The increase in rents is attributed to a number of factors, which have to do with both the current conjuncture (such as the touristification of the housing stock and the pandemic) as well as with long-term/structural factors (e.g. broader changes in the economy and the production model, significant changes in the ownership structure of residential property due to the increase in investment in the housing market).
When it comes to Greece, the main reasons for the spike in rental costs are:
The increasing difficulties in accessing affordable housing are also directly related to the state’s long-standing failure to produce a stable policy for access to rental housing and tenant protection. Despite European recommendations for tenure neutrality, when it comes to protection and public expenditure, there is a clear priority towards supporting home ownership through direct and indirect benefits.
The supply and availability of rental housing is largely based on the investment strategies of small landlords and this specific sector remains poorly monitored, regulated or controlled. At the same time, policies for the supply of affordable rental housing (social, non-profit, cooperative) are completely absent.
When the pandemic broke out and global tourism came to a standstill, property bookings initially dropped but then gradually began to recover. Short-term rentals proved to be resilient, flexible and attractive, as they were able to respond, more so than the traditional tourist accommodation options (hotels, resorts etc), to the new demand that visitors expressed for “safe” tourist destinations and accommodation. In its financial report for the third quarter of 2021, Airbnb stated that it recorded the highest revenues in its history. More specifically, its net revenue for its most profitable third quarter to date – that of 2021 – was $834 million, 280% higher than its revenues in the third quarter of 2020, and 213% higher than that of the third quarter of 2019.
Meanwhile, the market for short-term rentals is expanding to include so-called “medium-term leases“. This new type of rental is linked, among other things, to modern digitalisation, the subsequent spread of teleworking and the infamous “digital nomads“, who can work using their laptops from anywhere in the world, and each time rent a place to stay temporarily in their chosen location.
The explosive development of short-term rentals in Greece is due to a number of reasons. Initially they developed within the context of the multi-layered crisis, a facet of which was the housing crisis. Insecurity, unemployment and the “burden” of home ownership coincided with an increased demand for tourist accommodation. Tourism in Greece has seen a huge surge since 2013, following the international trends of “overtourism”, the shift towards a search for “authentic experiences” and the suggestion that tourists could “live like a local” in the areas that they visit, which has become a slogan for short-term rental companies.
Moreover, Athens’ touristic identity is changing from a stopover to and from traditional touristic destinations mainly during the summer, to a year-round “city break” destination. The campaign of the Greek National Tourism Organisation entitled “Visit Greece, a 365 day destination”, which attempts to extend the tourist season throughout the year, has contributed to this, while the plans for tourism for the period up to 2030 are based on similar objectives.
Especially during the early stages of their development, short-term rentals were an opportunity for many individual owners to earn an additional income. However, the location of an Airbnb property is a key determinant of the income it can generate. In the most central areas of the Municipality of Athens that have good public transport and are close to tourist attractions, the average short-term rental price exceeds €80 per night, while in the most remote areas, they do not surpass €40. So while for some people short-term rentals provide a modest but essential supplementary income, for others they can be a new and lucrative source of wealth.
In recent years, fewer owners accumulate more and more short-term rental properties. The number of hosts listing more than two properties on the platform is constantly increasing, reaching 62.5%. At the same time, an ever increasing number of management companies enter the short-term rental market, handling tens or even hundreds of properties. Such an example is Mint, which manages 350 properties.
This increase highlights short-term property rentals as a new and promising field for real estate speculation. It is worth noting that the increase in the number of companies operating in the short-term rental market led to the creation of the Short-Term Accommodation Managers Association (STAMA Greece) in 2021 with the objective of defending their interests.
The increase in the number of companies involved, also reflects the growing “professionalisation” of the short-term rental activity as well as the growing competition that is putting considerable pressure on the market’s small “players”, while at the same time gradually displacing them.
These developments are also affecting the traditional tourism sector. On the one hand, competition between traditional forms of tourist accommodation and short-term rentals is increasing, a fact which often emerges in the public debate, particularly from the point of view of traditional tourism providers, who present certain comparative figures in order to draw attention to unfair competition. On the other hand, there seems to be a simultaneous boost of the traditional sector, with Athens emerging as a “hotel magnet”.
