calonge. Bougie beachtown Sitges became a surprising hub for ESAL-backed social housing, with four housing associations delivering coordinated projects.

The financing methods evolved and democratised. The cooperatives and housing associations turned to crowdlending, community bonds and hybrid capital stacks mixing private and public money – with ethical banks and impact investors entering the space. Similarly, construction methods diversified too – modular housing (building homes in factory-controlled conditions in sections, which are then transported to a site and assembled – decreasing the cost and time of construction) timber structures (timber is a renewable resource, and trees sequester carbon dioxide) and passive design (an architectural approach that uses natural energy sources like the sun, wind, and temperature differences to heat, cool, and light buildings, reducing the need for mechanical systems and lowering energy consumption) became common. “We’re not just talking about energy savings,” says Jan Vidal Arambilet, an architect at cooperative architecture firm Celobert. “These are buildings that promote community and resilience.”

Eventually, institutional recognition came rolling in. In 2019, Casa Bloc won the prestigious World Habitat Award. In 2022, the Catalan Parliament passed a resolution calling for a regulatory framework for cooperative housing; and in May 2025, the Spanish Congress Housing Committee voted in favour of a national policy supporting the model. Meanwhile, the Catalan regional Government launched Plan 50,000 – a pledge to build 50,000 public housing units by 2030, many of which would be co-produced with non-profit developers.

An embryonic breeding ground gradually grew into a self-supporting ecosystem. Municipalities began allocating land proactively. Barcelona integrated ESALs into long-term housing strategies. Cohabitac, a coalition of housing associations, became a formal policy interlocutor. “We were no longer a fringe,” says Xavier López, manager of Cohabitac. “We had institutional leverage.”

And importantly, this wasn’t just a novel experiment of Barcelona’s progressive elites. In rural Garrotxa, crowdfunded cooperatives took root. In Manresa, passive houses sprang up. In the metropolitan belt, rental flats were retrofitted for ageing populations. The movement expanded into the territories, becoming a vehicle for regional equity and resilience.

Between 2022 to 2025, the advocacy efforts of NGOs and think tanks gained crucial ground. Legal reforms accelerated. Climate debates reframed housing as part of the ecological transition. And policymakers began using ‘just transition’ language to describe housing in order to frame the shift as a systemic, justice-centered transformation – one that mirrored the social and ecological ambitions of the just transition in climate and labour fields. This established housing as a human right, called for democratically planned systemic change, and enabled local actors to connect their efforts with broader, global debates and resources. “We were confronting multiple emergencies,” says Joan Ramon Riera, Barcelona’s housing commissioner. “And this model – inclusive, democratic and green – addressed them all.”

Granted, today Catalonia’s needs-based housing system is still mouse-like in the face of the elephantine proportions of the prevailing market-driven model. Cohabitac – the umbrella organisation for the housing associations – still only manages 10% of Catalonia’s social rental housing stock. Yet the alternative system has grown phoenix-like out of the ashes of the 2008 crisis to become a credible contender in the institutional fabric. “We’re no longer in the pilot phase,” says Enric Fabra, technical secretary of Cohabitac. “We’ve built not just prototypes, but repeatable pathways.”

The ingredients: housing as a right, climate action as social policy, collaboration as method

Catalonia is now littered with new housing developments, retrofits and renovations that attest to the growing import of this needs-based system – each project boasting its own unique social purpose and sustainability measures. In place of speculative developers and exploitative landlords, this novel coterie of public, private and social actors are teaming up to produce housing around three principles of need: affordability, inclusivity and climate adequacy. These actors aren’t looking for quick returns, rather the long-term sustainable development of their territories and populaces; they’re looking to build the real economy, rather than the purely financial one; they prioritise cooperation over competition; and, above all, aim to instill dignified living into each of their projects.

These actors broadly fall into two categories: shapers – who deliver, manage and service the developments – and enablers – who work to advance broader growth of the system.

Chief among the shapers are the housing associations, such as Cohabitac members Fundació Hàbitat3, Fundació Habitatge Social, Fundació Salas, Fundación Familia y Bienestar and Fundació Nou Lloc. With a broader role than housing associations in other countries, they build, retrofit and manage sustainable social rental housing – and often provide social care to the residents. Then there are the cooperatives, such as Habicoop and Sostre Cívic, non-profit legal entities that own or rent property for its members, who are also tenants, who decide how the property will be run. Similarly, there are the cooperative firms like Celobert or La Constructiva, who provide services like architecture, design and construction to the system. And finally, you have the private companies, like Fundación Naturgy, Ariston, Cellnex, Arkenova, Omplim, Grupo Salas, who provide their services on a limited-profit basis to the project developers or managers.

