The evolution of housing prices. How the housing issue became a social issue again.

Abstract

Since real estate prices in major German cities have been rising rapidly for about a decade, the housing issue has often been referred to as the "new social question” of our time. However, this view is criticized because unlike previous “social questions” rising rents would not endanger the social integration of broad sections of the population. Is the situation on the German housing markets therefore less dramatic than reports of "rent madness" suggest? Compared with earlier housing questions, the current situation does indeed appear to be less tense. Empirically, too, rental cost burdens across all income deciles, which have been fairly constant since the millennium, do not point to tightening housing issues. In detail, however, housing costs that cannot be assessed as permanently affordable or decreasing apartment sizes of numerous, especially low-income, metropolitan households testify to a significant sociopolitical problem situation. Including other effects of the recent real estate boom – namely the segregation tendencies in large cities and the distributional effects, which are driven by low current housing costs of homeowners and rising land prices – it becomes clear that the current housing question also threatens the participation opportunities of broad sections of the population. In this respect, the housing question is not the only but one weighty social question of the present.