Rental housing: The biggest challenge of modern cities.

VTV.vn - When young people have to spend a large portion of their income on rent, the pressure extends beyond social security to impact long-term growth.

The rental property journey of young Spaniards.

In many economies , affordable rental housing is becoming an important component of urban welfare policy. According to last year's European Commission (EC) figures, approximately 31-32% of the European population lives in rented housing. Yearly trends show a resurgence in the rate of renters in Europe, with renting increasingly becoming a form of long-term rather than temporary residence, especially in large cities.

The European Union reports that the number of short-term rental properties has increased by 93% between 2018 and 2024. However, for this segment to become truly accessible, the challenge lies not only in the number of apartments available, but also in the widening gap between the incomes of young workers and rental prices. Spain is a clear example.

At 30 years old, with a stable job, Soraya Fakir still hasn't been able to own a truly independent living space in Madrid. For many young Spaniards, financial independence no longer equates to the ability to live independently.

Soraya Fakir, an office worker, shared: "I think many people my age either can't afford to live on their own, or can only do so under very bad conditions. At 30, even with a job and stability, you still don't have a space that's truly your own. You have to share a house with strangers, pay very high rent, and have too little left for living expenses. You can't plan for the future, simply because you don't have the money to do so."

Last weekend, thousands of renters and prospective homebuyers took to the streets of Madrid to protest. Their slogan was simple: "We can't take it anymore."

"We're tired of having to endure this situation, receiving no benefits and being the group most severely affected by the speculative behavior of a few individuals. We want house prices to come down," said Soraya Fakir, an office worker.

According to Eurostat, housing costs in Spain are projected to increase by nearly 13% by the end of 2025 compared to the same period. Meanwhile, the supply of public rental housing remains very limited. Spain has less than 2% of its housing supply in public rental housing, significantly lower than the OECD average of 7%. This figure is 14% in France, 16% in the UK, and as high as 34% in the Netherlands.

Raluca Budian, Deputy Director of the Worthy Housing Observatory (ESADE), stated: "Spain has never built a stable public rental housing fund. We only have about 2%, while many other countries can reach 20% or 30%."

According to Ms. Budian, the problem is further exacerbated by the concentration of population in large cities, tourist rentals and seasonal housing drawing supply away from the residential market, and wages failing to keep pace with rising housing prices.

The Spanish government has approved a €7 billion plan to address the housing crisis. This plan triples public investment in housing over the next four years; approximately 40% will be allocated to expanding the supply of public housing, 30% to home renovations, including improving energy efficiency and construction in sparsely populated areas. The remainder will be subsidies, focusing on young people.

Rising rents and incomes failing to keep pace are making it difficult for many young Spaniards, even those with stable jobs, to live independently and plan for the future.

Affordable social housing policy in Vienna

The Spanish story shows that supporting rental housing is not just about building more apartments. It's also about how a country can readjust the balance between income, rent, and the right to independent living for the younger generation of workers.

In Vienna, the Austrian capital, the government appears to be getting very close to achieving this goal, with its social housing rental model.

On average, renters in Vienna pay only about one-third the rent they pay in London, Paris, or Dublin, according to a Deloitte study. Part of the reason is quite simple: public housing is city-owned.

Vienna has approximately 220,000 social housing units. A quarter of Vienna's residents are social housing renters, and if we include the approximately 200,000 cooperative housing units built with state subsidies, this number exceeds 50% of the population.

In Vienna, it's a fact that a young person with a modest income can rent a two-bedroom apartment near the city center for less than 600 euros a month. Behind this lies a philosophy of urban development that Vienna has pursued for almost a century.

For many years, Vienna has been ranked by The Economist as the world's most livable city. One of the key factors is its large-scale social housing policy, which helps keep inner-city rental prices affordable for most people.

Unlike many countries that prioritize social housing only for very low-income groups, Vienna proactively maintains a mix of residents from various social classes. Students, young workers, and members of the middle class can all access the system if they meet the initial income requirements.

That philosophy began to take shape after World War I, when Vienna faced a severe housing crisis. The city used revenue from luxury taxes to build tens of thousands of social housing units in less than two decades.

