In the European Union's most populous city, pressure on the housing market is so great that many of its residents are willing to undertake a historic experiment: Five years ago, Berliners voted in a referendum to instruct the Senate of the German capital to draft a law that would put an end to the power of large real estate companies. Those that owned more than 3,000 units should be expropriated, they said. The Senate did not act on the results of the referendum, which was non-binding.
Meanwhile, the average cost of new leases has since risen by about half. But in the Berlin elections on September 20, the socialist Left Party, which in its campaign had promised to act on the referendum, won the largest share of the vote. Whether it will be able to make good on its promises now depends on how negotiations to form a coalition shape up.
But whatever happens, the election has drawn attention once again to the severity of the housing crisis in many cities across Europe. Here are some initiatives that have already been put in place: The Vienna model is a flagship solution to soaring rent prices in Europe. The ambitious social housing program as introduced after World War I when the Austrian capital experienced a severe housing crisis.
Beds were so scarce that some workers had to sleep in shifts. Diseases such as tuberculosis spread in the cramped living conditions. The model serves to stabilize the city's housing market to this day: According to the Vienna authorities, the city owns approximately 220,000 municipal apartments that it rents out as well as 200,000 subsidized dwellings.
More than 60% of Vienna's residents live in one of these two types of housing. This also helps to stabilize prices on the private market. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The fact that housing is becoming increasingly expensive in many cities is largely due to the fact that a city's attractiveness is reflected in land prices.
In many places, people are considering how to decouple rents from the price of land. One means of doing this is not to sell municipal land but to lease it to cooperatives or socially-conscious investors. This benefits councils that do not have to bear construction costs and developers too, as they do not have to factor in exorbitant land costs that are ultimately passed on to tenants.
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