Introduction
On 16 December 2025, the European Commission adopted the new Decision on Services of General Economic Interest (SGEI Decision). The revision updates the State aid rules to facilitate investments in affordable housing. It follows a public consultation, on which we reported in a recent article. In this article, we outline the changes brought about by the SGEI decision in relation to the provision of affordable housing in Ireland.
Background
Current State aid rules are insufficient for EU Member States, including Ireland, to effectively tackle the ongoing acute housing crisis. While the previous SGEI rules allowed Ireland and other Member States to invest flexibly in social housing without the need to notify the Commission, such housing was primarily targeted at disadvantaged households. At present, however, an increasing number of citizens, including middle-income households, face growing difficulties in accessing quality housing at an affordable price.
Conditions for State support for Affordable Housing
It is against this backdrop that the SGEI Decision seeks to facilitate support for affordable housing. Affordable housing SGEIs are services that public authorities view as essential to households that not able, due to market condition and market failures, to access housing at affordable conditions, and for which, without public intervention, the market would not adequately provide. The new SGEI Decision sets out seven conditions which Ireland (and other EU Member States) must comply in order to support affordable housing SGEIs without the need to notify the Commission:
- Target group: Under the SGEI Decision, the Irish authorities will determine the beneficiaries of affordable housing SGEIs, by taking into account primarily household income compared to housing market prices and household composition. They can also give priority access to persons likely to have difficulties accessing the housing markets, including persons fulfilling an essential societal role (such as teachers, the Garda Siochana, firefighters, social care and childcare workers), persons with disabilities, older persons, students or single parents.
- Quality, environmental and accessibility requirements: Affordable housing must be of appropriate quality and accessibility, comply with environmental standards, and be adapted to household needs. In this regard, the Irish authorities must apply the minimum quality, environmental and accessibility requirements that exist here in the State. Thus, the new SGEI Decision does therefore not impose new or additional quality, environmental or accessibility requirements at EU level.
- Price: The Irish authorities must ensure that prices of affordable housing are set in a transparent manner and remain below market prices but, at the same time, are not reduced more than necessary to achieve their affordability objectives. Within these constraints, the Irish authorities will remain free to set precise prices depending on national, regional and local contexts.
- Eligible costs: the list of costs eligible for compensation is broad and includes:
- Investment costs for land and building acquisition
- Renovation, transformation
- Compliance with accessibility requirements for older persons or persons with disabilities
- Compliance with environmental standards
- Adaptation for climate resilience
- Operating costs where necessary
- Duration: In principle, affordable housing units must remain used for that purpose for a minimum of 20 years subject to some exceptions.
- Use: The Irish authorities must ensure that the housing is and remains used for affordable housing, and for instance not for secondary residence or short-term rentals.
- Open systems: The provision of affordable housing SGEIs must be open on equal terms to all providers able to deliver the service, regardless of their legal status and/or public or private nature.
Conclusion
While Ireland has successfully applied to the European Commission for specific State aid approval of an affordable housing scheme, namely the Croí Cónaithe (Cities) Scheme, the SGEI Decision should in future allow Irish authorities to support affordable housing without notifying each affordable housing scheme provided the relevant conditions outlined, above, and all other relevant requirements of the Decision are met.
For more information, please contact our Commercial Real Estate Partner and Head of Housing, Fidelma McManus or the Head of EU, Competition & State Aid, John Gaffney, or your usual contact in Beauchamps LLP.