Cities for Rent
Investigating Corporate Landlords across Europe.
A cross-border collaborative project, coordinated by Arena for Journalism in Europe.
High demand for rental flats across European cities has contributed to make housing a very attractive investment. At a time when many people can’t find an affordable and decent flat to live in, reports of a huge increase in investment flows into housing across Europe go hand in hand with stories of abusive practices by ‘corporate landlords’, companies that buy and rent out housing for profit.
Where is all that money coming from? Who are the companies and investors buying so much housing across Europe? How does this phenomenon affect people’s lives and homes in European cities?
During a period of more than seven months, a team of over 25 investigative and data journalists and visualisation experts from 16 European countries, have been working on the cross-border collaborative project Cities for Rent: Investigating Corporate Landlords Across Europe.
We wanted to find the data and visualise these developments, and document their effects on our cities and in people’s lives. We found that since the financial crisis international investment funds and housing corporations have been buying up homes across European cities. And there are different critical issues connected to this.
Back in 2013, the Madrid authorities sold more than 4,800 homes, originally intended to be rented out at affordable prices, to companies controlled by American investment funds like Blackstone. After the sales, conducted with very little publicity, Blackstone started increasing the rents, in some cases by doubling them over a period of three years. Many tenants ended up being evicted.
In Dublin, in May 2019, a representative of another ‘corporate landlord’, a company that owned a big amount of housing, forced his way into a flat and caused important damages inside. The tenants said the ‘corporate landlord’ had been trying to make them leave since the company had bought the building in September the year before.
In Lisbon, in 2017, two companies bought a building for 2.7 million euros and shortly after put it on sale for 7 million as an “unoccupied” building, when in reality there were still 12 families living there.
Tenants of Akelius, a Swedish company that owns in total tens of thousands of homes in cities like Paris, London, Copenhagen and Berlin, have been complaining for years about abusive practices by their ‘corporate landlord’. In 2020, even the UN Special Rapporteur on the right to housing said that Akelius was abusing its tenants’ human rights.
Those kinds of stories have become more common in the last years across European cities. Even in these days of social distancing, it’s not hard to overhear people complaining about housing and how hard it is to find an affordable decent flat in the city.
And then last year the Covid-19 pandemic struck and made even clearer how important it is to have a proper home to live in. Academic studies conducted in the UK and France have shown correlations between the mortality rates due to Covid-19 and the number of homeless people living in temporary accommodation, with areas where the shortage of social housing is most acute, and with the level of overcrowded housing. Another study, this one in the US, showed that an increase of 5% in the number of households living in poor housing conditions resulted in a 50% higher risk of Covid-19 incidence, and a 42% higher risk of Covid-19 mortality. Housing Europe mentions all those studies in its latest report about the State of Housing in Europe, published in March 2021.
And it’s not only NGOs and housing activists who have been warning about the housing crisis in European cities. In January this year, the OECD noted that “less than half of the OECD population, on average, is satisfied with the affordability of housing in the city or area where they live. Housing prices have increased over the past decades, and households are dedicating a larger share of their budget to housing costs than they used to. Low-income and other vulnerable households have long faced this challenge, while an increasing share of the middle class also face affordability issues.”
Back in November 2018, the World Bank had already warned that “availability and affordability of decent housing has become an important economic and social concern in the European Union (…), as housing price increases in metropolitan regions have often outpaced wage increases”.
High demand for rental flats across European cities has contributed to make housing a very attractive investment, so much so that the total investment into residential real estate in Europe has increased more than 700% between 2009 (7.9 billion euros) and 2020 (66.9 billion euros), according to data by Real Capital Analytics.
Where is all that money coming from? Who are the companies and investors buying so much housing across Europe? How does this phenomenon affect people’s lives and homes in European cities?
During a period of more than seven months, a team of over 25 investigative and data journalists and visualisations experts from 16 European countries, have been working on the cross-border collaborative project Cities for Rent: Investigating Corporate Landlords Across Europe.
We found that, generally, ever since the financial crisis American and other international investment funds and European housing corporations have increased the amount of homes they own in European cities. And there are different relevant issues connected to such phenomenon.
In Norway, the country’s biggest private landlord, Fredensborg manages to pay only around 2,500 euros annually in property tax despite owning owning 3.600 apartments for rent in Oslo. In Milan, in Copenhagen and in other cities there are indications that ‘corporate landlords’ may engage in tax avoidance tactics. And that even though generally across Europe real estate investment funds (REITs) already enjoy quite favourable tax incentives.
