Europe’s Housing Crisis: Prague & Solutions from Vienna, Barcelona & Copenhagen

Prague ranks among the European cities with the least affordable housing. This crisis is prompting a wider examination of housing challenges across the continent. A new podcast, 5:59, has explored strategies employed by Vienna, Barcelona, and Copenhagen – three European metropolises frequently cited in discussions about easing access to housing.

The podcast also highlights key challenges within each city. In Vienna, long-term residents benefit from affordable housing options largely unavailable to newcomers. Barcelona grapples with the impact of short-term rentals, particularly through platforms like Airbnb, which the city intends to ban. And in Copenhagen, prospective tenants can face decades-long waits for social housing.

Prague has long struggled with a lack of affordable housing, both for renters and prospective homeowners. According to The Economist, Prague’s rental costs, relative to average wages, are the second highest in Europe, surpassed only by Tbilisi. This situation is contributing to declining birth rates and labor shortages in key sectors.

To understand potential solutions, the podcast spoke with three experts from cities often at the forefront of housing affordability debates. Sarah Kumnig, a social scientist, provided insights into Vienna’s approach. Montserrat Pareja-Eastaway, a professor at the University of Barcelona, explained the city’s efforts to curb the booming short-term rental market. And Rikke Skovgaard Nielsen, a researcher, described Copenhagen’s attempts to equitably distribute its social housing stock.

Vienna: Affordable for Some, Not All

Vienna is often lauded for its accessible and high-quality housing, largely due to a robust social housing system. Approximately 220,000 municipal apartments and a similar number managed by non-profit housing associations with limited profit margins – where rent and sale prices are calculated based solely on construction and maintenance costs – contribute to this reputation. However, a closer glance reveals a more complex picture.

A significant disparity exists between long-term residents and newcomers. According to Sarah Kumnig, the system presents systemic barriers for those seeking to establish themselves in the city. New arrivals are generally ineligible for social housing for at least two years. Even accessing housing with limited profit margins requires a down payment equivalent to a portion of the construction costs.

“The Viennese housing system works very differently for different people and different social groups,” Kumnig explained. “It provides affordable and secure housing for people who have lived in the city for a long time, perhaps for several generations. But for people who are new to the city, It’s really difficult to find affordable accommodation.”

Current residents of social housing pay an average of €500 to €600 per month (approximately 12,000 to 15,000 Czech crowns). Private rentals typically cost around €800 (approximately 19,500 crowns) or more. However, newcomers can expect to pay around €1500 (approximately 37,000 crowns) for a comparable apartment.

Barcelona Battles Short-Term Rentals

Barcelona faces a more acute housing affordability crisis than Vienna. Economist Montserrat Pareja-Eastaway described the situation as “a complete crisis,” citing a limited supply of municipal housing – roughly one to two percent of the city’s total housing stock – a constrained private rental market, and the financial burden of homeownership.

Rental costs for a 70-80 square meter apartment average between €4,000 and €5,000 per month (approximately 27,000 to 32,000 Czech crowns). Purchasing an apartment costs around €4,000 to €5,000 per square meter (approximately 98,000 to 122,000 Czech crowns). Given a minimum wage of around 32,000 Czech crowns, affordability is a significant challenge.

“This means that the proportion of families who spend more than is generally considered acceptable on housing – that is, more than 40 percent of net income – is very high in Barcelona. And this proportion is particularly high in the private rental sector,” Pareja-Eastaway stated.

The proliferation of short-term rentals, particularly through platforms like Airbnb, exacerbates the problem. Independent platform Inside Airbnb estimates around 20,000 apartments in Barcelona are used for short-term rentals. In response, the city plans to ban these rentals entirely after 2028.

“We’ll notice what happens. I don’t think that if we eliminate the apartments used by tourists and we end up with a city full of private rental apartments, that will be a dream. But the fact that I doubt that this will happen doesn’t mean that the transformation isn’t necessary. Because doing nothing would be even worse,” Pareja-Eastaway said.

Copenhagen’s Housing Fund for All?

Copenhagen, like Vienna, consistently ranks highly in quality of life surveys. However, affordable housing remains scarce. Researcher Rikke Skovgaard Nielsen explained that both rental and purchase prices have risen in recent years, making it difficult to find housing.

“Especially challenging is getting onto the housing market, in other words, buying your first apartment. Once you are on the market, it is easier to move to something bigger, but that first step is the hardest,” Nielsen noted.

A significant factor is the relatively large stock of social housing owned by the city, housing approximately 20 percent of Copenhagen’s population. The city also imposes a price ceiling on the construction of new social housing, linking costs to construction expenses and influencing rental rates.

However, access to social housing is not guaranteed. Despite a seemingly straightforward application process, prospective tenants can face waiting lists of 20 to 30 years.

“On the one hand, there are social apartments with rents below market level. This certainly does not mean that everyone who could be entitled to them has access to them. In fact, it can be said that those who need them most do not get them,” Nielsen concluded. The system does not consider income, meaning those with lower incomes may be unable to afford market rents while waiting for social housing.

The podcast 5:59 further explores the weakening of tenant protections in Austria since the 1990s, Barcelona’s strategies for tackling housing shortages, and the debate surrounding private homeownership in Copenhagen. Listen to the full episode for more details.

Editor and co-editor: Matěj Válek, Dominika Kubištová

Dubbing: Markéta Bidrmanová, Barbora Sochorová, Dominika Kubištová

Sound design: David Kaiser