Looking for an apartment in Munich, Hamburg or Berlin is now like playing the lottery. Other metropolises in Europe also suffer from a massive lack of affordable housing. Where a construction offensive fails, some cities resort to creative and sometimes extreme measures.
Building is the German solution to the housing shortage. At the housing summit, top politicians and associations will discuss how this can be accelerated. The federal government’s goal of building 400,000 apartments per year is very far away. According to the Federal Statistical Office, only 295,300 apartments were completed last year. It is estimated that there is currently a shortage of 700,000 apartments.
Germany is far from the only country suffering from this problem. There is a shortage of affordable housing in most European metropolitan areas. Building alone no longer seems to help, as individual cities are now relying on creative ideas.
Barcelona expropriated after two years
Perhaps the most drastic example in Europe can be found in Barcelona. The Spanish capital is struggling with a high level of vacancies as apartments are often used as investment and speculative properties. In 2019, the Catalonia region, whose capital is Barcelona, took measures against this vacancy by decree. If an apartment is empty for two years, the owners are forced to rent out the space. If no tenant is found within a month, the city can expropriate the property from the owner for half the market price.
But despite this drastic relief strategy for tenants, Barcelona continues to struggle with high prices. As an EY study shows, rents there rose more last year than in any other city in the country – by 36 percent compared to 2021.
As “Bloomberg” reports, the city wants to go even further and expropriate vacant property after just six months. However, this would still have to be enforced by the Catalan government. Experts doubt that this is the right decision. Barcelona Mayor Ada Colau “has achieved the opposite of what she wanted,” said Juan Velayos, an investment advisor in Barcelona, to the “Handelsblatt”. “Instead of creating more supply, it has reduced because owners now prefer to sell rather than rent.”
Portugal is abolishing the golden visa
The housing situation in Portugal is similar. According to the Portuguese Statistics Office, more than 720,000 homes in the country are empty. At the same time, there is a lack of affordable housing. The numerous holiday homes in the popular holiday destination are distorting the market, so that many people can no longer afford the rents in the metropolitan areas.
The “More Living Space” crisis program is intended to combat this. New licenses for holiday apartments in Lisbon, Porto and the Algarve coast will be banned. Tax gifts are intended to motivate current holiday rental companies to convert their holiday apartments back into normal living space. The country will also abolish the so-called golden visa. This allows foreigners who invest more than 500,000 euros in real estate in Portugal to travel to the Schengen area without a visa.
Amsterdam returns to cooperatives
In Amsterdam, the situation got so bad last year that Dutch universities asked their foreign students not to arrive until they had found a room.
In an emergency, students cannot even rely on a week in a hotel or holiday apartment. This is because hotels in Amsterdam have the highest room occupancy rate in Europe after London. Like many other popular travel destinations, the small Dutch city struggles with an expensive and tight housing market.
Like Germany, the Netherlands also wants to start a construction offensive – 100,000 apartments are to be built per year – but also take action against holiday apartments and vacancies. There are 19,000 empty apartments in the Dutch capital. Fines are intended to help against this – a landlord has to pay up to 9,000 euros if an apartment is empty for more than six months.
Strict regulations for vacation rental owners help combat high Airbnb density. However, the housing crisis is not only due to the approximately 20 million tourists who travel to Amsterdam every year. The liberalized housing policy of the last 20 years has reduced the high proportion of social housing from 55 percent to 40 percent. Now the city wants to focus more on cooperative apartments in order to increase this proportion again.
Vienna has been building city-owned apartments for 100 years
The example of Vienna shows how much a high contingent of social housing can calm the market. The city has around 220,000 apartments that have been built since 1920. Since then, not a single one has been sold again. Around 500,000 people live in the so-called municipal buildings – almost a quarter of the 1.9 million inhabitants of the Austrian capital.
The whole thing is also seen as a social project, because only those who earn less than 53,340 euros a year can get an apartment in the municipal buildings. Most residents earn much less. However, the system has a much larger impact than just providing housing for low-income people. Because the city has such a large share of the housing market, it can effectively regulate the market.