There are consistent reports of negligence and of abusive tactics by ‘corporate landlords’ in most of the cities researched. Tenants complain about Blackstone in Madrid and in Amsterdam. About Swedish company Akelius in Paris, London, Copenhagen and Berlin. About Swedish company Heimstaden (which is actually owned by Fredenborg) in Ostrava -in the Czech Republic- and again in Berlin. Other companies also seem to engage in such tactics in Lisbon and Dublin and in other cities.
‘Corporate landlords’ are also increasing their presence in other cities like Zurich, Vienna and Prague, while the absence of data in places like Lisbon makes it almost impossible to know how many homes those kinds of companies have been acquiring there.
A city under the auction hammer
In Athens, the lack of an online property registry makes it almost impossible to find out the detailed consequences of the huge Greek economic crisis, which meant that thousands of homes are being publicly auctioned as people can’t keep paying for them.
As for our research, Athens was initially a fiasco. Local governments didn’t know much about the precise situation in the city, and lacked proper data about the investment flows into the rental estate market and the biggest ‘corporate landlords’.
Αt a time when more and more money is going into our homes and ‘corporate landlords’ increase their portfolios, the lack of data availability and accessibility, and of comparable data in Athens, means there is still much to research and to find out if we want to have a properly informed public conversation about housing markets in Greece.
The situation in Greece must be understood in the broader context of household indebtedness on the peripheries of Europe. After 2015, the European Central Bank (ECB) provided incentives for domestic banks to clean their portfolios from NPLs through its asset purchase program. The old NPLs were either accounted for as losses or were sold to debt collectors to make way for a new loan cycle. Furthermore, in June 2018, the ECB announced in the framework of the single supervisory mechanism (SSM) that the banks of the countries of the eurozone could not exceed 20% of NPLs by the year 2021, being less than 10% in the following year of 2022.
That being stated, for financial institutions two roads were possible: either continuing and increasing debt enforcement proceedings including foreclosures and auctions at the end of the process, or selling NPLs to various investment and vulture funds or debt collection companies, who then have the possibility of trying to collect the outstanding loan from the debtor.
According to data from the Bank of Greece, the NPL ratio of Greece in September 2016 was 49.1%, meaning that almost one in two loans was non-performing/unpaid for more than 90 days. In September 2020, the same percentage was at 35.8%, significantly reduced, but still the highest in the EU and far behind SSM’s recommendations.
Therefore, taking the city of Athens as our starting point, we set out to analyze and map the evolution of residential property auctions throughout Greece. Our goal is to generate new knowledge about the indebtedness of households and businesses, while empowering affected communities on the ground through the development and regular updating of an open dataset that gives access to hitherto inaccessible information on the development of auctions in the country.
The map below shows the 2,296 residential property auctions that took place in Athens between September 2018 and January 2021.
How has the process of defaulting Greek NPLs transformed the human right to housing into a profitable business, and how has debt collection become a new form of investment in the housing markets of European peripheries and also of capital extraction from households? Our project, Cities for Rent: Investigating Corporate Landlords Across Europe, should be the first step towards more cross-border collaborative research into the issues at hand and how they affect our cities and lives.
Text by Jose Miguel Calatayud & Sotiris Sideris
Research by Sotiris Sideris
Data coordination by Adriana Homolova
Data visualisation by Tagesspiegel Innovation Lab, Cities for Rent
Illustrations by Moritz Wienert for Cities for Rent
Media Partners
- Austria, Vienna, ORF
- Belgium, Brussels, Apache
- Czech Republic, Prague, Deník Referendum
- Denmark, Copenhagen, Information
- France, Paris, WeReport (investigation and reporting), Mediapart (publishing partner)
- Germany, Berlin, Tagesspiegel
- Greece, Athens, AthensLive (English language), and Reporters United (Greek language)
- Ireland, Dublin, Dublin Inquirer
- Italy, Milan, IrpiMedia
- Netherlands, Amsterdam, Follow the Money
- Norway, Oslo, E24
- Portugal, Lisbon, Expresso
- Slovakia, Bratislava, Aktuality
- Spain, Madrid, elDiario.es
- Switzerland, Zurich, Reflekt (investigation and reporting), Republik (publishing partner)
This investigation was coordinated by Arena for Journalism in Europe. The production of this investigation was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund. The Rosa-Luxemburg Stiftung has supported part of the research.