It is worth noting another factor that has played an important role in the rapid and unhindered development of short-term rentals. Previous gentrification efforts in Athens encountered obstacles in the form of the fragmented and socially differentiated (horizontal) ownership model at the level of Athenian apartment buildings. However, short-term rentals seem to be able to overcome such obstacles, on the one hand, due to the exploitation of even the least privileged apartments located on the lower floors of apartment buildings and, on the other hand, due to the emergent concentration of properties in the hands of fewer owners, with the risk of overturning the social diffusion of property (Balampanidis, Papatzani, Pettas, 2021).
Some institutional developments that are linked to the general broader effort to attract foreign investment in Greece and the involvement of new players in the real estate market, also contribute to the negative impact that short-term rentals have on the rental housing crisis. There is a recent institutional framework aiming to attract “digital nomads” that follows a similar logic, inviting this type of employees (foreign professionals who work remotely, with a fixed income of at least €3,500 per month) to Greece – a move that increases the demand for the afore-mentioned new type of “medium-term leases”, especially in the Athens city centre.
The dominant political discourse on investment, political promises made to aspiring investors and specific developments all aim at and contribute to the creation of a favourable climate for investment as well as increased investment expectations. An indicative example would be is the political announcements and/or the implementation of major urban redevelopments that include or are expected to indirectly attract significant investment (also) in residential properties, such as the redevelopment of the former airport in Elliniko, the redevelopment of Faliro Bay and the plan to create a government park at the former PYRKAL premises in the Municipality of Imitos.
More characteristic examples are several institutional developments that create ever increasing opportunities for investment in residential real estate as well as housing commercialisation, such as the institutional framework for the granting of “golden” residence permits and the framework that led to the liberalisation of auctions.
News reports indicate that a new institutional framework is currently being drafted for the notorious Real Estate Investment Companies (REITs), aiming to broaden the scope of their activities. More specifically, the plan is to allow REITs to operate at the same time as development companies, hotel operators, servicers, solar and wind farm developers, as well as residential property managers – that is a wide range of activities that are currently carried out by different ‘sectoral’ entities and, of course, with different levels of tax relief.
The new (projected) possibilities for REITs give them a significant foot in the door of investment activity around (residential) real estate, an activity in which they are likely to develop an interest, thus adding an additional “big player” to the housing market.
Significant pressure is obviously being exerted by the investors aiming to attract and facilitate investment in residential real estate, through relevant policy initiatives and favourable institutional interventions. It is indicative that, during the recent Prodexpo conference on the development of the Greek real estate market, those involved in the real estate market emphatically pointed out certain key “needs”: the need for changes in the institutional framework to facilitate investment (mainly referring to the need to simplify bureaucratic procedures that hinder investment in the real estate market, such as restrictions regarding tenants’ evictions), the need for large projects that can further attract domestic and international investment interest, as well as the need to expand bank lending to businesses in order for them to invest in the real estate market.
Greece has a large surplus of housing compared to its population (Γράφημα 1) and high rates of multiple ownership, i.e. owners owning more than one property. 4
In Southern Europe, the existence of a large number of vacant houses and buildings is related to the key role that housing production has played in the economy over time. Households have been actively involved in housing production by investing savings or borrowing, not only for the acquisition of their primary residence, but also for holiday homes or a second residence. Thus, households often own more properties that are not being systematically utilised.
At the same time, significant changes in the country’s growth model, different phases of urban expansion and changes in living and working patterns have left many unused/vacant office, services, manufacturing and industrial buildings.
The excessive supply of new houses during the real estate bubble (peaking in 2007), the inability to invest in real estate repairs during the recession and the lack of institutional tools and building remodelling and reutilisation programmes have led to the abandonment of valuable social resources.
We would argue that some of the most common reasons 5 for which there are vacant flats in the cities’ centres are the following:
It is clear that, in order to make use of vacant houses and buildings, there is a need for systematic research regarding their actual number and characteristic features, as well as on the reasons why their owners keep them vacant.