On the enablers side, there are civil society organisations – such as The Tenants' Union of Catalonia and the Catalan Observatory of Human Rights – advocating for the right to adequate housing through civic mobilisation. There are NGOs that support cooperatives and housing associations through direct support or through advocacy for a more enabling policy environment, including Cohabitac, Xarxa Economía Social y Solidaria and the Pla Estratègic Metropolità de Barcelona (PEMB). There are the public authorities that provide enabling policy and access to land, such as local housing offices, city councils, mayors, the regional government and municipalities. And there are the financial institutions, who provide impact capital (generating a measurable social or environmental impact alongside a financial return) for the projects, including Institut Catalan de Finanzas, Instituto de Crédito Oficial, Triodos Bank and Fiare Banca Ética.

The new system caters to different tiers of Catalan society. Although not designed exclusively along these lines, the social rentals run by housing associations tend to address the needs of the marginalised, whereas the cooperatives are typically occupied by middle class residents – each group facing different levels of affordability and climate-adequacy concerns.

“Utimately, we believe housing should be the fifth pillar of the welfare state alongside healthcare, education, pensions and social services,” says Hàbitat3’s president Carme Trilla, who is also president of Cohabitac. It is a sentiment shared by Barcelona Housing Commissioner Riera. Spain currently spends 7.5% of its GDP on healthcare, 4.5% of education and a mere 0.2% on housing. “But the cost of housing for the population ends up undermining the other pillars of the welfare state,” argues Trilla. “Private companies have an important role to play in the housing system, but it should be as service providers rather than managers and owners, as they do in areas like healthcare.”

The projects born of Catalonia’s new housing system take manifold form. Take Adama’s Llar Casa Bloc in Sant Andreu, a once‑dormant wing of Sert and Torres Clavé’s rationalist icon. In 2020, Hàbitat3 teamed up with social services and carved 17 small flats, designed for around 40 occupants, out of the structure. Telecoms firm Cellnex wired the building to narrow the digital divide; the Naturgy Foundation helped tackle energy poverty through energy management training and financial support; Ariston donated hybrid hot‑water units that cut bills and emissions. Residents pay social rents; support is on‑site but non‑intrusive; the architecture restores dignity of comfortable living. The result is conspicuously low‑carbon and high‑care, and – crucially – replicable. For Hàbitat3’s Martínez, the point is simple: “We are showing that housing can be stable, supportive and low‑carbon at the same time.” Pacqui Luna, Hàbitat3’s technical lead, insists: “The building is a demonstration, not a pilot. It’s meant to set a pattern others can copy.”

Thirty minutes south of Barcelona in Sitges, two new developments – Marinada (43 homes) and Terral (63 homes) – show that social developers can deliver affordable, climate-friendly housing at pace. “Sitges is one of the most expensive rental markets in Catalonia – around €18 per square metre on average” says Marina Gallego, president of housing association Fundació Grup Qualitat. “In these developments, we got that down to €6 per square metre.” Fundació SALAS served as social developer; the municipality provided land and political support; and Fundació Grup Qualitat, Nou Lloc and Familia i Benestar Social (FIBS) now manage the rentals. The buildings carry AA energy ratings; communal heat pumps and solar energy systems, careful orientation and the kind of shading and cross‑ventilation that keep flats comfortable through Mediterranean summers come as standard.

For Marinada resident Jordi, a retired butcher, the development meant that he was able to stay in his hometown. “Otherwise I wouldn’t be able to afford to live here anymore – prices have gone up so much,” he says. “Now, I save money on my bills, and I’m a lot more comfortable in the winters and summers.”

In Sant Feliu de Llobregat, a satellite town west of Barcelona, the Adela Barquín residence (90 flats) reframes ageing not as a clinical condition but as an urban design brief. “It’s a rental building for independent people over 65 who want to live with support and community,” explains director and social worker Laura Parrado. There is a concierge on weekdays, shared spaces, activities from morning to evening, and a rent of roughly €500 – compared to the average Barcelona rent of €1,193, this is enough to be sustainable for the housing association yet low enough to be affordable for the residents. The building embeds active‑ageing principles: smaller, manageable flats; comfortable insulation and circulation; programmes that create chance encounters and community; and a support team that is present but not paternalistic. The result is a building that reduces downstream health and care costs while giving people an age‑in‑place path that is conspicuously absent in most Spanish cities. “It is about ageing with autonomy,” says Josep Maria Puig, president of Fundació Família i Benestar Social, the foundation managing the property.

