The real people behind the housing charts
Cities are losing those they cannot lose
A couple in their forties, both social workers living in the Richardkiez area of Berlin, is considering moving out of the city. Why? After their baby was born, they realised that they would soon need an extra room. However, they found that renting a bigger flat in the area was beyond their budget.
A fellow social worker, in her early thirties, is likewise seeking an alternative kind of living arrangement.She shares a small room in a flat with other people and would like to live on her own. Despite having a full-time job, she cannot afford to do so. Similar situation, different city: In this case, she lives in Prague’s Smíchov district.
These are much more than anecdotal stories. We calculated how rents are affordable for key workers across European cities and neighbourhoods. Looking at maps of Berlin and Prague, it can be seen that both of these social workers would have to pay more than 40 per cent of their net salary to rent a 50 m² flat in their districts.
This data paints a very different picture to that which is often presented throughout various housing charts. Why? As social workers, their real earnings differ greatly from the average wage.
Warnings coming from all over Europe
In 2023, the Australian Urban Observatory started publishing unique research into the housing situation of essential workers across Australian cities. The data revealed that people in essential occupations, such as nurses and teachers, were being pushed out to cheaper housing areas. In consequence,commutes became so long that certain areas were at risk of losing key workers altogether.
Although no such data exists at a European level, our calculations, the first of their kind, paint a similarly dire picture — and experts warn the implications are serious.
Commuting itself is already problematic. As reporters from Tagesspiegel found out, employers such as the Berlin fire brigade and Sana Kliniken AG report that their employees are frustrated by their commutes. To live in an apartment close to a workplace is especially important for shift workers. As working in ambulances and cleaning the streets in the early morning hours cannot be done from home.
What can happen if rents continue to increase, while wages not enough? Zdeňka Havlová from Prague’s Institute of Urban Planning warns that “in cases where employees in strategic positions have salaries below the Prague average, it may become increasingly difficult for them to afford housing in Prague, meaning they may have to move out.”
As our Prague data reveals, most essential workers do indeed have lower wages than average. This even extends to seemingly well-compensated professions such as university lecturers and judges — though doctors and paramedics are notable exceptions. It should be added that a gender pay gap exacerbates the situation for women: A female paramedic has to work an extra day per month compared to her male colleague just to make rent.
Similar warnings are coming from the European capital, Brussels. The Brussels State Secretary warns that forcing key workers to move out of the city could lead to staff shortages and worsen commuting, traffic and fiscal pressures.
There is a risk not only of losing people who already live in our cities, but also of losing potential new residents.
Young people at the beginning of their careers are particularly struggling to find housing, as confirmed by data from Warsaw, Brussels, as well as Italian cities such as Milan and Bologna. The salaries of early-career workers in Brussels make it impossible to afford to rent in any of Brussels’ 19 municipalities. As reporters of Gazeta Wyborcza found out, many young people are considering avoiding the Polish capital altogether in favour of finding a job in a smaller town where housing is cheaper.
Essential workers are vital to the functioning of cities — as the pandemic made painfully clear. In many cities, sectors such as healthcare and education are already facing critical shortages, as many have reported already. And this situation could worsen. As cities grow, so will the demand for places in kindergartens and schools. In addition, many cities are also ageing, which puts more pressure on jobs in the healthcare and care sectors.
We know which sectors are already facing staff shortages, and we can estimate how capacities will need to grow in line with projections for population development. What municipalities do not know, however, is how many people are moving away due to unaffordable housing — and how many are being deterred from moving in.
How many flats are needed? Nobody knows
Some people are lucky. For example, Kristýna, a paramedic from Prague, managed to get a flat with a lower rent from the hospital where she works. In theory, essential workers such as Kristýna may also be eligible for a social housing. However, there is a shortage of municipal apartments and, due to privatisation, their number has been declining for a long time. Twenty years ago, Prague had 100,000 such apartments; now, it has fewer than 30,000. Only around 3,500 of these serve key workers, whereas 105,000 live in Prague.
