Rent costs a third of workers’ wages

Low paid workers spend at least a third of their wages on rent in most member states, new trade union research shows on the eve of the confirmation hearing of the EU’s first commissioner for housing.

The average cost of rent for a property of at most two bedrooms eats up 35% or more of the pay packets of workers earning the statutory minimum wage in 14 member states.

Rent accounts for half of monthly earnings for low paid workers in three countries (Netherlands, Ireland, Luxembourg) and, in a further eight member states it is equivalent to 40% or more.

And the latest Eurostat data shows the cost of rent has risen by up to 200% across the EU.

The cost of rent is based on the average across each country but the situation can be even more severe in cities, where most jobs are concentrated.

The analysis, carried out by the European Trade Union Institute, is published before the hearing in the European Parliament of Dan Jørgensen the candidate to become the EU’s first housing commissioner.

Jørgensen will be responsible for taking forward the “first-ever European Affordable Housing Plan,” to which Commission President Ursula von der Leyen committed in her political guidelines.

The European Trade Union Confederation (ETUC) is calling on Jørgensen to take the following actions as part of the plan: 

• Ensuring quality and secure jobs, promoting collective bargaining and increasing statutory minimum wages to meet the cost of housing;
• Actions to tackle speculation and hoarding, including through more progressive taxation for real estate and reinforced regulation of short-term rentals;
• Support for investment in non-for-profit / limited profit / public / social affordable and adequate housing including through EU investment tools, flexibility in the application of the economic governance rules, and the upcoming revision of the state aid rules;
• Social conditions on public funding and state aid for housing projects (including by the EIB) to ensure quality and direct jobs, as well as better working conditions in the construction sector;
• Guaranteeing minimum quality, health, accessibility and safety standards for accommodation, and rent regulations to protect renters against exploitation and abuse, ending no-fault evictions, and suspending evictions of vulnerable families;
• Better planning that ensures that housing is connected with public services of high-quality, including transport, healthcare, education, childcare.

More details on the ETUC's demands are available in the ETUC Resolution on the right to adequate, decent and affordable housing.  

ETUC General Secretary Esther Lynch said:

“Millions of working people in most member states see a huge part of their wages leave their bank accounts as soon as it’s come in simply to keep a roof above their heads.

“Despite paying high rents with low wages, their accommodation is often totally inadequate, exposing them and their families to health conditions.

“Others are forced to sleep on the couch in their friends’ apartments, continue living with their parents when possible, and even sleep in their cars.

“At the same time, very wealthy individuals and investment funds are extracting exorbitant profits from housing through unethical practices which should be banned.

“The appointment of Europe’s first commissioner dedicated to housing could not come soon enough. Working people now expect him to take action which matches the scale of Europe’s housing crisis.

“It is time we once again treated adequate housing as a basic human right by building more social homes and properly regulating the rental market.”

Notes

Statistical note: Data based on EU-SILC 2023, average and median total monthly rent [hh060] for tenants paying rent at market rates [hh021] for a dwelling up to 3 rooms [2 bedrooms]. Rents are adjusted to 2024 (first half) using the HICP index for actual rents [CP041] (https://ec.europa.eu/eurostat/databrowser/view/prc_hicp_midx__custom_12267239/default/table?lang=en)