The Political Economy of Rental Housing

A rapidly growing literature examines how economic threat and status anxiety affect support for anti-establishment and populist parties. The most prominent source of anxiety in existing work is occupational change and the increasingly unequal distribution of labor income. In this article, we extend the focus beyond the labor market by studying how changes in urban development and rent price appreciation affects political behavior. We examine the case of Germany, the country with the highest share of rental housing in the European Union, where half of the population is exposed to a steadily tightening rental market. Combining individual panel data with a longitudinal data set on the cost and quality of rental housing at the postcode level, we study how rental market risk, conceptualized as local rent price appreciation that poses the imminent threat of increasing individuals’ costs of living, affects party preferences. Two-way fixed effects analyses demonstrate that rising rent levels increase support for radical right parties, in particular among long-term residents with low and moderate household incomes. Our results suggest that urban development, not unlike structural changes in the labor market, represents a serious threat to tenants’ social status, which may result in a increasing appeal of political promises to “turn back the clock”.