The building was designed with a passive approach, an ultra-low-energy method aiming to create a comfortable indoor temperature using minimal conventional heating or cooling. Its Airzone technology, powered by rooftop solar panels, reuses air to heat and cool the building. “I used to feel incredibly isolated in my old flat, and I would also dread the sweltering heat of the summers,” says retired fishmonger Lucía. “But now I don’t even notice the temperature anymore and I feel part of a real community.”

And in the Roquetes neighbourhood of northern Barcelona, the Cirerers building has become a flagship of the cooperative housing movement: a timber‑framed building, containing 32 dwellings, apartments, flats and community spaces distributed over 8 floors, developed by Sostre Cívic on land granted by Barcelona City Council. Storing 660 tonnes of carbon in its wood structure, Cirerers won the sustainability prize at the 2022 Advanced Architecture Awards. “We have a central aerothermal system that distributes heat and cold throughout the building,” explains Celobert engineer David Fernández Gutiérrez. “And each private space also has a dual-flow ventilation system with a heat recovery unit. As a result, the interior temperature is maintained and much less energy is consumed.” This is a win-win for both residents and the environment. “It is the first time in my life that I’ve found the Barcelona summers bearable,” reports Homera, a tenant of four years.

The project has also become an exemplar of collaboration amongst this social and solidarity economy: built by La Constructiva, the design was led by Celobert, building and works insurance by Arç, cooperative planning by Matriu, legal advice by Col·lectiu Ronda, economic and fiscal support by Gestió Integral, with the building financed by Fiare Banca Ètica. “It’s really about living in a building rather than just a flat,” says tenant Eva. “This kind of community living is the perfect antidote to the loneliness epidemic that exists in cities like Barcelona.”

And in Sant Ildefons, a 1960s neighbourhood in the municipality of Cornellà de Llobregat, the lens pans out to a whole district-scale retrofitting. Daniel Broto, director of land and housing in Cornellà de Llobregat, calls it “an operation in social surgery – done block by block, family by family.” Targeting 45% energy savings, 49 buildings comprising 1,113 flats are being upgraded: insulation, new lifts and balconies, efficient windows and rooftop solar. The funding is a layered blend of NextGenerationEU grants, ELENA (European Local ENergy Assistance) technical assistance and European Investment Bank debt – exactly the type of layered finance a lower‑income community needs to make deep energy-renovation possible. The Metropolitan Housing Consortium and the Cornellà council sequence works block by block, with Celobert architects and mediators sitting through owner‑community meetings that last late into weeknights.

“We talk about thermal bridges in stairwells and people understand – because it is their bills at stake,” notes Celobert architect Jordi Carbó. Grants and concessional loans cover most capex; owners contribute a share based on means and levels of participation; contractors are bound by social clauses for community input into the design and planning of the projects; scaffolding alternates to minimise displacement. “I can’t wait for the work to be completed, my flat is going to be so much more comfortable to live in – and beautiful to look at,” says Irene Fey Fayol, a local resident.

These projects represent a mere handful of the threads that make up the rich tapestry of Catalonia’s needs-based housing system. Each has its own place and purpose, but share the same primary ingredients: public land or acquisition, mission‑driven developers, grant‑of‑use cooperatives or social rental tenure, light social support, “fabric‑first” decarbonisation (improving the basic structure and envelope of the unit). The approach is repetitive but flexible, able to adapt to the given context: whether its gentrification in Sitges or decaying 60s tower blocks in Cornellà.

The report card: impressive results, but challenges persist

And the impacts are starting to feed into the numbers. Across Catalonia, there are around 60 cooperative housing projects, comprising 1,000 flats or houses, in various stages of development. Cohabitac’s housing associations also manage around 5,000 units across the region, which they forecast will increase by 1,600 in the coming years. And since its inception in 2020, Conveni ESAL has supported over 20 projects, with the aim of creating over 1,000 homes (rental and cooperative) in 10 years.

