The poor pay more for housing

Study by the Humboldt University of Berlin : Rising rental costs increase inequality

The gap between rich and poor is widening further due to rising rental and housing costs in Germany. This is the result of a scientific study by the Humboldt University in cooperation with the University College in London. The scientists observed the income and consumer sample of the official statistics between 1993 and 2013 and evaluated data from more than 100,000 people.

Accordingly, low-wage earners have to pay more and more for housing in relation to their income. At the same time, the cost of rent and housing for people with the highest incomes fell during the observation period. In 1993 they had to spend 16 percent of their income on living space, in 2013 it was 14 percent. For the 20 percent with the lowest incomes, the percentage of housing costs rose from 27 to 39 percent.

Real wages for the poor are falling - not for the rich

"The finding surprised us," said Bernd Fitzenberger, co-author and head of the Econometrics Institute at Humboldt University, the Tagesspiegel. The disproportionate rise in housing costs is exacerbating inequality in Germany. “The scissors are on two sides,” said Fitzenberger, referring to the growing wage inequality.

According to the study, real wages for the bottom 20 percent of incomes fell by eight percent during the study period. In the case of middle incomes, real wages showed a constant, slightly positive development between 1993 and 2013. Real wages rose the most for those with the best incomes, averaging seven percent.

Also positive for high earners: if they own or buy real estate, they have to pay less for it than in the 1990s. The researchers justify this with low acquisition, inventory and interest costs - a trend that is likely to decrease in the coming years. "The lower inventory costs were not passed on to the tenants," said Fitzenberger.

In this way, high earners could have amassed wealth in recent years, while wealth accumulation among low earners - especially among the younger ones - has decreased. Because it is difficult to get a mortgage loan without savings, Fitzenberger expects "that the increasing inequality in the accumulation of savings will lead to higher wealth inequality in the future".

Costs for new leases rise sharply

The researchers did not collect separate figures for Berlin, but they did observe that an above-average number of low-wage earners move to the big cities. This increases the pressure on the housing market, especially in the single-person household segment. Especially for new rentals, prices in the cities have recently risen sharply.

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The Real Estate Association of Germany (IVD) also shares this insight, which presented new figures on the development of nationwide apartment rents on Monday. Accordingly, the rents for new rentals rose by around five percent compared to the previous year. Not only big cities like Berlin are affected, but also in small and medium-sized towns with up to 50,000 inhabitants in the surrounding area, new tenants have to dig much deeper into their pockets. Only for apartments from the already most expensive price segment with luxurious furnishings are prices rising less sharply.
The number of homeless people in Berlin has more than doubled since 2015. 37,000 people are officially housed in emergency and community shelters, as reported by rbb-Inforadio, citing figures from the Senate. In addition, there would be around 13,000 people who live with friends and relatives. Due to rising rents, experts feared that the number would continue to rise in the next few years. with leo / epd

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