(Deutsche Welle Chinese website) Maricarmen, an 87-year-old Spanish retired woman, was forcibly evicted from her old home of 70 years on Wednesday, triggering national attention and protests and once again highlighting Europe's worsening housing crisis.
In the German capital city of Berlin, the pressure on the housing market is also great, and local residents even want to try a historic experiment: About five years ago, Berlin voters passed a referendum and asked the Berlin Senate to enact laws to end the dominance of large real estate groups. Under this initiative, for-profit companies with more than 3,000 housing units should be forced to sell these assets to the Berlin state government at a preferential price. However, the plan has yet to materialize, and the average price of new leases in Berlin has risen by around half in the meantime.
In the Berlin state parliamentary election held on September 20, the Left Party (Die Linke) became the biggest winner. During the campaign, the party promised to resolutely implement the referendum result and take the housing of large enterprises into public ownership (often referred to as "confiscation" in the campaign). Whether Berlin will enter this new legal area still depends on the negotiations to form a government. However, the election results have once again raised concerns across Europe about the severe housing crisis in metropolitan areas. Deutsche Welle introduces you to a selection of models currently in use in other metropolitan areas.
The Vienna model is seen as one of Europe’s model solutions for curbing skyrocketing rents. The Austrian capital experienced an extreme housing crisis after the end of World War I - there was a severe shortage of beds, workers had to sleep in shifts, and the cramped spaces even led to the spread of tuberculosis. The response measures taken at that time are still stabilizing the housing market: according to official figures, the city of Vienna itself leases 220,000 public housing units and maintains an additional 200,000 subsidized housing units, where about 60% of Vienna residents live. This has also had a stabilizing effect on prices in the free rental market.
The cost of living in many cities continues to rise, largely because the attractiveness of location directly pushes up land prices. Therefore, many places are exploring how to separate rent from land price. One approach: Municipal land is not sold but leased to cooperatives or public benefit investors. This eliminates the need for municipalities to bear the cost of construction, and developers do not have to factor in high land prices into their costs and ultimately pass them on to tenants. Basel, Switzerland, is one of the pioneers of this model in Europe: about 40% of cooperative housing in this Swiss city is built on public land. Cities such as Barcelona and Lisbon have also been heavily promoting this model over the years.
Intervention becomes more difficult if the land and buildings have been in private ownership for a long time. In Paris, municipalities have had pre-emption rights since 2014, hoping to increase the proportion of social housing in neighborhoods facing severe crowding-out effects. The goal is to reach 30% by 2035, but the current growth still mainly comes from new municipal projects. At the same time, the French capital Paris and its surrounding metropolitan areas are also increasing their efforts to acquire commercial office buildings and convert them into residential buildings. In the surrounding Île-de-France region, authorities have identified 61 related projects that could create a total of up to 8,200 new homes.
The Czech capital Prague has opened up another path to ensure that those essential to the functioning of the city can stay in the city, including nursing staff, police, teachers or sanitation workers. These people typically have less income to pay rent than a banker or lawyer. Some 660 housing units specifically reserved for public sector employees have been built in Prague. The agency undertaking the project is a subsidiary of a Czech bank. With European funding and a 40-year calculation, it strives to control rents at around 20% of regular market prices. Who can live in such energy-efficient apartments is not decided by banks, but allocated by hospitals and government agencies through framework agreements, which can also be used by public institutions to attract new employees with preferential lease terms. The next batch of such homes is already being planned.
Dublin, the capital of Ireland, also has difficulty retaining low- and middle-income people. After the financial crisis in the late 2000s, foreign investors purchased a large number of properties. Subsequently, as low tax rates attracted many large technology companies to locate their European headquarters in Dublin, demand for housing surged, and rents also soared. Due to a severe shortage of social housing supply, waiting lists in Dublin are extremely long. Dublin’s Cost Rental Housing, launched in 2021, focuses on an often-overlooked group: applicants with an annual income of less than €66,000 can apply. This group’s income is too high to qualify for social housing, but it is difficult to afford free-market rents. Under this program, nonprofit agencies and public entities provide not-for-profit rental housing. According to the latest research from social research institution ESRI, its starting rent is significantly lower than the market level, with an average price of nearly 30% lower. The Irish government hopes to provide 18,000 such homes by 2030. The urgency of the scheme was demonstrated by last year's demand: 104 homes in Coolevally, south-east Dublin, attracted more than 4,200 applications.
It's clear that a significant amount of new housing will be needed to rebalance housing supply and demand in Europe's most sought-after metropolises.