It is noteworthy that Vienna does not view social housing as a temporary solution, but rather the city continuously maintains public land reserves for the development of affordable housing. More than 40 years ago, Vienna established a fund for land acquisition and urban redevelopment, currently holding approximately 3 million square meters of land specifically for social housing construction.

In 2019, Vienna further introduced regulations: all large-scale housing development projects must allocate approximately two-thirds of their area to subsidized apartments. Since 2015, the city has restarted its social housing construction program after more than a decade of interruption. In 2024 alone, the budget allocated to this sector reached over 557 million euros.

Amidst soaring rental prices in many major cities worldwide, Vienna demonstrates a different approach: viewing affordable housing not merely as a welfare policy, but as part of a strategy to maintain social stability and sustain long-term urban economic vitality.

Many countries are viewing affordable rental housing as key to social stability, sustaining growth, and retaining young workers.

Singapore: Housing is a tool for social stability.

Meanwhile, in Asian countries like Singapore, housing is more than just a real estate story. This island nation views rental housing as part of a strategy to stabilize society and maintain an urban middle class.

Currently, nearly 80% of Singaporeans live in public housing estates managed by the Housing Development Board (HDB). These housing estates are typically integrated with MRT (Mass Rapid Transit) systems, schools, kindergartens, food courts, and employment centers, forming complete urban communities.

In 2025, Singapore continues to expand support for first-time homebuyers and young families amid rising living costs and housing prices. The government believes that access to affordable housing is directly linked to birth rates, social stability, and the ability to retain young urban workers.

For Singapore, housing is not just an asset to accumulate, but also a tool for maintaining quality of life and the long-term competitiveness of the economy.

The long-term challenge of the rental housing market.

Despite their different approaches, Vienna and Singapore share a commonality: they view housing as part of a long-term social stability strategy. However, for many other cities, keeping housing affordable remains a complex issue with significant trade-offs. Why is this the case?

Clearly, if this market is left unregulated, low-income earners and young workers will not have sufficient financial resources to access rental housing. However, if too much intervention in rental price caps protects landlords, after many years, it could lead to consequences: Firstly, landlords may no longer want to rent long-term, but instead opt for short-term rentals that yield higher returns; secondly, businesses may hesitate to invest in construction in this segment.

Each year, around 20 million tourists flock to Barcelona, ​​Spain, making it one of the most visited destinations in Europe. But along with the influx of tourists comes increasing pressure on the housing market.

In the Barceloneta district near the seaport, many residents believe that apartments are gradually being transformed into short-term accommodations for tourists instead of long-term rentals for local people.

Esther Jorquera, a resident of Barcelona, ​​said: "It's clear that the city is overcrowded and putting pressure on local people when it comes to renting. We need fewer tourists, but in a controlled and truly effective way."

Barcelona officials say nearly 10,000 illegal tourist rental apartments have been shut down in recent years. However, control is not easy.

Juan, a housing inspector in Barcelona, ​​said: "If caught, many owners of small rental apartments will stop. But it's different for large owners who own 10, 15, or even 60 apartments across Barcelona. They don't worry too much about the 60,000 euro fine, because they can quickly recoup that money from other apartments."

Barcelona is demonstrating a growing reality in many major cities: City apartments are no longer just for living, but are increasingly becoming an asset class that generates income from tourism and high-income earners from other countries. This is also why the challenge of keeping rental housing affordable for young workers is far more complex than simply building more housing.

From Europe to Asia, it is evident that many governments are gradually changing their perspective on the rental housing market. While previously housing was primarily viewed as an asset to own and accumulate, an increasing number of countries now consider access to affordable housing as integral to long-term social stability, labor productivity, and urban competitiveness.

When young people have to spend a large portion of their income on rent, it becomes difficult for them to save money, start a family, and have children. In a modern urban economy, the problem of rental housing is therefore no longer just a matter for the real estate industry, but is gradually becoming a problem for economic growth.

Source: https://vtv.vn/nha-cho-thue-thach-thuc-lon-nhat-cua-cac-do-thi-hien-dai-100260527104210293.htm