The public housing debate in European countries is mostly fo cused on affordability issues and the panacea of new housing construction, but overlooks questions of living space, even though both overcrowding and under-occupation in the existing housing stock are on the rise. As shown for the German case, overcrowding is especially common among immigrants, young adults, single parents, and urban renters, while under-occupation is even more widespread, especially among older populations. This is similar in other European countries. Perceived overcrowd ing rates are even higher. Socio-demographic factors are stronger predictors of overcrowding than income or housing costs, which feature prominently in affordability debates. A key implication for policymakers is to prioritize reallocating space within the existing housing stock—through housing exchanges or downsizing incentives—as an alternative to carbon-intensive new construction, which is not always in tune with demographic trends.