The Rent Is Too Damn High

The Rent Is Too Damn High

The Rent Is Too Damn High

A market that is controlled but not regulated will not serve those who are unable to pay.

Illustration & Data Visualization by Olga Souri / Noucmas

There isn’t a single neighborhood in Attiki where someone earning the minimum wage for a 40-hour workweek can afford a two-bedroom home at market rent.

As part of AthensLive’s investigation into rent affordability, we looked into rental prices across the region of Attiki, acquired from the national E-Real Estates network, and captured details of more than 17,000 rental properties that were advertised on — one of Greece’s leading real estate websites — on a single day. By mapping these against Greece’s minimum wage, we found that 0% are actually affordable.

Located between Exarchia and Kypseli, Gyzi is a typical neighborhood in the Athenian center. Crowded with apartment blocks and far too many cars it is named after one of Greece’s most important 19th-century painters, Nikolaos Gyzis. The area was rapidly urbanized during the 1960s and 1970s through the flats-for-land (antiparochi) system that aimed to cover the housing needs of the middle and working-class social strata.

Today, Gyzi is mostly populated by a mix of migrants and refugees who live in lower-floor apartments, while older Greeks occupy the upper floors and young couples and families seeking relief from higher-rent neighborhoods live somewhere in the middle. Add in regular visitors, such as European expats who live and work in Athens; non-European Golden Visa beneficiaries (primarily from China) who invest in old and apartments with inflated prices; and Airbnb tourists waving their glasses to us from the balcony of the recently renovated penthouse on the 5th floor across the street — and you have a fair picture of who lives in the neighborhood.

Before moving here, my partner and I were renting a beautiful 1930s neoclassical house in Kato Petralona with (at least) three other people. After two and a half years of collective living, though, it was time for us to move into a better bathroom-to-bedroom ratio. We started looking for an apartment to buy somewhere relatively close to the center. Our real estate agent took us to viewings in Kypseli, Exarchia, Patisia, Kaisariani and Metaxourgio. Sometimes there were so many other prospective buyers waiting on the street that we had to go inside in groups. We were looking for a one or two-bedroom apartment, built before the 1980’s, and we were not fussy about which floor it was on. In most cases we came across a family already renting the unit but the owner was prepared to kick them out to sell it. A year later, we realized that our (parents’) budgets were set against 2013 expectations, excluding renovation costs. That’s why we ended up renting from a friend for much less than market rates.

Our 30-apartment complex doesn’t have the amenities some tenants covet. No central heating. No concierge service. No parking lot. No extra storage. Just a distant view of the Parthenon from the rooftop, low shared costs, and most recently the banging of hammers and drills from the apartment above ours, so loud that it sounds like they are working in our bedroom. The tearing down of old interiors followed by their rushed reconstruction is slowly becoming part of life in Athens again. But don’t break out the champagne or the moving boxes just yet, because the number of new building and renovation permits is not the only thing rising.

The new interiors are not destined for you

Introduced by Law in 2013, Greece’s Golden Visa has been a priority incentive program for the country’s Ministry of Development and Investments. The program promotes Greece’s low housing prices to non-European individuals who want to cash in at least €250,000 in real estate to acquire a five-year renewable residency in Greece for them and their family and the right to travel within the Schengen Area without a visa.

According to data from the national E-Real Estates network, there have been 5,302 Golden Visa property transactions in Greece up to September 2019, with 80 percent of those properties being located in the greater Athens area. “The investor’s rationale is to refurbish their new properties and then register them on Airbnb with the aim of making extra money while they are out of town,” told me Themis Bakas, the president of E-Real Estates.

Moving into Athens — as more than fifteen thousand Golden Visa beneficiaries have done since 2013 — and finding an apartment has become stressful and mentally challenging for anyone on an average salary and looking to rent or buy.

I met C.K., 39, in a cafe in downtown Athens where her husband works as a barista. She is a lawyer. They have been renting a “beautiful” two-bed apartment of 120 sq.m. at the border between Kato Halandri and Neo Psichiko for the past three years for €480. Now they have to leave it as the foreign owner wants to use it for his own purpose.

“Our home is not a friendly place anymore. It’s full of boxes right now, because the owner gave us a two-month notice twenty days ago. It’s miserable and it feels like we are with one foot out the door, like we no longer live here.” From her voice, I could tell how much she loves it.

