High inflation and the resulting rise in interest rates are creating additional tightness in the already tense housing market – new construction has slowed considerably as a result. Scientists from Regensburg, Germany, are now coming up with a drastic proposal to get the housing shortage under control – provoking the wrath of landlords.
Many households in Austria were hit hard by the wave of inflation. According to a recent survey by Statistics Austria, almost one in three expects to have problems paying rent, housing loans, additional housing costs or operating costs in the coming months. This means that this share has doubled compared to last year.
Housing should be distributed more fairly
Although the outlook is anything but rosy, economic researchers around Steffen Sebastian – who also advises the German government – of the University of Regensburg are now pushing for a systemic change. They are mainly concerned with a fairer distribution of living space. But instead of wanting to make rents cheaper, the suggestion is to actually increase them.
In concrete terms, they want to relax or completely abolish tenant protection for long-term tenants or the so-called cap limit (the rent may not rise more than 20 percent within three years).
Actually enough living space available
The reason for the initiative: According to the researchers, there is already enough living space for everyone – but it was distributed incorrectly. Many elderly people in particular still live too often in large areas – the price increases are then an incentive to more easily say goodbye to the many square meters in often good locations.
Support for financially weak tenants
“It cannot be the case that the state protects people who have been paying low rent for decades, whether they are in need or not. And others cannot find an affordable apartment at all,” Sebastian explains to the “Welt”. in return, low-income tenants should be financially supported – with resources that, according to the “Handelsblatt”, should be made available by landlords who would benefit from the higher income anyway.
Researcher: Political promises do not hold
However, the proposal has not received much support. While the Left Party, for example, advocates a similar approach with an option for seniors and young families to swap homes, the rest of the political landscape objects.
According to the German tenants’ association, more and faster construction must be done – the promise of politicians to alleviate the need through more new construction has not proved successful, according to the researchers.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
