Why is there a market failure in the housing markets?

Empiric data show that there is a market failure on the housing market. This occurs when the free market leads to an inefficient allocation of resources. The main indicators for the market failure are the housing shortage in growing cities and the increase of homeless people while many houses are empty. The conclusion is that the unbridled, profit-oriented market can not meet the demand on affordable and decent housing for broad groups of society. Therefore, politics is needed. Member States intervene – in highly differing ways and to highly differing degrees – in the housing markets to ensure that every citizen is able to access decent and affordable housing. For instance through object subsidies (funding housing developments) or through individual subsidies that are transferred to target group tenants to help them pay their rent or their mortgage or loan.