Rent and property alike: Housing costs increase the risk of poverty

Rent and property alike
Housing costs increase the risk of poverty

The times when people in Germany spent around a third of their income on rent are long gone. For more and more people, housing costs have become a significant burden that drives them into poverty. That is the result of a request from the left.

According to a media report, every fourth tenant household in Germany is at risk of poverty. The so-called poverty risk rate among tenants is about twice as high as among homeowners, reported the “Rheinische Post”, citing the response of the federal government to a written question from the Left MP Susanne Ferschl. However, the rate of property owners at risk of poverty has also increased significantly in recent years.

People in Europe who have less than 60 percent of the average income of the total population are classified as at risk of poverty. According to the answer from the Federal Ministry of Labor, according to the report, in 2019 this was already 25.3 percent of all tenant households. Two years earlier, the poverty risk rate among tenants was still 24.6 percent.

According to the report, however, it has risen sharply, especially among apartment owners: between 2017 and 2019, it increased by four percentage points to 12.5 percent. The Corona crisis since the beginning of 2020 is likely to have exacerbated the risk of poverty among tenants and apartment owners.

“One in five people in Germany is now at risk of poverty, and it is even one in four tenants,” Ferschl told the newspaper. “While wages are stagnating or have even fallen as a result of the pandemic, rents are rising incessantly. So an ever larger part of the income is spent on rent,” complained the left-wing politician. The spiral of poverty can only be stopped with a nationwide rent cap and widespread collective bargaining.

According to the exploratory paper by the SPD, the Greens and the FDP, 400,000 new apartments are to be built every year in order to ease the situation on the housing market. Of these, 100,000 should be publicly funded. This is to be implemented through an “alliance for affordable housing”. Applicable tenant protection rules should be extended, but there should not be a rent cap. This is exactly what the Greens bump into in metropolitan areas like Berlin.

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