Rent increases, Europe batten down the hatches: the comparison between Rome and Berlin

Traduzione di Elena Ciullo

Renting a house in Europe has become a luxury for few in recent years. According to Eurostat, between 2015 and 2023, EU house prices increased by 48% while rents increased by 18%. These figures highlight a housing crisis, which is increasingly burdening the budget of households. Families living in the urban centres, in economic difficulties, are responsible for pointing out the situation. More than 10% of them spend more than 40% on the rent alone.

To address this emergency, the European Union has implemented a Coordinated Housing Plan under the supervision of Commissioner Dan Jørgensen. The aim is to expand the supply of affordable houses by investing in the construction of social housing subsidized by the European Investment Bank, providing incentives for energy upgrading, affordable loans for young people and families and the regulation of short-term tourist rentals, as they are considered to be one of the main causes of the problem.

This plan calls for a public consultation to listen to citizens' demands with the aim of creating common rules, in order to provide a coordinated response.  Although the intentions of Brussels are positive, it is undeniable that each city and country has different characteristics, but all have the same need.

In Rome the problem of rent increases is now chronic: today a three-room apartment in the center costs on average around 2,000 euros per month, about 65% of the income of an average worker. In the eternal city, however, there is a further problem: the explosion of short-term rents, especially this year during the Jubilee, which has led to a tourist boom. The offer of houses on platforms like Airbnb has grown by 37%. For the owners, focusing on tourism means more money, because a week rented to foreign visitors can make as much as a month with a long-term contract.

Berlin is experiencing another side of the same crisis. Here 84% of the families do not own the house in which they live, but rent it. Unlike Rome, however, the German capital has for some time had a restraint mechanism: the "Mietpreisbremse", that is a "price cap", that limits rents for new contracts to no more than 10% above the average area price. The government has decided to extend it until 2029.

Yet, even here, short-term rentals are leaving their mark. Although regulated with licenses and stricter limits than in Italy, they still subtract a substantial part of apartments from the ordinary market, especially in the central districts of Mitte, Kreuzberg or Prenzlauer Berg, where international tourism is constantly growing.

The EU’s plan aims to introduce common rules for the sector: mandatory registers, limits of days, data sharing with municipalities for more effective controls. But the challenge will be to find a balance between the right to private property and the right to affordable housing.

Across Europe, from Rome to Berlin, rents continue to rise and access to affordable housing remains difficult. The EU has launched initiatives to increase supply and regulate the market, but effectiveness will depend on the ability to implement tangible and coordinated measures in individual Member States.

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