Rent prices are rising across major European cities, creating a housing crisis that disproportionately affects low-income workers and those without stable employment. While higher wages can mitigate some effects, government intervention remains a rare but crucial solution, writes the European Data Journalism Network. The article was originally published in Hungarian here.
The traditional rule of spending no more than 30% of income on rent is becoming unrealistic. Many low- and middle-income earners are now priced out of cities. The research examined rent-to-wage ratios in 26 European cities and found:
– Cities with higher wages generally fare better despite rising rents.
– Government policies, such as social housing and rent controls, help protect tenants.
– Vienna performs best due to its strong housing policies, while Budapest suffers from weak tenant protections.
Impact on Renters
Young workers, blue-collar employees, and gig workers are particularly affected, as they struggle to afford housing near workplaces. Long commutes from cheaper areas are often impractical due to limited public transport, causing workforce shortages in critical sectors.
What the Data Says
The data collected from 26 European cities paints a bleak picture for renters, particularly those earning lower wages. In all studied cities, a low-wage earner cannot afford to rent a standard apartment at market rates. Budapest and Lisbon stand out as particularly problematic, where a low-wage earner would need more than 300% of their income to rent an apartment. Even middle-income earners are struggling—Lisbon’s rental prices require nearly 88% of the median wage, making it nearly impossible for a single person to rent independently.
Across most cities, affordability is an issue even for those earning closer to the median wage. Only four cities—Vienna, Turin, Helsinki, and Brussels—allow middle-income earners to rent within the 30% threshold. In Belgrade, rental costs consume approximately 58% of the average salary, while in Dublin, this figure rises to 69%, indicating severe affordability issues across the board.
Low Supply and Disappearing Neighborhoods
In many cities, rent increases are driven by a lack of housing supply and the transformation of neighborhoods due to gentrification. Cities like Vienna have successfully mitigated this issue with large-scale social housing programs, but others, such as Budapest, have left renters vulnerable due to a lack of public policies supporting affordable housing.
Limited new construction, combined with an influx of wealthier residents, has reshaped urban areas in many cities. Gentrification leads to rising prices, forcing long-time residents out of their homes. Budapest provides a stark example, where years of neglect in rental policies have created a housing crisis. Without intervention, many urban centers risk losing their cultural and economic diversity as housing becomes increasingly unaffordable.
Conclusion
While high wages can cushion the impact of rising rents, they do not resolve the fundamental housing crisis. Without policy changes, Europe risks excluding key workers from its cities, worsening economic and social inequalities.