Earlier quoted context omitted.
No, rent is about supply and demand. What people can afford -- how much money they have -- is a component of demand, but supply also matters. If you look at countries that restrict supply less than the US, you'll notice that rent doesn't go to such high extremes in booming cities. For example, in Germany, the most expensive cities, the ones that have been booming, have average rents that are around 40-50% higher than…
Agreed on supply. Might want to look at the 75% of household disposable income or exclude non-workers. Only the best earners get to live in the city. Germany is a relatively equal country. A worker in the capital doesn't get double salary as the same position in the countryside. In fact there is hardly anybody who earns triple as of anybody else in the country. The US is extremely unequal. A position in NYC can pay n…
Bullshit. I live in Germany, there's somewhat less income inequality than the US, but this is a gross exaggeration. A programmer in Munich easily earns triple or more than what someone gets at a random McJob like at Starbucks, also in Munich.
The bigger reason for why German rents are lower is simply that they allow for way more housing supply. In the US, even in major cities it's common to have wide swathes of land zoned for mandatory single family homes on large lots. In contrast, Germany doesn't have any such zoning in the entire country. You're always allowed to make at least some level of multi-family housing.