Europe’s rents are on the rise: Who’s hardest hit? - European Data Journalism Network - EDJNet

Rising rents across major European cities are creating a housing crisis, disproportionately affecting low-income earners and those in unstable employment. This report, published by the European Data Journalism Network (EDJNet) and authored by Kata Moravecz, sheds light on the factors contributing to this crisis and the urgent need for policy changes to ensure affordable housing for all.

Almost all major European cities are experiencing rent increases, significantly impacting low-income workers and those without stable employment. Many individuals are spending a disproportionate amount of their income on housing, with experts suggesting that traditionally, no more than 30% of a person’s income should be allocated for rent. However, this guideline is becoming increasingly outdated, particularly for those trying to live in urban centers. Low-wage earners, such as part-time workers and freelancers, face the most challenges, often unable to afford rent while middle-income earners are also being priced out in many cities.

The investigation collected data on rent-to-wage ratios and the reasons for rising housing costs in 26 major European cities. Findings indicate that cities with higher nominal wages fare better, but the effects of tourism, low housing supply, and gentrification exacerbate the situation in cities with already low wages. Notably, only four cities—Vienna, Turin, Helsinki, and Brussels—allow middle-income earners to keep their rental costs below 30% of their income. In contrast, cities like Budapest and Lisbon exhibit rental costs exceeding 300% of low-wage earnings, making it nearly impossible for individuals to afford housing.

Vienna stands out as a successful example, mitigating the effects of rising rents through extensive social housing and strict rent control policies. Conversely, Budapest struggles with a lack of similar policies, as the government's focus on promoting home ownership has led to a dire rental market, leaving many residents in precarious situations.

The rising rent crisis poses a significant threat to individual renters, particularly young people and low-income workers. The inability to find affordable housing close to employment centers could result in long commutes or deter individuals from accepting jobs in urban areas. The report emphasizes the importance of these demographics for city functionality, noting that without adequate housing, essential workers like cleaners and gig economy workers may disappear from the workforce.

Several recurring themes emerge as causes of rising rents. Excessive tourism and the prevalence of short-term rental platforms, such as Airbnb, have led to many residential properties being used for temporary accommodations, driving prices up. Additionally, both national and international migration contribute to increased demand for housing, particularly in cities attracting a large number of new residents seeking better job opportunities. In cities like Budapest, this influx has led to a doubling of rents due to increased competition for available units.

The report highlights the necessity for policy interventions to protect tenants and promote social housing initiatives. Without such measures, the current trends suggest that the housing crisis will continue to worsen, making affordable living increasingly unattainable for low- and middle-income individuals across Europe. The urgency of addressing these issues cannot be overstated as cities work towards sustainable housing solutions for all residents.