Many municipalities and local authorities have developed tools and strategies in order to identify vacant houses by cooperating with service companies, mainly electricity and water supply, since they have data on properties with zero or very low consumption that might be vacant (Barcelona, Wallonia), or by collecting information from citizens (Scotland, UK).
In a survey that the Aristotle University of Thessaloniki conducted on Affordable housing, they used data collected by the Hellenic Electricity Distribution Network Operator (DEDDIE) regarding power cuts, in order to identify potentially vacant properties.
In the Thessaloniki Metropolitan area, 37,235 power cuts were registered in properties with previous residential use (48% of all power cuts), of which 14,800-16,400 (42-43%) in the Municipality of Thessaloniki. Such methodologies should be followed by a field survey or other sources of information, in order to confirm each property’s condition.
The question remains as to the impact of the increase in investment made in real estate in recent years, particularly in urban centres, with the change of use of many buildings to accommodate tourism-related enterprises and the conversion of houses and buildings into short-term rentals. Updating the available data after the recent census of 2021, despite the existing deficiencies in the registration process, may reflect the changes in numbers or in the vacant properties’ characteristic traits.
In the context of the family-oriented southern European social model, young people in Greece depend heavily on the family to cover their housing needs, staying longer in the parental home or with relatives, or receiving financial support in order to be able to cover the cost of an independent dwelling, while intergenerational transfers also play a decisive role in the acquisition of a first home (through parental donation or bequest, transfer or inheritance).
In Greece, just like in Europe, there is an increasing polarisation tendency between those within the social protection system, who own their own home and have a supportive family environment on the one hand and those who don’t on the other (insiders-outsiders dynamic).
The housing production mechanisms that were passed down from generation to generation in Greece, although until recently maintained social and upward mobility and ensured social cohesion to a certain extent, can no longer function.
Since most households’ capacity to support their younger members is becoming more and more restricted 3 and access to home ownership through mortgages is getting harder, young people increasingly depend on rental housing.
All of the above are directly linked to the gradual deregulation of the labour market and the devaluation of labour costs, which particularly affects young people, hampering their economic independence and creating a broader context of economic hardship.
Greece has the highest youth unemployment rate in the EU (ages 25-29). The relevant percentage was 27.2% in 2020 (with the EU average being 10.3%), which is significantly lower than during the recession (43.3%). Still, it has increased from 2019, before the Covid pandemic, when it was 25.8%.
Young people’s income fell by 40% during the recession – more than any other age group of workers.4 The young are generally paid the lowest level of wages and are unable to cover their basic needs.
Young people are more exposed to the precarious working conditions that have been prevalent and normalised by the flexibilisation of the institutional framework. According to research carried out by the University of Crete, underemployment, part-time/seasonal and other flexible forms of labour5 have increased dramatically, thus increasing the marginalisation and social vulnerability of young people.
Moreover, as reflected in a recent Eurofound study on the impact of the COVID-19 pandemic on young people in the EU, Greece comes first in the percentage of young people (15-29 years old) who found themselves out of work during the pandemic, reaching 30% and at a significant distance from the rest of the EU countries (with Spain coming second, with a rate of 12.1%), thus reflecting the high job insecurity that young people are facing. Despite the occasional mentions of the problems that young people are facing and the need for policies that would need to be implemented in order to keep and encourage the repatriation of scientists, no substantial measures have been adopted.
Significant changes in housing production and acquisition patterns that have been taking place since the mid-1990s (e.g. joining the euro area, the mortgage market liberalisation, the construction boom and the price increase) have affected access to home ownership, which is becoming increasingly unequal11.
The pattern of access to home ownership that used to be dominant during the past decades, was destabilised during the recession, 12 due to shrinking incomes, increased difficulties in accessing bank loans as well as the households’ reduced ability to save any money given their reduced salaries. Examples of obstacles include the need for increased equity, the risk of interest rate fluctuations and income insecurity.
After more than ten years of ongoing crisis, with residential property prices rising alarmingly and housing costs becoming overwhelming for more and more households, the chances of maintaining property that has already been acquired (mainly the primary residence) and, even more so, the possibility of acquiring new owner-occupied housing seems to be an unlikely possibility for both older and, even more so, younger generations. In the future, the home ownership rate is likely to decrease even further, given the significant and escalating increase in house prices both in a local as well as in an international level, combined with the impoverishment of households.
