Hugo Bezombes
Into Europe on YouTube
2024
📅 Context This video titled "Immigration and Europe's Housing Crisis" was published by the channel Into Europe on June 17, 2024. It addresses the pressing issue of housing affordability in European cities, particularly for young people. The discussion is rooted in the complex interplay between demographics, immigration, and housing supply challenges. 🏙️ Housing Crisis Overview European cities are experiencing a surge in housing prices and rental costs, exacerbated by a significant shortage of available homes. This crisis is largely attributed to a demographic shift, where the post-World War II baby boomer generation has created a high demand for housing that has not been matched by supply in subsequent decades. As birth rates declined, government intervention in the housing market decreased, leading to a reliance on the private sector for housing construction. 🌍 Impact of Immigration Immigration has become a critical factor in this housing crisis, with immigrants often competing for the same limited housing resources as young Europeans. In France and the UK, 10% to 14% of the population is foreign-born, with numbers rising to 20% in Paris and 37% in London. Immigrants typically occupy lower-quality housing and are disproportionately represented in social housing, which has led to increased competition for affordable living spaces. 📉 Construction Challenges Despite the rising demand for housing, construction has not kept pace due to various challenges, including material shortages, regulatory barriers, and high interest rates. The war in Ukraine has further exacerbated these issues, driving up the costs of essential building materials like steel and cement. Bureaucratic hurdles in cities like Paris and Berlin have also delayed housing projects, making it difficult to meet the growing demand. 💡 Possible Solutions Potential solutions to mitigate the housing crisis include redeveloping social housing, enhancing the private housing market, and reducing construction costs through regulatory changes. For instance, the Dutch government has increased investment in social housing, while France's Loi Pinel has provided tax incentives for rental housing construction. However, these measures face political challenges and public resistance. 🔮 Looking Forward Experts predict that the housing crisis may persist until the demographic shift of the baby boomer generation transitions, potentially alleviating housing pressure in the 2040s and 50s. In the meantime, addressing the demand for housing through sustainable practices and policies remains crucial for European countries facing similar challenges.
📺 Video Information
**Channel:** Into Europe • **Published:** Jun 17, 2024 • **Views:** 63,687 • **Duration:** 11:25
📝 Description
Into Europe: Why young people can't afford homes.
Find the scripts and sources on the Into Europe website: intoeurope.eu
• Introduction • 1- Why Europe is Missing Homes • 2- Why Aren't We Building More Homes? • 3- How do we tackle the Housing Crisis? • 4- Are there short term fixes? • Support Into Europe!
© All Rights Reserved. Contact information: Email: Into.Europe@outlook.com Twitter: / europeinto Patreon: / intoeurope LinkedIn: / hugobezombes
📹 Video Transcript
[0:00] Do you want to buy a home or have an affordable apartment in the city?
[0:02] Well, tough luck.
[0:04] Across the continents, European cities are faced with exorbitant rental and housing prices, skyrocketing construction costs, and an overall housing shortage.
[0:12] All of that is putting a serious dent in my homeownership dreams.
[0:16] Journalism isn't particularly lucrative, and when I called my parents to ask them to buy me real estate, they unsurprisingly said no.
[0:24] So I wanted to find out why European countries are faced with these unprecedented housing crises.
[0:29] And there are a couple theories out there that immigrants are taking up homes, or that a building material and labor shortage is raising prices. and while there's some pretty interesting videos out there talking about rental policies and the economics of housing crises, as I've come to understand it, it's way deeper than that.
[0:45] It's about demographics.
[0:47] So I dove into the origins of Europe's housing crisis before I could start taking a look at the ways we might be able to tackle it.
[0:54] And I did all of this to find out if there's hope for my and maybe your homeownership dream.
[1:01] To understand Europe's housing crises, we have to admit that housing is first and foremost a demographic issue, and that housing needs match up closely with how many people are and where they live.
[1:11] And that's why we can say that there is a demographic origin to Europe's housing crises, because when we look to housing construction in most European countries, it peaks with the baby boomer generation.
[1:22] As European countries rebuilt after the Second World War and needed to house all the new families and large amounts of children, the need for new homes skyrocketed.
[1:30] But with the private sector unable to keep up with huge demand and a housing shortage, European governments intervened in the housing market.
[1:37] The result was a massive expansion of social housing programs to help young people and families, as well as lower income groups get at home.
[1:44] This worked and millions of apartments and homes were built across Europe and everybody could get a home. many of the baby boomers, moved into that social housing that was just built.
[1:53] And with social housing often being for life in many European countries, many are still there.
