How can rents become affordable again?
Housing shortages, low interest rates and real estate speculation have caused rents in Europe's big cities to skyrocket in recent years. In many places people are taking to the streets to protest. In Portugal and Berlin new laws have been proposed to stop the trend. Commentators say the problem is primarily on the supply side.
Penalties for those who don't build
Rents in the Irish capital Dublin are higher than ever. It will take radical measures aimed at creating more living space to change that, writes economist and blogger David McWilliams:
“Land is a resource that can either be used or hoarded. We need to use it intensively; this means penalising hoarding and accelerating and increasing SDZs (special development zones) that make the process of building quicker and easier for builders. … Both are supply-side measures and both are extremely urgent because supply is the problem. If we build more apartments for rent, rents for used and old apartments will fall, re-establishing the appropriate gap between cheaper and more expensive tranches of the rental market.”
Renting out not attractive enough
Dinheiro Vivo examines the housing crisis from the perspective of landlords, many of whom are struggling with rents that are far too cheap as a legacy of the past:
“The housing problem in Portugal will continue to exist if we simply go on blaming tourism and holiday rentals, real estate speculation and greedy landlords. We are ignoring the real reason why middle-class families can no longer afford to rent accommodation in the city centre: there is a lack of supply because the worn-down and conditioned market is unattractive. There are no price differences because only a few houses are available, and this brutally restricts competition. And this will continue as long as it remains more advantageous for a house owner to leave a house empty than to rent it out.”
Rent cap the right instrument for Berlin
Zeit Online approves of the Berlin state government's freezing rents for around 1.5 million apartments in Berlin for five years:
“For a long time now the people of Berlin have been earning far too little to keep up with the rent increases in their city. If you draw one line representing the trend for rents and another for incomes, they increasingly diverge: with salaries at the bottom and housing costs at the top. ... This can't work in the long run without jeopardising social peace in the German capital. ... Those who want to stop this trend must take resolute action. For Berlin capping rents is the right instrument at the right time. Other German states should watch the legal confrontation over this issue closely. If the law goes through it could serve as a model for others.”
Portuguese rent scheme is just a fairy tale
A state programme came into force in Portugal on 1 July that aims to ensure affordable rents. Landlords who take part in the scheme will receive tax benefits if in return they offer their accommodation at rates 20 percent below market prices. This is just a scam, Observador comments:
“The so-called 'affordable' rents are scandalous. The majority of citizens don't have the means to pay rents of 600 to 700 euros, never mind the more than 1,000 euros that were stipulated for the cities of Lisbon and Porto. ... Participants in the scheme will soon realise that they have become extras in yet another fairy tale aimed at deceiving everyone. The houses and apartments people are looking for don't exist, and the tax advantages won't compensate for the resulting difficulties.”