The lack of a commonly agreed definition of the issue at a European level impedes an accurate mapping of households and citizens living in or at risk of energy poverty, thus making it harder to develop effective strategies to tackle it.
Energy poverty is a pressing issue that is affected by the complex interaction of the increase in energy prices, the inability of people to pay their bills, the households’ stagnating or decreasing available income, the high unemployment levels and the slow rate of energy efficiency upgrades in residential buildings which has a well-documented negative social, environmental and economic impact.
In the Ministry of Environment and Energy’s Long-Term Strategy for the Building Stock Renovation, issued in 2021, it was stated that approximately 40% of final electricity consumption in Greece is due to building uses, of which 95.4% are residential. A report published on the Energy Sector in Greece by the Foundation for Economic & Industrial Research (IOBE) and DiaNEOsis, similarly concluded that the residential sector absorbed 32.8% of final electricity consumption in 2018, second only to the services sector at 34.9%.
According to the Ministry of Environment and Energy’s strategy plan, “Over half of the residential houses in the country (55.7%) were built before the 1980s, that is prior to the implementation of the Buildings’ Thermal Insulation Regulation, and therefore do not include thermal insulation, thermal protection and appropriate thermal bridging”. “42.7% were built until 2010 and therefore only had to have partial thermal insulation systems installed, and only 1.6% were built after 2010, that is after the Energy Performance of Buildings Directive was implemented”.
The inability to invest in property maintenance/ repairs, the extremely limited supply of new housing during the 10 years of economic recession, as well as the difficulty that lower income households faced regarding access to the “Energy Saving at Home” programme, have contributed to the perpetuation of these inequalities.
The price surges that occurred during the winter of 2021-2022 brought unsustainable increases in electricity and heating costs, thereby affecting households even further. According to ELSTAT data concerning the most significant price changes from January 2020 to January 2021, electricity costs increased by 56.7%, heating oil by 36% and natural gas by 154.8%.
Finally, the restrictive measures imposed as a result of the COVID-19 pandemic, have had a significant impact on energy needs. 75% of people are now spending more time at home, 60% increased their use of electrical appliances, 40% increased their use of heating by an extra 1-5 hours per day, 45% experienced changes in their employment status, while 50% saw their income decrease.
The causes of homelessness are linked to the precarisation of labour markets and the increase in poverty, the curtailment of welfare benefits, the distress caused by the operation of the real estate market, housing financialisation, and the impact of aggravating social factors such as migration, age, health problems, the collapse of family relationships or the insufficient support for people undergoing deinstitutionalisation (from welfare, prison, hospital and other institutions).
Historically in Greece, social policies for vulnerable groups, including the homeless, have been characterised by insufficiency, fragmentation, incoherence, lack of centrally controlled coordination, and the predominance of an operational sense of charity. 3 The aforementioned traits are also linked to the lack of a more comprehensive policy that would address access to housing, using the high rates of home ownership as an excuse.
In addition to the fact that there isn’t a comprehensive set of policies to address the vulnerable groups’ access to housing, we should also highlight the fact that said groups are invisible and absent in the public discourse. This is linked to the dominance of the family-centred model in Greece, which assigns all responsibilities regarding the support of its members to the family.
All of the above became even more apparent during the pandemic. The consecutive lockdown periods showed that “staying at home”, as a policy, is unable to protect the most vulnerable social groups. On the contrary, it highlights several inequalities and exclusions (e.g. for those experiencing housing insecurity) and for some, it may even be a threatening or dangerous condition (e.g. in cases of domestic violence, LGBTQI+ people).
Today, while housing insecurity is increasing for many individuals and households, social policies are weakened or oriented exclusively towards tackling the most publicly visible and extreme aspects of this issue.
A number of housing schemes and benefits developed in previous years remain fragmentary and with uncertain funding (especially the support schemes offered by some municipalities, which are run using mostly european funds). In the absence of a central planning and coordination public body, as well as a comprehensive framework for public intervention regarding housing, those very programmes, schemes and benefits should form the basis for an integrated and long-term housing policy.
