Rising Housing Costs Push Millions in Germany into Poverty Risk

A recent study by the Paritätische Gesamtverband reveals a troubling rise in poverty risk in Germany due to soaring housing costs. For 2024, the number of people classified as at risk of poverty has surged by 5.4 million, reaching 18.4 million, or 22.3% of the population. This accounts for an increase of over one percentage point from 2023. The poverty threshold, set at less than 60% of the median income, traditionally fails to consider housing expenses that significantly restrict financial flexibility.

The Paritätische study illustrates this with two hypothetical retirees in Berlin earning the same monthly income of 1836 Euros but facing different rent costs. After accounting for housing expenses, one retiree falls below the poverty line, while the other remains above it, underscoring the impact of rent on financial well-being. Joachim Rock, CEO of the Paritätische, emphasized that soaring rent has become a dominant factor driving poverty risk.

In response to these challenges, the Paritätische calls for stronger measures to close gaps in rent control laws, curb rent exploitation, and boost investments in social and non-profit housing. The German government has already set up an expert commission tasked with improving rent regulations by 2026 and plans to invest 23.5 billion Euros in social housing by 2029.

Meanwhile, direct consequences of housing-related financial strain are evident on the ground. In Berlin's Tegel district, around 1,680 apartments have been without heating since Saturday due to a leak in the local heating network. Residents face indoor temperatures below 15 degrees Celsius and water at six degrees, with intermittent power outages worsening conditions. Tenants were permitted to purchase one electric heater each, with the municipal landlord Gewobag offering reimbursements and compensating for extra electricity costs. However, the heating issue remains unresolved, with initial promises to fix it withdrawn. Alarmingly, rent increases are set to take effect from January despite the ongoing hardships.

This situation in Berlin exemplifies the broader national crisis where rising housing costs and inadequate infrastructure strain households, pushing many closer to poverty and compounding social challenges.