Indicators of the system’s emissions savings are also beginning to materialise: for instance, according to data from the Catalan Institute of Energy, the retrofits completed between 2020 and 2024 are saving an estimated 18,000 tonnes of CO2 annually. And energy poverty is decreasing in the participating neighbourhoods: households once spending 20% of income on utilities now spend less than 10%. One Barcelona city report found that for every euro spent on retrofits saved €2.30 in health costs and energy subsidies, demonstrating the multiplier effect that climate action often has on social equity. “If you find the right solutions, the social and the environmental impacts are often mutually reinforcing,” says Ángel Perez, director of energy management company SALAS Green Power. Compared to Vienna, Europe’s gold standard for public housing, Catalonia’s numbers are modest but impressive given its late start. And with a quarter of all its residents living in cooperative housing, Zurich provides an inspiration for what scale could look like for Catalonia’s nascent system.

There have also been benefits for Spain’s hard-hit construction industry. In the five years after the 2008 crash, the country’s construction industry lost 64% of its workforce and has never recovered. As well as adding projects to the industry’s pipeline, Catalonia’s alternative housing system is also recruiting and skilling a new workforce. The cooperatives and housing associations give priority for renovations and construction work to labour inclusion organisations like Mansol Projectes, a social enterprise that trains and employs people with disabilities, and those at risk of exclusion, to provide energy efficiency renovations in housing projects.

“For years, speculative housing shaped the direction of the construction sector,” says Ivó Valdivielso, CEO of Mansol. “We’re proud to be part of a fair and dignified alternative that puts people and purpose at the center of the supply chain.” Mansol has trained more than 400 workers in three years, many of whom have gone on to secure permanent, higher paid positions elsewhere. Their training now extends to renewable energy installations, creating a workforce skilled not only in housing but also in the broader green economy – an essential element for any economy given the already vast, and fast growing, global green skills shortage. Three years ago, Nacho, 53, was living on the streets trying to manage a drug addiction. Today he is living in his own flat and is one of Mansol’s most-productive employees. “I got lost in my life for a while and found myself with nothing,” he recalls. “Mansol was my salvation.”

Catalonia’s new housing model, however, is far from the finished article. If it is to thrive in the long term, and offer a credible alternative to the prevailing market-driven system, it must overcome a number of formidable challenges. Affordability is a perennial concern; with construction costs continuing to rise, and land values remaining high, rents have to balance out costs for viability. Similarly, sustainability can often be in conflict with affordability, with budgets often compelling compromises on materials or systems. Housing associations and cooperatives are also stretching the capacity of their relatively small teams, and can’t recruit fast enough to meet the growing demand. Similarly, skills shortages in the construction industry threaten to curtail momentum, with the industry’s low wages often failing to attract the next generation of labourers. And with the EU’s NextGen funding tapering off in 2026, with no guarantee of replacement, ongoing finance remains uncertain.

Furthermore, persistent regulatory hurdles allow landlords to convert regulated rentals into seasonal contracts, undercutting rent caps and leaving families in precarious arrangements. Many municipalities are also still to embrace the new model, and many private developers still consider social housing as a CSR obligation to fudge. There is also a risk of feeding “green gentrification”, where the addition of sustainable housing increases the desirability and, consequently, rents in a neighbourhood, pushing out low-income residents.

Indeed, tenant advocates argue that without affirming rent stabilisation, the needs-based system could be undone. “If policy doesn’t keep pace with practice, we risk social innovations serving only a lucky few,” says Carme Arcarazo, policy strategist and housing researcher at IDRA Barcelona Urban Research Institute and spokesperson for the Barcelona Tenants Union. “We need more hands, better wages, and more respect if we want to build a just transition.”

And for those countries struggling to get a handle on their own housing crises, beware of the temptation to over-simplify the problem as a mere imbalance of supply and demand. In Catalonia, and Spain as a whole, the years of the housing construction boom also oversaw the fastest rise in prices. Spain has become the poster-child of Europe’s housing crisis despite boasting one of the highest housing stocks per capita in the OECD, with more than 550 homes per 1,000 people.

It is therefore essential to distinguish between real demand – driven by the need for homes – and investment demand, which often fuels speculation at the expense of social and environmental needs. Across Catalonia, most visibly in Barcelona, housing has been increasingly used for tourism, seasonal stays or left vacant, inflating market activity without improving access to homes. So, as well as building new housing, it is also essential to ensure the existing stock is both effectively used and physically improved so it provides affordable, sustainable and climate-resilient homes for real people rather than for investment portfolios.