Having no other choice, the couple started calling landlords and estate agents. “Something bizarre is going on out there,” she said. “We haven’t even got to the viewing stage. Everything is so expensive, although we have brought down our standards. We have been looking in areas such as Ellinoroson, Holargos, Halandri and most recently Agia Paraskeui. It’s impossible to find a two-bedroom apartment for less than €750. There are many places for €1,000 or €1,200, though. We have been pushed out of the center, although we both work there.”

According to Mr Bakas, rents rose 6.9 percent on average between 2007 and 2019 throughout Greece. But if we focus on the downtown areas of Athens, which attract large numbers of tourists and investors, median rental prices per sq.m. have doubled compared to 2016. That’s the definition of a bubble.

The phenomenal growth of Airbnb is another factor putting pressure on rents as it removes properties from the long-term rental market while keeping prices high. Adjacent to the Acropolis, Koukaki is maybe the most affected neighborhood by the short-term rentals phenomenon which is dominating Athens.

C.B., 35, is one of the neighborhood’s few locals who can still rent at a low price. The owners of her apartment are old and won’t bother making it available via Airbnb. “I am stressed, though. I have renewed my tenancy contract for only two years. I don’t know what will happen next,” she told me.

Her 75-sq.m. home is a carefully curated mixture of treasures from her trips, plants and art. She is a designer and practices yoga and her home reflects that. From her 80-sq.m. corner balcony on the 4th floor I can see the sacred rock.

“When I first moved here, in 2012, Koukaki was still building on its fame as one of the most up-and-coming neighborhoods for international travellers,” she said. Indeed, in 2016 Koukaki ranked 5th on Airbnb’s ‘Top 16 neighborhoods to visit’ global list, with 801 percent growth from 2015. “Today it is saturated with all kind hipster shops, from bars and tavernas to tattoo studios and pottery shops. You can see the effects gentrification has had on the area and its residents. Around 60 to 70 percent of old renters have been forced out of their homes,” she added.

However, Airbnb still operates under an unclear regulatory framework in Greece. On the one hand, on 7 November 2019, the One-member Court of First Instance of Nafplio, a popular tourist destination two hours away from Athens, banned the operation of an Airbnb property due to privacy and security concerns by other owners on the same apartment block. On the other hand, a few days later on November 20, the One-member Court of First Instance of Athens rejected the defence taken by other owners in an apartment building on Victoria Square who had turned against the operation of Airbnb.

Commenting on the decision of the court of Nafplio, Greek Tourism Confederation President Yiannis Retsos wrote on his Twitter account: “The courts must decide on a framework. That’s what is missing in the short-term leasing market. The tourism sector is demanding regulation, not in order to ban activity, but to integrate it properly into our tourism product.”

But while restrictions are being introduced, it is a notoriously hard business to regulate and raises controversial issues in a city such as Athens where it has become an important source of income for people on low or no salaries. Today, income from rent far exceeds economic growth and wages.

“We have seen many young people who lost their jobs during the crisis renovating their grandparents’ old apartments and listing them on Airbnb to gain some money. That’s how the sharing economy started in Greece,” says Mr Bakas. “Gradually, though, big companies which saw the benefits of the short-term rentals and the rising interest in Greece’s tourism took over,” he adds. On November 19, 2019, commercial operators that control multiple listings or large portfolios of private rooms on Airbnb were 50.8 percent of all hosts in Athens.

When you want to pay but you just can’t

How did we get here? Simply put, the combination of global capital, government policies designed to kill off social democracy and failures in housing supply, especially at an affordable level, are reconfiguring Greece’s big cities. It’s the new politics of space replacing the traditional politics of class. There is a lot of wealth coming into the country, but it’s not shared with the poor and middle class renters, who face unaffordable housing costs and the fear of evictions making life worse for the majority.

“Decisions must be guided by the needs of residents for adequate, affordable and secure housing, as opposed to the financial security and gain of for-profit, speculative investors.”

For the poorest folks, affording adequate housing has long been a challenge. But in Greece, it has become a middle-class problem, too. According to ‘The State of Housing in the EU 2019’ report by the European Federation of Public, Cooperative & Social Housing ‘Housing Europe’, the average Greek household pays more than 40 percent of its disposable income (after taxes and social transfers are subtracted) on housing. That’s the most notable exception in the EU (21.1 percent on average) when it comes to meeting housing needs. This includes spending on things like rent and mortgage interest payments, property related taxes, as well as home maintenance and insurance. Serbia ranks second with 35.7 percent, followed by Denmark with 27.3 percent.

