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Millions of households left below subsistence level after paying rent

Millions of households left below subsistence level after paying rent

Millions of households left below subsistence level after paying rent

A study has revealed that over a million households in Germany live below the subsistence level (Existenzminimum) after they have paid their rent. Single-parent households are among the worst affected.

Germans left struggling due to high rents

A study funded by the Hans Böckler Foundation has revealed that 12,9 percent (1,1 million) of tenant households in large German cities live below the subsistence level after they pay their rent. The subsistence level is the amount of income a household has remaining after they have paid their rent, as is stipulated in German unemployment law. According to the study, single-parent households struggle the most, with only a quarter living above the subsistence line once rent had been deducted. Around 2,1 million people live in households struggling below the subsistence line.

High rents and living costs also contribute to the widening income gap in big cities, with the income of the richest households 4,4 times higher than the poorest households, even before rent and ancillary costs had been deducted. After deducting these costs, the richest households enjoy an income that is 6,7 times that of the lowest-earning households. The reason for this, according to the Hans Böckler Foundation, is that poorer households spend a much higher percentage of their income on rent, despite living in smaller, less lavish apartments.

The study was undertaken by the Humboldt University in Berlin. The research team was led by Dr Andrej Holm and collected data from the 2018 microcensus. The official housing census collects data from German households every four years.

Destatis confirms burden of high housing costs

The Federal Statistical Office (Destatis) has also looked at the burden of high housing costs on German households. Accordingly, Destatis found that, in 2019, almost 14 percent of the population (11,4 million people) lived in households that were struggling with high rents. Instead of looking at the subsistence level, Destatis considers a household to be overburdened when it spends more than 40 percent of its available income on its housing costs. This could be rent or even mortgage repayments.

“Living conditions are not only an expression, but also a factor of social inequality in our cities,” said the research team at Humboldt University. "The already existing income polarisation is reinforced by the rent payment."

William Nehra

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William Nehra

William studied a masters in Classics at the University of Amsterdam. He is a big fan of Ancient History and football, particularly his beloved Watford FC.

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