“Yes to more housing – but the right kind of housing,” concludes Arcarazo. “We need to return housing to its original purpose; we need to change the rules of the game to prioritise needs over profits.”

Retaining the current momentum is a fragile balance: it can tip forward into systemic change or backward into a failed experiment. But to guarantee the former – according to the representative of PEMB’s Housing Mission, Luisa Pinto – these actors must maintain the underlying ethic: housing as a right, climate action as social policy, and collaboration as method.

Achieving scale: from alternative model to mainstream

None of these challenges are insurmountable. Catalonia’s unlikely coalition of public, private and social actors are proving that a needs-based approach can not only take root, but flourish. The question that remains, however, is how to scale this alternative model for it to become a viable alternative to the prevailing one – and what lessons can be taken from Catalonia to help tackle housing crises currently unfurling the world over, from San Francisco to Sydney.

The pressing issue in Catalonia is bolstering the legislative framework so that it supports a needs-based approach, as opposed to a speculative one. Grassroots activists have learned from bitter experience how hard-fought victories must be protected from backsliding. The Catalan regional Government introduced rent caps in 2020, only for them to be reversed by Spain’s Constitutional Court shortly after. A national housing law then passed in 2023 re-asserting the regions’ right to introduce rent caps in “stressed” areas. Similarly, Barcelona City Council famously banned new holiday rental licences to crack down on Airbnb-style short-term tourist lets, only for landlords to find a loophole using 11-month "temporary" rental leases to attract high-paying digital nomads and foreign students – further inflating rental prices for locals.

“What we need is not only rent control on a portion of the market; we need the entire market under rent control,” says Arcarazo, “including mid-term rentals, co-livings, room rentals – otherwise we have massive loopholes.” This would mean open-ended leases that provide renters stability, and bans on purely speculative purchases by actors “who have no social or climate purpose”.

Indeed, without such protections, tenants may resist green renovations because they could result in rent hikes; but with them, they have more of an incentive to support, push for, and sometimes even pay for the improvements – which would ultimately drive forward to the transition.

The public authorities appear to be listening. In September, the national Government announced 53,000 illegal tourist apartments – including 7,700 in Catalonia – would be deregistered and put on the long-term rental market. Barcelona City Council is also moving to crackdown on 11-month temporary rental licences. And Catalan President Salvador Illa recently announced plans to tackle the region’s housing crisis using “all possible public-private collaborations”; aiming to build 214,000 new homes in the coming years – 40% of which will be official affordable housing. “When the market doesn’t work, we have to intervene,” announced Illa in an October 2025 speech. Furthermore, the passing of Spain’s first national housing law in 2023, enabling rent caps and new funds for social housing, suggests the formation of a new political consensus.

The next big question mark is over funding. Much of Catalonia’s spate of needs-based development has been funded by the EU’s NextGen recovery facility, which injected hundreds of millions of euros into housing rehab and construction. Those funds are set to expire by mid-2026, potentially creating a funding vacuum. “It is imperative to ensure a continuation of available funds to consolidate this emerging system,” notes Francisco Fernández Arias, director of housing assets management of housing association Fundació Habitatge Social. The Catalan Government is lobbying Madrid and Brussels to plug the gap, and there have been some promising signals: Spain’s Housing Ministry recently proposed a dedicated €7 billion programme over four years (2025–2028) to sustain social housing development. But activists say more is required: Trilla suggests public funding of housing must increase from 0.2% to 1% of GDP, equating to billions of euros, for the momentum to be sustained.

These efforts must also be further decentralised, notes Pinto, PEMB’s housing representative. Beyond the city of Barcelona, the wider metropolitan area includes 160 municipalities where 5 million people live – many confronting the same housing pressures. But only the 36 core City Councils have a coordinated housing consortium to help administer programmes like the EU NextGen funds. Smaller towns are often left struggling with “housing offices of two or three people” to apply for grants and manage projects, says Pinto. For its needs-based system to be a success in the long run, Catalonia will need to build up capacity across all regions – expanding metropolitan consortia and sharing technical resources – so that no town is left behind for want of expertise or staff. It’s a Heraclean challenge, but the momentum of recent years has given optimists belief that a paradigm shift in housing is achievable.

