The European Commission and lawmakers have advanced measures to streamline modular construction regulations amid Europe's deepening housing shortage. On March 10, 2026, the European Parliament's Special Committee on the Housing Crisis called for simplified permitting, mutual recognition of qualifications, and EU-wide apprenticeships in modular construction. The committee cited a shortfall of ten million homes and substantial increases in rents and home prices1‘No more excuses‘: Lawmakers demand ten million more homes - EU Perspectives.
Background
Europe faces a significant deficit in housing supply. Housing Europe's 2025 report shows annual demand-including social housing-far exceeds current deliveries, with France and Germany meeting only half their targets2EESC Info December 2025 | EESC. The European Commission's Affordable Housing Plan, introduced in December 2025, estimates a need for more than two million new homes per year-about 650,000 units above present construction levels3Affordable housing - European Commission. The European Commission's Joint Research Centre projects a requirement for over two million homes annually by 2035, including 7.14 million additional units beyond the 17 million already planned4Housing in the EU: more than 2 million new homes per year needed by 2035 to meet demand - Joint Research Centre.
Regulatory fragmentation across the EU has slowed adoption of modular and off-site construction. Industry stakeholders have called for harmonized EU standards and conformity pathways under the Construction Products Regulation (CPR). Proposals include mutual recognition of assessments for "building kits" and streamlined public procurement for modular systems5White Paper on. The revised CPR implementation plan for 2026-2029 aims to create harmonized standards and introduce digital tools, such as the Digital Product Passport, to ease compliance for innovative construction products6Commission presents new initiatives to support Europe’s construction ecosystem - Internal Market, Industry, Entrepreneurship and SMEs.
Details
The committee's report indicates rents have climbed over 30% and sale prices by 60% since 2010, while residential permits have fallen by more than 20% in five years1‘No more excuses‘: Lawmakers demand ten million more homes - EU Perspectives. Recommendations include a "housing simplification package"-with 60-day permit processing, investment in workforce skills, legal certainty, and modular construction apprenticeship programs1‘No more excuses‘: Lawmakers demand ten million more homes - EU Perspectives. Modular construction methods are highlighted for their labor efficiency and carbon reduction potential, alongside proposals for a minimum EU-made content requirement in publicly financed projects and stronger raw materials rules1‘No more excuses‘: Lawmakers demand ten million more homes - EU Perspectives.
Industry experts stress the need for CPR standards that address entire building components, not just individual products, and for mutual recognition of environmental product declarations to reduce duplication and costs7Draft ID: 674cb2c6-e475-4120-869d-00aa9c7c96a4. An industry white paper identifies siloed governance and fragmented testing and certification procedures as major obstacles, and calls for one-stop permitting offices and integration of industrial construction principles into EU taxonomy criteria5White Paper on.
Outlook
European institutions are expected to progress with regulatory reforms throughout 2026. The CPR Working Plan will direct standardization of modular construction, while the Affordable Housing Plan aims to accelerate project approvals through streamlined permitting and digital compliance systems. Improved alignment of EU and national policy frameworks may facilitate greater adoption of modular solutions, potentially easing housing shortages and promoting energy-efficient, off-site methods.
