High rents in major German cities put low-income tenants in financial difficulty. 1.1 million households of more than two million people are left with even less than the level of subsistence provided for by the social law. This is the result of a study at Humboldt University in Berlin, which was funded by the Hans Böckler Foundation, which is affiliated with the union. As a result, high housing costs further accentuate the differences between rich and poor. “Living can make you poor,” the study says.
The new analysis provides details on the housing situation in 77 major German cities with more than 100,000 inhabitants. According to this, poorer households, compared to better-off households, have to spend a much larger share of their income on housing, although they have less space and live in less well-equipped apartments. The research team does the math: tenant households in the highest income bracket have on average a monthly net income 4.4 times higher than households in the lowest category before deduction of rent and ancillary charges. (excluding electricity). Once the rent has been paid, this difference increases to 6.7 times.
According to the study, single-parent households suffer particularly from high housing costs: in this group, after deduction of housing costs, around a quarter have only a residual income below the Hartz IV rate. That’s not a lot for the often expensive life in a big city. The researchers evaluated the data from 2018. At that time, the standard amount required was 416 euros for a single person and 296 euros for a child aged 6 to under 14. The social allowance is now 446 and 309 euros respectively.
Low wages also often have to be content with reduced living space. Renters, whose household income is no more than 60 percent of the median income of all households in large cities, have on average only 38 square meters of living space per capita. The average living area of all households in large cities is 45 square meters. In households with more people, rooms such as the kitchen or the bathroom are included proportionately. It seems more generous in tenant households with high incomes: they have an average of 51 square meters per capita. Unsurprisingly, couples with children live closest to each other, while singles have the most space.
Low-income tenants less often live in new buildings
People who immigrated to Germany or their families live in just under a third of households in large cities. According to the conclusions of the Berlin research team, their space is often particularly limited. Migrant families only have 34 square meters per person. We also note that low-income tenants less often live in new buildings built after the turn of the millennium. They are much more likely to find an apartment in apartment buildings built between 1919 and 1978. Berlin researchers also attribute this to the fact that less social housing has been built in recent decades. Building more new homes could help create affordable living space. But the state must also intervene to limit high rents. “For the vast majority of the population, living conditions are not determined by new construction activities, but by the management of the housing stock and the regulation of rental prices in these apartments,” warns the research team. .
For their study, the researchers evaluated available data from the micro-census. These are fully available for 2018. National statistical offices surveyed around one percent of the population, or more than 800,000 people, about their working and living conditions. The study complements a study published by scientists in mid-June. The main result at the time was that almost half of renter households in the 77 major cities must spend more than 30 percent of their net income on rent, including heating. If the exposure exceeds the 30 percent mark, it is considered problematic because there is not enough left for food, clothing, recreation or vacations.
This will now be clarified in the new study. The researchers filtered out more than two million households in large cities who live on the poverty line. Your income is at most 60% of the median income of all households in large cities. It does not mean the mean, but the median. This is the value that is exactly in the middle if you rank all income in order of magnitude. Of these two million households, about nine in ten must spend more than 30% of their net income on rent, about four in ten or even more than half.
Berlin ahead of Munich in price hikes
Rents in major cities have increased dramatically in some cases over the past five years. According to the real estate portal Immowelt, asking rents in 34 cities have increased on average by at least 20% since 2016. By way of comparison: from the first half of 2016 to the first half of 2021, inflation only increased by 8% . The prices of apartment rental advertisements between 40 and 120 square meters were used for the evaluation. According to Immowelt, rents increased the most in Berlin, a median of nine euros to 12.80 euros per square meter (up 42%). In Munich, the corresponding price rose from 15.50 euros to 19.20 euros (plus 24 percent).
Berlin researchers are now asking for an increase in the supply of apartments with a warm rent of up to nine euros per square meter. This corresponds to a cold rent of a maximum of 6.35 euros per square meter. According to their calculations, there is a shortage of apartments in this rental price range for 1.4 million households in large cities. Above all, affordable apartments for singles are important. Stefan Körzell, Board Member of the Federation of German Trade Unions, says: “The next federal government must finally put in place effective safeguards against excessive rents. Building, building, building alone is not enough. It is important that massive investments are made to meet real needs and therefore in affordable housing. In addition to an “effective rent freeze, more social housing and more public sector engagement” are needed.