Lessons in replicability: a global just transition in housing

And while Catalonia forges a path forward, there will be many watching with keen interest from elsewhere in the world. Catalonia’s model is born of a unique set of circumstances: the 2008 foreclosure crisis, the tourist gentrification of Barcelona and the EU green recovery agenda. Nonetheless, the underlying principle of decommodified, needs-based housing is one that could be applied anywhere. And, with their own novel twist on the concept, countries like Uruguay, Denmark and Austria are doing just that.

Since the 1960s, Uruguay has become a pioneer of the cooperative housing movement, with cooperatives boasting 5% of the national housing stock. As in Catalonia, the Uruguayan Government supports the coops with low-interest loans and access to public land, recognising that this partnership dramatically improves housing access. Similarly, in Denmark around 7% of the population live in cooperative housing – rising to around a third in Copenhagen, allowing many middle-income families to live comfortably in a high-cost city. As with the Catalan equivalents, Danish coops traditionally limit equity growth to keep units affordable across generations. And in Austria, the ‘Vienna Model’ has become the gold standard for social housing. Decades of targeted public investment, and avoiding the allure of mass privatisation, means that today nearly 60% of Viennese residents live in housing that is either municipally owned or subsidised by the city. Considering housing as essential infrastructure like hospitals and schools, the city’s policy of retaining ownership of land and plowing public money into construction has kept rents far below other European capitals.

Catalonia has undoubtedly learnt from these forerunners. But where the Danes, Uruguayans and Austrians can learn from the Catalan approach is in its marriage of affordable housing policy with a drive towards sustainability of the built environment, which offers the potential to serve as a blueprint for a just housing transition worldwide. This “twin transition” of the social and environmental is something many aspire to, but are universally struggling to achieve. Although still early days, Catalonia is demonstrating how it can be done. “Along with Vienna, Catalonia’s model is probably the most progressive approach to affordable and social housing anywhere in the world,” says Vassilakou. “Where Catalonia builds on Vienna’s success is by tying in the sustainability side, and doing it not only in new constructions but also in renovating and retrofitting old buildings too.” Tübingen and Hamburg (Germany), Lisbon (Portugal), and cities across Switzerland are already drawing inspiration from the Catalan model, according to Vassilakou.

The model is perhaps most applicable to cities struggling with the same conditions as Barcelona: low public housing stock, surging rental and sale prices, and a construction sector faced with the challenge of bridging labour shortage, modernisation and increasing productivity. In Rome, for instance, long‑term rental stock is being lost to short‑term letting, tourism accommodation and speculative conversions – with affordability declining as a result. In Athens, tourism and second‑home demand is increasing rents and weakening access for local residents. And in Lisbon, tourism and investment‑driven tenancy is inflating rents. In each of these cities, social housing makes up less than 5% of the housing stock.

One of the most important lessons to take from the Catalan experience is that culture and collaboration matters just as much as cement and euros. But in that lies a number of questions about exactly whose responsibility it is to provide affordable and sustainable housing, and there are some key takeaways for each group of stakeholders involved – public, private and social alike.

For public authorities, Catalonia demonstrates the importance of taking an active quarterbacking role. The government doesn’t have to build every home, but it does have to define the “rules of the game” and provide early capital to tilt the scales toward affordability. Practically, that means things like renting out public land cheaply to cooperative or limited-profit developers; proffering public funds or EU grants as seed money in mixed-finance projects; and applying social conditions to each euro of sustainable investment. That also means wielding regulatory power boldly: taxing abusive speculators, mandating inclusionary zoning (Barcelona now requires 30% of big new developments to be affordable housing), or enforcing rent caps across all rental types. These moves will inevitably confront legal challenges and political blowback, but such bold public policy will create a space in the housing system for communities and mission-driven actors to move into. “Housing policy is made in a wide variety of departments,” notes Arcarazo, pointing out that decisions on tourism, finance and taxation all impact housing. The public sector must therefore adopt a cross-departmental vision of housing as social infrastructure – coordinating economic, environmental and social policies toward the common goal of adequate housing for all.

For social actors, the Catalan model shows the power of ground-up collective action. Catalonia’s housing revolution simply would not have happened without the years of grassroots campaigning from tenants’ unions, the Plataforma de Afectados por la Hipoteca movement, cooperative activists and neighbourhood assemblies. This forced authorities to act (the historic march of 170,000 people for housing rights in Barcelona in 2024 is credited with spurring new rent control measures) and seeded the institutions that are now delivering solutions. Indeed, the cooperatives and housing associations that grew out of that movement measure success not in profits, but in how many people they can house and emissions they can cut. “They have shown a remarkable ability to partner across sectors and cut through old silos,” says Laura Castro Renard, communications and press manager of the Third Social Sector Organisations Board of Catalonia.