[1:58] But with birth rates having fallen rapidly, the next generation was no longer as big and the housing shortage had been solved.
[2:05] And so in every country but Denmark and France, subsidized construction of social housing stopped.
[2:11] Most construction was left to the private sector.
[2:13] And instead of subsidizing housing construction, governments started helping people buy private homes.
[2:18] Since it's cheaper and popular with voters who want to own their own homes.
[2:22] And since postwar housing shortages were no longer an issue, governments could easily go about doing this. some national local governments took it a step further and started selling off their public housing portfolios to private parties to take pressure off public budgets.
[2:36] And out of a belief that the market would be more efficient. all of that's good.
[2:40] Until the late 1990s, when European governments realized that they're in trouble with the first baby boomers edging towards retirement.
[2:47] And so to anticipate the pensions they need to pay out and replace their aging workforces, European governments decide to turn to greater levels of immigration. many of those immigrants have gone to European cities.
[2:57] And while 10% and 14% of France's and the UK population, respectively, or foreign born, that number shot up to 20% for Paris and 37% for London.
[3:08] This contributed to Europe's urbanization and the population structure of many European countries.
[3:12] Went from looking something like this to something like this, with immigration creating a lot of new additional demand for housing in Europe's cities. but because of the lag in construction, by the time Europe started letting people in to make up for the boom or bust retirements with immigration, they had accumulated what can only be described as a 30 year backlog of unbuilt housing.
[3:32] This, in turn, has led to a saturation of cheap housing options across European countries.
[3:37] This really shouldn't come as a surprise.
[3:39] Immigrants to Europe have mostly been low skilled laborers at the bottom of the income ladder, and therefore they're more likely to qualify for this social housing or to go for cheaper private housing. and it's something that has only been accentuated since 2015 with the latest wave of immigration to Europe.
[3:53] But in the medium term, it has meant that immigrants and their descendants compete directly with young Europeans.
[3:58] For the very homes that European countries start building.
[4:01] In the 1990s and 2000, when we look at the data, immigrants to France and their descendants were twice as likely to live in social housing compared with natives, a number that's even higher for non-European migrants.
[4:12] And in the Netherlands and Sweden, that number was 31 and 30%, respectively, as of 2015.
[4:17] According to this study, Umut Unal Bernd Hayo and Isil Erol looking into the impact of immigration on housing, most of the increase in rents in Germany were concentrated in the 25% cheapest homes.
[4:27] And so the question rightly becomes, why aren't we building more houses to respond to this unprecedented increase in housing demand?
[4:35] Well, back in the 1950s through to the 1980s, European countries were building large amounts of social housing, which enabled them to house a large part of their working class population, as well as offer cheap options to young people looking to start families.
[4:47] And in a lot of ways, immigrants occupy the same place within society but that also means that similarly to working class populations of the past and as the data has shown, they will end up living in older, lower quality private housing or social housing more available.
[5:01] And that also means that they're unlikely to be able to be drivers of home construction, being too poor to buy a home or rent newly built private apartments.
[5:10] I wanted to back up this claim with some harder evidence, but the expert asked about the possibility for low income immigrants to drive housing construction said that we would need data sets over the course of 40 to 50 years to answer this question from a scientific perspective.
[5:23] And so it's a question that I have to leave half unanswered for now, even though I have a very strong hunch. but while there's unprecedented demand, building new homes has never been more difficult due to a construction and material shortage, especially since the start of the war in Ukraine, which drove up prices of goods like steel and cement, and a labor shortage in the construction industry.
[5:42] And due to the retiring baby boomer generation. and on top of these aspects, building new homes has never been more difficult or expensive.
[5:49] Higher interest rates have made it more difficult for people to afford mortgages, and added insecurity to the construction sector.
[5:56] On top of this, it's notoriously difficult to get things built in European cities.
[5:59] Paris, for example, has a ban on high rises and the tech champion, ASML, has struggled to get new housing projects approved to house its workers.
[6:06] Cities like Berlin are notoriously bad at delivering construction permits, which means that there are many constraints on housing construction in general.
[6:14] In the UK, the British Nimby movement has made it nearly impossible for new housing developments to be built across the country.
[6:20] And it's this combined lack of supply driven by material shortages and regulatory barriers and sky high demand, driven primarily by immigration, that has pushed up European home prices and rental prices to new highs.
[6:32] So now the real question how do we get out of this?
[6:34] Well, there are a couple of avenues forward which both the EU and individual countries are exploring.
[6:39] And the first would be to redevelop social housing.
[6:42] The Dutch government, for example, cut taxes for its social housing corporations by 1.7 billion, increasing the investment opportunity into social housing.