The programmes, schemes and benefits that are being implemented in Greece at the moment are the following:
Rent subsidy: The only horizontal housing policy. The eligibility criteria are based on people’s income, property and residence location. With a total annual budget of €300 million, it targets 260,000 households and 667,000 people.
The “Housing and Work” scheme, which is an extension of the “Housing and Reintegration” programme that was launched in September 2014 and was completed in February 2019. The total budget of the programme amounts to €10 million and aims to reintegrate 600 households in the eligible municipalities across the country. It is implemented by municipalities with a population of more than 100,000 inhabitants.
The Guaranteed Minimum Income that is given to the homeless population since 2017, and reaches 273,000 low-income households in total.
Institutions/ organisations that provide services to homeless people in each (participating) municipality, such as day centres, dormitories, transitional housing and supported flats. In Athens there are 8 such centres/ facilities, in Piraeus there are 6 and in the rest of Greece there are 6 more. In addition to the above, approximately 110 buildings throughout Greece operate as cold shelters and are available for emergency accommodation, if the relevant permission is granted by the relevant Municipality and depending on the actual needs.
The ESTIA programme for the accommodation of vulnerable asylum seekers in rented apartments and the HELIOS programme that subsidises rental housing for beneficiaries of international protection in combination with other integration services.
There is significant criticism regarding the ESTIA programme, as it’s not linked to integration programmes and policies, and that combined with the fact that people’s accommodation is mandatorily terminated only a month after the asylum decision is served, without necessarily ensuring immediate access to HELIOS, certainly intensifies housing insecurity 4 and in the vast majority of cases leads beneficiaries of international protection to homelessness.
According to recent announcements, there are plans to limit and eventually terminate the ESTIA programme by the end of 2022. At the same time, the HELIOS programme only offers financial support as rent subsidies for a short period of time and the eligibility criteria it has are quite strict.
There has been extensive academic research on the residential, urban and town planning development of Athens. Historically, the production mechanisms of housing stock in Greece and especially in Athens (with arbitrary building, the excessive land-for-flats practice, the fragmented and socially diffused property ownership and the absence of coherent housing social policies) have been evolving alongside the absence of a central and long-term urban planning design, with the latter often following the city’s expansion. 4
This kind of urban development of the city, on the one hand, created numerous problems (e.g. dense building, lack of urban infrastructure, insufficient public spaces per neighbourhood, etc.) but, at the same time, it also had some positive aspects that are still relevant today: it created multifunctional and lively neighbourhoods, with a mixture of land uses and activities, and led to housing of different social groups, thus avoiding the intense social-spatial segregation that prevailed in other cities around the world. 5
Those aspects are also linked to the relative “resistance” that Athens has shown (at least until recently) to gentrification trends, in comparison to the ways in which such trends have evolved and affected other cities internationally. 6
Such examples of urban interventions, implemented at a time of housing restructuring, can exacerbate problems of access to housing, even if their effects do not seem to be directly related to it.
Although, according to the relevant public bodies’ recent announcements, urban planning projects and interventions are seeking ways to “bring the residents back” to the city centre, on the one hand they seem to disregard the fact that the city centre is still inhabited by numerous residents, and on the other hand they don’t take into account a reality that traces the causes of former residents’ displacement to some of the already implemented policies.
The above mentioned plans and the ways of their implementation, especially those concerning the city centre, gradually bring about its transformation from a multifunctional and socially diverse city centre to a monofunctional, thematic and socially homogenised centre for tourism and recreation only. 7
Some of the characteristic traits that Athens has that until recently stood in the way of gentrification processes, as implemented in cities abroad, may now be under threat: By touristification trends that are underway and are already displacing residents from their neighbourhoods, by the commercialisation and financialisation of the housing stock and the aggressive investment capital activity in the city, and by the current prevailing of interventions that prioritise the attraction of investment and visitors (e.g. tourists, silver tourism, digital nomads, etc.) with an almost complete disregard for the needs of everyday life and the issues that current residents have to face. Such processes intensify existing inequalities and exclusions, not only in the field of housing but also on an overall city level.