A housing association might manage flats owned by the city, or a cooperative might borrow from an ethical bank, or partner with a private construction firm. This messy cooperation is a feature, not a bug, of the system; allowing each actor to contribute their strengths – be it funding, technical know-how or community trust. “The lesson for civil society everywhere is clear: to organise and build coalitions ready to capitalise on any window of opportunity that allows progress on rights and social transformation.”,” says Pilar Bosch, director of housing association Fundació Sa Llar. These social actors also serve as the system’s conscience, continually driving the endeavour to stay true to the mission of decommodification. They remind everyone that the aim is not just to create homes, but to redefine housing as a human right and a public good.

And for the private sector, the Catalan model offers a vision of a different way of doing business – one that embraces the notion of “doing well by doing good”, as Jaume Roures of impact investor Coyoacán puts it. This new cadre of developers and investors are finding that accepting reduced margins may make more business sense over the long term. For example, Grupo Salas, one of the region’s largest developers, has adopted a policy of foregoing big ticket projects in favour of volume and long-term stability: it accepts a more modest 4-6% return on investment and plows back the lion’s share of its earnings into additional affordable projects. “We offer 6% – but it’s a social impact project,” says Manel Rodríguez, partner and CEO of the Salas Group and honorary patron of the SALAS Foundation, contrasting his model with the 12% returns private funds seek in typical projects. That 6% may seem low to the gilet-clad financiers of Wall Street or Zurich, but it has proven enough to attract impact investors. And because demand for affordable rentals is so high (Salas reports 100% occupancy and waiting lists “double or triple” the available units), the business risk is palatable. In fact, Salas is growing rapidly by not exploiting its customers. Its success, alongside other social housing PPPs (public-private partnerships), is sending a message: businesses can prosper through “productive, rather than speculative, business models,” says Rodríguez. It is a business model in which profit is modest but consistent, developments are built to last, and value comes from scale and social license as opposed to quick flips.

Other private-sector actors are also finding unexpected benefits in these partnerships. For instance, when heating systems company Ariston partnered with Hàbitat3 to design a custom energy solution for the Casa Bloc retrofit, it ended up energising its workforce. Solving a social challenge – heating a historic, uninsulated building without altering its façade – pushed the company to create a new hybrid water heater technology that is now among the most efficient on the market. The company donated equipment and helped monitor indoor air comfort after the renovation, acquiring invaluable data about performance. The project also gave Ariston a compelling sustainability story to share with its network, aligning with its brand purpose. “In a word, it motivated people – the engineers, the installers and the executives,” says Anna Sayeras, Ariston’s product manager. As she observes, when a private company and a non-profit find a “shared purpose”, they can achieve a common goal neither could alone. “And, most importantly, it also got our foot in the door with an alternative housing system we think will offer many new business opportunities going forward,” concludes Sayeras.

Catalonia is teeming with such burgeoning partnerships. And the emerging consensus is that profit is acceptable – but only up to a point. This is often cited at around 5%; enough to entice private capital, but not of the predatory variety. The lesson here is one of restraint and long-term thinking: by reinvesting in communities and settling for sustainable returns, private firms can become productive partners rather than the vampiric cowboys to which the housing sector is so often accustomed.

Ultimately, the Catalan example is teaching the world that fixing the housing crisis – both socially and environmentally – is not just about euros or units, but about creating a cross-sectoral vision that transcends traditional silos. And at the core of the Catalan model is a set of fundamental ingredients: a vision of housing as a human right, a critical mass of people willing to fight for that vision, new processes and innovations to build and manage homes responsibly and sustainability, and all the participants – tenants, developers, officials, builders – cooperating rather than competing to make it happen. As these ingredients simmer together, a new housing culture is brewing in Catalonia. It is a culture that views decent, climate-friendly housing as fundamental infrastructure for a just society.

Although still too early to declare victory, Catalonia’s needs-based housing revolution provides the most persuasive evidence yet of a rough roadmap toward achieving a just climate transition in the global housing sector.

“The [sustainability] renovations we do allow people and families without resources to come and live with dignity again,” concludes Nacho of Mansol Projectes. “The skills [I’ve learned to do that] are priceless to me.”