This can be largely explained by the fact that net median household incomes in the country were down by 36 percent in 2017 versus their peak in 2010, following on from the Greek financial crisis, while the numbers in full-time employment are currently down by 20 percent from their peak. Rising prices mean that buying property is the best way for people to make money. For domestic investors, it makes sense to buy as much property as possible, which keeps prices high, although in Athens the flood of global capital is the main driver for soaring rents. At the same time as property prices have risen, wages have failed to keep pace, even among those on high incomes, resulting in almost half of the population being in arrears with mortgage or rent, utility bills or hire-purchase payments.

Sorcha Edwards, the General Secretary of Housing Europe, responded to our findings, saying: “This clearly shows the impact of the financialization of housing. It is key for policymakers to demonstrate the political will to reverse this trend in any way possible, whether it is through taxation policy, land-use planning or through the broader housing policy.

“Decisions must be guided by the needs of residents for adequate, affordable and secure housing, as opposed to the financial security and gain of for-profit, speculative investors. At the end of the day, access to adequate housing is a basic human right, we shouldn’t forget that. Investing in affordable housing comes with a high return both socially and financially, on the one hand saving health care expenses, on the other hand improving the protection of vulnerable groups, while also being the foundation that enables everyone to reach their full potential. A housing policy based on the pillars above can be a real springboard out of the social crisis.”

No land for cheap rents

As part of our investigation into rent affordability, we looked into rental prices across the region of Attiki, acquired from the national E-Real Estates network, and captured details of more than 17,000 rental properties that were advertised on — one of Greece’s leading real estate websites — on a single day. Things haven’t been easy for renters on low incomes over the past few years but being able to afford to put a roof over one’s head at a reasonable price is a serious issue in most neighborhoods of Attiki today.

The first thing we mapped was the median rental price per sq.m. across the region.

With the median price of €11.5 per sq.m. for a two-bedroom apartment built before 2004, the southern part of Attiki is the region’s most expensive property belt, followed by the center of Athens at €10.5 per sq.m., the northern and eastern suburbs with €10 per sq.m., and lastly the western suburbs with €5 per sq.m.. When it comes to supply, Glyfada (in the south) ranks first with 535 two-bedroom properties built before 2004 available on on November 27, 2019, followed by Kifissia (north) with 369, Kolonaki (center) with 320, Voula (south) with 221, and Vouliagmeni (south) with 201.

On top of the phenomenon of high supply in the ‘alpha’ neighborhoods above, it is important to note that within our sample of 17,336 rental properties across Attiki there were only 601 two-bedroom units built before 2004 available at up to €637 per month which is the minimum net wage in the country.

With many economists arguing that housing costs of less than one third of household income can be considered ‘affordable’, it appears that minimum wage can’t pay for a two-bedroom apartment built before 2004 anywhere in Attiki. In fact, there were only 11 one-bedroom units available for up to €212 — which is the 33.3 percent of the lowest net wage — none of them on a higher floor than the ground floor. Interestingly, two of them were advertised on as short-term rentals with a rate of €40 and €22 per day.

Next, we wanted to see the results if we limited the geography to just the city centre of the Athens urban area, the largest in Greece and one of the most populated urban areas in Europe, sprawling across the central plain of Attiki.

The situation is dire for aspiring renters across the area. Following Kolonaki, the neighborhood of Ampelokipoi ranks second on with a supply of 139 two-bed units. Pagrati is third with 95 and then it’s Kypseli and Patision avenue with 82 and 80 properties respectively. It is not so much about supply and demand in these areas, but rather the fact that the city no longer serves its people, forcing them into intolerable conditions or out of the city altogether. In 2016, you could rent a two-bed apartment for €3 euros per sq.m. in Kypseli. Today you would need €6.5 on average. The same goes for Ampelokipoi: from €4 euros per sq.m. in 2016, it has risen to €8.5.

Responding to our findings, Lefteris Papagiannakis, the General Secretary of the Hellenic League for Human Rights and former Deputy Mayor of Athens, said: “This is an unreasonable increase in rents.

“What we need is a social platform so that everyone can relate to the struggles that affected communities face everyday. At the same time, local authorities should be able to intervene. Especially in Athens, we need a wider involvement of the municipality in issues that concern its residents directly, which could create fertile ground for democratic participation in local politics.”

In other words, unless action is taken, and the housing market is regulated, a city known for its diversity, hospitality and openness to people of all incomes and backgrounds may be left for no one but rich investors and the local elite.


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