I am unaware of the US situation, but there are vast differences in housing quality across Europe. Compare the Netherlands, even bad parts of the countryside, to the Greek or Romanian countryside. WTF! And where you'd need air conditioning (Southern Italy, Sicily, Southern Greece) you won't find air conditioning, outside of some very rich enclaves (like parts of Malta, a small part of Sicily, some Greek and Adriatic Islands). And there's 1 reason for that: they can't afford it.
And if we're being entirely honest ... most large European cities I've seen certainly could benefit from having half thrown down and rebuilt. As well as essentially all of the smaller ones.
And as for one of Paul Krugman's comment "Americans, however, have more stuff, that is, material goods: Our houses and cars, in particular, are much bigger. Europeans, on the other hand, have more time ..."
That's not because Europeans don't want big houses, don't want infinite stuff. In very large parts of Europe they can't afford it. And they certainly want more and longer jobs. They just can't find jobs that pay enough to justify giving up free time. But would they work, say, 44 hours per week for a 15-20% raise? (because it's 15-20% more compared to a 38 hour week) I know people that wouldn't, but I also know people that would love such an opportunity.