Apply for housing benefit: If the third is not enough for the rent

Rents in Germany are rising.

Apply for housing benefit: If the third is not enough for the rent

Rents in Germany are rising. The well-known third of the income is often no longer sufficient to pay the housing costs - in many regions it is already around 40 percent. That weighs.

Rents are going up, but salaries aren't necessarily going up. Added to this is inflation. Given the financial burden, many people find it difficult to pay for housing. The principle of spending only a third of your income on rent and having the rest for your livelihood is increasingly faltering. What is the ratio of income to rent under the new framework conditions? And what to do when things get tight?

Franz Michel from the German Tenants' Association (DMB) in Berlin has a clear answer to the latter question: "If the third is no longer enough, tenants should apply for help such as housing benefit or seek advice on whether costs can be reduced." This includes checking for potential savings in energy expenditure as well as checking whether the rent meets the requirements of the rental price brake.

According to observations by the German Economic Institute (IW), there is room for improvement when it comes to housing benefit. According to this, around half of those entitled do not apply, even though they are entitled.

Moving out of the previous apartment is rarely an alternative. The supply of affordable housing in metropolitan areas is too scarce, says Michel. Michael Voigtländer from the IW argues in a similar way: "Leaving the existing stock for a new apartment is not necessarily cheaper". Precisely because of the low supply and strong demand at the same time, which is causing rents to rise in many places despite the rent control and cap limit.

According to the experts, people on low incomes, young professionals, students and pensioners are particularly affected. Voigtländer recommends that students also pay attention to housing costs when choosing a place to study. For example, cities in eastern Germany or in the Ruhr area are cheaper than hotspots such as Bonn, Munich or Frankfurt. Voigtländer also suggested the idea of ​​staying with his parents while he was studying.

Alternatively, the good old flat-sharing community could become more attractive again for young professionals and students. Young people with an affinity for the city sometimes tend to take a different approach: for example, they do without a car so that they can pay the higher rent. "The preference of this generation is to spend more on housing," says Voigtländer.

This phase often ends with starting a family. The move to the commuter belt follows. Those who neither want nor are able to do this often live with more people in an apartment that is sometimes too small because their income does not allow them any leeway.

"In the lower income range around 1300 euros net, there is not much left with a third of the housing costs," says Matthias Günther, director of the Hanover-based Pestel Institute. Actually, people in places with high housing costs should also earn more there in order to be able to afford to live in these regions. This is usually not the case in the low-wage sector. According to Günther, the consequences are long commuting distances due to the move to rural regions that are estimated to be cheaper.

Real estate experts, politicians and social scientists use the one-third limit to compare rental costs with the cost of living. "A rental burden rate of more than 30 percent of household income, especially in households with lower incomes, is considered problematic because then there is relatively little money left for other lifestyles," says DMB specialist Michel.

Despite this importance, the border is not uniformly defined. Michael Voigtländer speaks of an "approximate multi-year value" with statistical roots. Matthias Günther calls them "arbitrarily chosen". Whether it refers to the net rent or the gross rent including heating is just as unclear as whether the net or gross income is used as a basis. The Pestel Institute and the DMB take a third of the net income and the rent including heating as a benchmark.

In recent years, the rent-to-income ratio has remained relatively constant. Mainly because both rose by roughly the same amount. In the meantime, the proportion of rent is growing. "The benchmark was already exceeded for many tenants in 2021," says Michel. In some cases, people already have to pay 40 percent or more of their income for the rent including heating.

The causes are manifold: the Pestel Institute lists as examples miscalculations in population growth and housing planning, demographic pressure, the loss of social housing, inflation, rising energy costs. According to experts, the reluctance to move to regions with vacancies and low rents is also generally keeping the rental share high.

The situation is not new. "In the 1950s, the rent/income ratio was the same as it is today," says Günther. In London, 50 percent of the net is considered normal.

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