In recent years, numerous debates and discussions have revolved around the topic of the ‘housing crisis’ –– all aimed at finding potential solutions. ‘Having a roof over your head’  has always been considered as  the basis for anyone to thrive and survive. The evolving needs of future generations, coupled with increased mobility, might have triggered people to revisit their definitions of ‘home’.  The importance of having your space and place for living was amplified even further during COVID. The pandemic blurred the boundaries between bedroom and campus, living room and  office, and kitchen and. 

‍

Housing crisis: here to stay

Unfortunately our data and experience in the mid- to long-term rental market signposts  that the housing crisis is here to stay. In 2020, as an unprecedented pandemic stirred the world, we saw an unusual downtrend of rent prices in major European cities for all property types (furnished apartments, studios and single rooms), and rent of single rooms in Q2 of 2021 recorded their lowest rates since 2015. 

However, as mobility is normalizing for both students, young professionals, and tourists alike, shortages in rental accommodation have become painfully evident once again, as you can find in the recent International Rent Index. In response, some countries and cities have experimented with drastic rent caps, some introduced policy changes and others stopped promoting themselves as destinations for talent. However, such short-term interventions are not sustainable and their real impact is questionable. .The rental market requires a stronger, long-term vision to secure a ‘Triple A’ rating. 

‍

Triple A: Availability, Affordability and Accessibility

Lack of supply is a dominant factor in the lower price segmentswhich are particularly sought after by students and young professionals. While some municipalities are deploying measures to keep rents from rising even further, they often overlook the fundamental problem:  the lack of supply. Many government initiatives  leverage tighter control over the existing domestic real estate sector instead of encouraging the much-needed development of newly-built accommodation. These measures may ease affordability issues in the short-term, but they can be counterproductive in the long-term by adding risk to residential investment while failing to add more accommodations to balance overall supply and demand. 

We see availability and affordability as vital necessities for the survival of future generations.  They are the engine and fuel that will lay the foundation for a more sustainable rental ecosystem. Then comes accessibility, which touches upon a wider range of factors beyond the financial: accessibility to choices, transparent information, infrastructure, education, jobs, culture, unique neighbourhoods, and welcoming communities, to name a few. These serve as key ingredients that enable both future generations and the cities they inhabit to prosper. 

‍

‍

How we can achieve ‘Triple A’ Rating?

In the short-term, there are plenty of opportunities  to transform vacant commercial properties into available, affordable, and accessible residential properties in and around cities. This not only results in more accommodation, but also reduces vacancy. In addition, we urge policymakers to take immediate action to prevent the residential housing stock from returning to the short-term holiday rental industry. This will not only contribute to more balance in supply and demand as we saw during the peak of the pandemic last year, but can also become the backbone of a unique neighbourhood that can only be created by active residents, not visitors. 

In the long term, cities need to be forward-looking when considering infrastructure. Communities that are currently less accessible would flourish if city centers and regional public transportation links are generally improved. Investors can look into the long-term social profit of building vibrant neighbourhoods, rather than only focusing on short-term yields. Universities, employers, and operators can work together in creating welcoming communities. We also take our role seriously: helping people find housing anywhere through our high-tech solutions.

The ‘Triple A Rating’ described in this article,  sits in the context of the rental market. It by no means refers to a bond credit rating, even though there are some similarities: long-term outlook, low risk of failure, and highest credibility. However, in order to achieve a ‘Triple A Rating’, it is crucial that all the stakeholders step up their game. Whether you are a municipality, investor, developer, operator, technology provider, university and/or employer, we all need to take ownership of the roles we play as we dive into the complexity of the problem to come up with real solutions.

‍