Similarly, social housing in Warsaw could provide welcome support for those working in key professions. Unfortunately, there are far too few of them. The capital has around 80,000 social housing units, but over 70,000 of these are occupied. The waiting list for these apartments ranges from two to 15 years.
Unlike in post-communist cities, where housing funds have often shrunk due to privatisation, Vienna’s non-profit housing model has been widely celebrated. However, even this model is starting to show cracks. Over half of the city’s 750,000 rental apartments are publicly subsidised or managed by non-profit cooperatives, keeping rents relatively low for long-term residents. However, newcomers and younger workers often find themselves excluded from these benefits. Consequently, they are left at the mercy of the private rental market.
While this may be surprising, a primary school teacher in Vienna has to spend 35 per cent of their salary on a 50 m² flat; in Prague, it is 33 per cent; and in Berlin, 29 per cent. Only London is a completely different story, with teachers spending half their salary on rent.
Cities are beginning to recognise the problem and are trying to find solutions. In Berlin, for example, the state-owned company Berlinovo is building new apartments for essential workers. The company says there are more than 5,600 apartments and the figure is expected to reach 6,800 by 2029.
“The plan is to build thousands of apartments. We are also renovating some buildings. Prague is currently investing in a number of projects in city districts where a certain percentage of the residential units will be available for use,” said a Prague City Hall spokesperson in response to a question of Denik Referendum about how the city is planning to address the issue.
Nevertheless, will these amounts of apartments even be enough? Nobody knows.
Housing gaining its political momentum
The housing crisis is becoming a major topic in local political campaigns across Europe and beyond. Zohran Mamdani’s recent campaign in New York put this issue at the heart of his rally. He made the provision of affordable housing and rent regulation two of his three main campaign promises, which helped him win the election. On the other side of the political spectrum, the topic is increasingly being used by far-right parties: The Freedom Party in the Netherlands and Chega in Portugal have made housing affordability a major part of their campaign.
The housing issue is gaining political momentum at EU level too. At the end of last year, the European Commission introduced the European Affordable Housing Plan, its first-ever strategy pledging to address the housing issue at EU level.
However, the impact of housing unaffordability on the provision of essential public services is only mentioned in the accompanying staff working document. In the document, which is almost two hundred pages long, one may find a subchapter, only a few paragraphs long, on ‘Essential workers and supply of essential services’. The Commission’s staff refer to an earlier statement by the European Economic and Social Committee which acknowledged that ‘a growing number of workers cannot afford to live near their jobs, leading to labour shortages in key sectors such as healthcare, education, and public services’.
Despite the acknowledgment of the issue, these documents lack any data that would reveal the scale of this problem.
For a long time, the housing crisis has been perceived as an inability to buy a flat. This has led to it being ‘solved’ by help-to-buy policies in many countries, such as the UK. However, these policies have not increased housing affordability, merely boosted investment in housing.
In recent years, public debate has acknowledged that the rising cost of living, particularly rent, is threatening the middle classes, especially young people. Increasing energy bills of European households in the wake of the energy crisis have further brought this issue into sharp focus.
However, what we did not know until now, is who the people behind the statistics of housing unaffordability are.
To give and example, the ‘average’ citizen of Berlin — someone with the median city salary — can afford to rent in 70 per cent of Berlin neighbourhoods. This figure is not at all reached by people in professions such as police officers, care workers for the elderly, firefighters, kindergarten teachers, social workers and sweepers. They can afford to rent in a much less number of areas.
While there are still a few more affordable districts in Berlin, market rents in Prague and Vienna are completely out of reach for essential professions such as care workers. For these professions, rents are much less affordable than average statistics would suggest.
Examining the data at a granular level for each neighbourhood and profession helps us to reveal the inequalities driving our cities. There are stark differences between districts, with higher-income residents accumulating in certain areas and the rest being pushed to the outskirts or outside the city entirely. There is a widening income gap between countries when some residents, such as university lecturers or judges, don’t earn enough to make rent. The gender pay gap also widens notably in higher-earning, top-level positions.
But most critically, income growth has failed to keep pace with rising rents and energy costs.