Radical interventions to halt the housing crisis and the uncontrolled rental surge that is now strangling Greek household incomes are proposed in a new study by diaNEOsis, opening the discussion even for rent controls. According to the analysis, the explosive rise in rents is not a temporary phenomenon, but the result of accumulated distortions in the housing market: limited supply, increased demand in major urban centers, extensive use of properties for short-term rentals, and policies that for years favored ownership over rental. The result is that an increasingly larger portion of disposable income is directed to housing, intensifying social inequalities.
diaNEOsis: Greece ranks worst in Europe for housing costs
In Europe, Greece is in the worst position as Greeks spend on average 35.5% of their disposable income on housing expenses (rent, mortgages, taxes and energy costs) – a percentage almost double the European average (19.2%). The excessive burden particularly affects renters, young households and vulnerable social groups.
diaNEOsis advocates examining a flexible rent control framework, aimed at avoiding sudden increases in areas where the housing problem is particularly acute. The proposal does not involve horizontal price “freezes,” but mechanisms that would operate complementary to the market, taking into account local conditions and the need to maintain incentives for property owners.
According to the research, a modern rent control framework cannot ignore the need to protect property owners. Instead, it proposes a combination of measures that would balance the interests of landlords and tenants. Indicative is the proposal for establishing a Rental Insurance Fund, which would compensate owners in cases of payment defaults, damages or legal expenses.
The Fund could be financed by rental income tax itself, thus reducing the risk of long-term leasing. Similar systems already operate in countries like Canada, where the state intervenes to ensure a form of “fair social pricing” of housing, without discouraging the supply of rental properties.
The research notes that, despite the existence of housing allowances and rent rebates, support for tenants often remains insufficient and disconnected from the actual cost of housing. A new system could link the allowance amount to the percentage of income spent on rent. However, the existence of undeclared or “shadow” incomes makes accurate targeting difficult.
For this reason, it proposes establishing minimum income presumptions, based on objective indicators such as real estate or deposits, so that allowances are directed more fairly and effectively. The completion of digitization of the country’s ownership and housing map is considered crucial, so the state knows what properties exist, where and under what terms they are utilized.
Empty homes, short-term rentals and Golden Visa
Activating thousands of empty homes constitutes another critical axis. Programs like “Renovate – Rent” are considered useful but insufficient, as they are not linked to commitments for affordable rents. diaNEOsis proposes that future subsidies be accompanied by maximum rental limits and minimum contract duration, as well as tax reliefs for those offering homes at lower prices, following the models of France and Spain.
On the short-term rental front, the research emphasizes the need for more targeted and geographically differentiated interventions. Maximum rental day limits, municipal quotas, increased fees in saturated areas and possible tax differentiation can reduce pressure on the long-term market without “demonizing” the sharing economy.
Similarly, for the Golden Visa, further restriction of its connection to housing purchases is proposed, even complete exclusion of residential properties, as Portugal did. Investment interest could be directed to new constructions, renovations of non-residential buildings or social housing schemes with public sector participation.
Special mention is made of student and youth housing, where the lack of affordable options translates into immediate financial burden for families. Despite PPPs for new student dormitories, diaNEOsis considers further strengthening of infrastructure and subsidies necessary.
In parallel, a decentralization strategy is proposed, with incentives for remote work, strengthening local health and education services and tax reliefs for businesses that move operations outside Athens. Reducing urban over-concentration could serve as a relief valve for the housing market.
The diaNEOsis research concludes that the housing crisis cannot be addressed with piecemeal measures. A new institutional framework for social housing, better utilization of inactive housing stock, demand regulation and simultaneous supply enhancement are required. Rent control, with social and economic counterbalances, is not presented as a panacea, but as one of the tools that the State must now seriously consider.