[6:51] But high levels of government debt mean that governments might not be able to afford it.
[6:55] And if we're honest here, building taxpayers subsidized social housing for immigrants isn't exactly a vote winner.
[7:01] Therefore, another option may be to strengthen the private housing market.
[7:05] France's Loi Pinel for example, gave tax breaks to housing constructions for rental purposes and contributed to building an additional 724,000 homes between 1999 and 2018.
[7:16] But such measures might prove unpopular with voters, who can view this as a gift to the wealthy.
[7:21] And it would result in the very same premium housing which many people can't afford in the first place.
[7:27] Another avenue that countries are exploring is to make building cheaper in general.
[7:31] One way they could do this is by lowering permitting requirements and rolling back environmental rules.
[7:36] The UK, for example, has cut back on pollution rules to make it easier to build homes.
[7:40] And other countries are considering to reduce the energy performance requirements of buildings.
[7:44] But we could also see countries subsidize the building materials industry to make sure that both social and private housing can actually be built more affordably in the long run.
[7:54] And the last option would be to simply wait for the baby boomers demographic boom to pass.
[7:58] Some experts say that this will cause a silver tsunami, with baby boomers owned apartments and real estate coming back on the market when they will die.
[8:07] But that won't happen until at least the 2040s and 50s.
[8:10] And who has patience for that?
[8:12] So do we have any options to make the housing crisis less painful in the nearby future?
[8:17] Well, yes.
[8:18] But these tools are mostly related to actually shrinking demand.
[8:22] European cities have looked at bans on short term rentals, which can make more homes available.
[8:26] And that's because short term rentals have contributed to rate increases in some of Europe's most touristic cities.
[8:31] Other cities are also cracking down on vacant apartments to make sure that more homes can be used by locals, rather than secondary homes or as investments.
[8:39] But it's fair to say that the main lever is immigration.
[8:42] After all, if cities keep adding more people than the houses, they're builds, then the problem can't get any better.
[8:47] In some cases, it's been quite straightforward.
[8:50] Portugal has, for example, crack down on digital nomads in an attempt to reduce housing pressure.
[8:55] But there's a catch if immigrants fill some essential roles as blue collar workers in Europe's economies.
[9:00] That means that reductions in immigration would have to accompany other policies, like potential rises in the retirement age.
[9:06] And it's something that might not even be possible for some physical jobs like the construction sector.
[9:12] So Europe's housing crisis is the result of a demographic bump and a slowdown in housing construction after it happened, which then turned into a 30 year backlog of unfilled housing.
[9:22] That meant that arriving immigrants started competing with locals in particularly the young and poor, by saturating public housing and low quality private housing.
[9:30] But Europe's ability to build its way out of the crisis depends on people's ability to afford homes in the first place.
[9:36] And depending on the European country and the immigrants they received, that might be a tricky issue to resolve.
[9:41] If immigrants are unable to afford housing, then European governments will have to weigh their options and consider their social housing policies.
[9:48] What's sure is that there are no easy solutions.
[9:50] It will take time, money and important trade offs.
[9:53] But what do you think? European countries should do?
[9:55] Should they build more public housing?
[9:57] We allocate living spaces between generations or prioritize their citizens over foreigners.
[10:02] Let me know what you think in the comments down below.
[10:06] Additionally, I wanted to talk to you about an important bottleneck that I have in making these videos.
[10:11] The lack of a fixed studio.
[10:13] Every time I want to record a video, I have to set up sound installation panels, lights and cameras and take it all down once I'm finished recording.
[10:20] And that means that it takes me about 2.5 hours per recording session to set this up. because of this, if I want to cover topics quickly, like something in the news, I can't actually finish fast enough.
[10:30] And I'm also dependent on the meeting room in my co-working space not being booked.
[10:35] It also means that I have to resort to sticking stuff on walls with tape in order to make the image for you seem a little less boring.
[10:41] So to speed up my process and make your watching experience more enjoyable, one of my goals for the upcoming couple of months is to be able to rent out an office space where I can actually build a studio.
[10:51] I estimate that where I am, I would need about €700 a month to be able to afford that.
[10:55] And since this is quite an important fixed monthly cost, I'd also like to be able to rely on fixed monthly income to take this step.
[11:03] And that's why over the past couple of videos, I've mentioned a Patreon crowdfunding campaign where I would need about 180 of the lowest €3 tier in order to make this happen.
[11:11] Patreon now gives access to the exclusive into your discord server, where I actively answer questions and post the occasional meme.
[11:18] So if you'd like to support the channel and more work like this one, then go check out the into your Patreon.
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