In many major urban centers of Europe, the housing shortage has become a significant social issue. Deutsche Welle examines various models that have been implemented across the continent.
In the European Union's most populous city, pressure on the housing market is substantial, leading many residents to support a historic experiment. Five years ago, Berliners voted in a referendum instructing the Senate of the German capital to draft a law to end the power of large real estate companies, specifically targeting those owning more than 3,000 units for expropriation. The Senate did not act on the results of the non-binding referendum, and the average cost of new leases has since increased by about 50%.
In the Berlin elections on September 20, the socialist Left Party, which promised to act on the referendum, won the largest share of the vote. The party's ability to fulfill its promises will depend on coalition negotiations. The election has once again highlighted the severity of the housing crisis in many European cities.
Several initiatives have already been implemented to address the issue:
The Vienna model is a prominent solution to rising rent prices in Europe. This ambitious social housing program was introduced after World War I when the Austrian capital faced a severe housing crisis. At that time, beds were so scarce that some workers had to sleep in shifts, leading to the spread of diseases such as tuberculosis in cramped living conditions.
The model continues to stabilize the city's housing market today. According to Vienna authorities, the city owns approximately 220,000 municipal apartments and 200,000 subsidized dwellings, with more than 60% of residents living in these types of housing. This helps stabilize prices in the private market.
The increasing cost of housing in many cities is largely due to the attractiveness of urban areas reflected in land prices. Many cities are exploring ways to decouple rents from land prices. One method involves leasing municipal land to cooperatives or socially-conscious investors instead of selling it. This approach benefits councils by alleviating construction costs and developers by reducing land costs that are ultimately passed on to tenants.
The Swiss city of Basel is a pioneer of this model, with about 40% of cooperative housing units located on public land. The Spanish city of Barcelona and the Portuguese capital Lisbon are also implementing similar strategies.
In cases where land and buildings are privately owned, challenges arise. In 2014, Paris launched an anti-displacement plan that grants the municipality a "first right of refusal" in gentrifying neighborhoods to increase the share of affordable housing. The current target is to achieve 30% social housing for low-income residents by 2035.
Earlier this year, the French government and Paris regional authorities identified 61 projects aimed at converting empty office buildings into housing, potentially creating up to 8,200 homes in the inner suburbs of Paris.
Prague has adopted a different approach to retain essential workers such as caregivers, police officers, teachers, and sanitation workers. Approximately 660 new energy-efficient apartments have been built specifically for public-sector employees. A subsidiary of a Czech bank, which has received European loans, managed the development, aiming to keep rents 20% below market rates through economies of scale. Hospitals or public sector agencies determine tenant eligibility, allowing them to attract new employees with affordable rent options. More apartments are currently in the planning stages.
In Dublin, the capital of Ireland, it has become increasingly difficult for low-income individuals to remain in the city. Following the financial crisis of 2008, foreign investors purchased significant amounts of real estate, leading to skyrocketing rents as major tech companies established their EU headquarters in Dublin due to favorable tax rates. The city now faces long waiting lists for public housing, which remains insufficient.
In 2021, the Irish government introduced the Cost Rental Housing program to assist those with middle incomes—individuals earning too much to qualify for public housing but too little to afford the private market. To qualify in Dublin, a household must have a net income below €66,000 ($75,000) per year. Non-profits or public agencies lease the apartments at rents below market levels, averaging almost 30% lower according to a recent study by the Economic & Social Research Institute (ESRI) based in Dublin.
The Irish government aims to deliver 18,000 low-cost rental homes by the end of the decade. Last year, there were over 4,200 applicants for just 104 apartments in a new community located in a suburb of Dublin.