Housing Crisis in the Czech Republic: Why High Housing Costs Are Driving Families and Young People into Poverty

Poverty Is Not Driven by Wages, but by the Housing Market

In the Czech Republic, poverty is no longer primarily linked to low incomes, but to the high cost and limited availability of housing. This is the key conclusion of an analysis presented by the Platforma pro sociální bydlení (Platform for Social Housing), which challenges a widespread assumption in public debate. According to experts, wage growth over the past ten years has not been sufficient to offset the surge in housing prices and rental costs, especially in major cities. As a result, a growing number of families, despite working full time, are falling below the poverty line after paying their rent.

House Prices and Rents Rising Faster Than Incomes

A comparison between 2014 and today reveals an increasingly pronounced imbalance.

• Median net income per capita has risen by around 40%, but apartment prices in Prague and surrounding areas have increased by approximately 80%.
• Even more dramatic is the trend in rental prices, which have grown by nearly two and a half times over the same period.

This gap has made access to housing increasingly difficult, particularly for young couples and families with children. The rise in the total number of households, from 4.38 million to 4.81 million in ten years, has further intensified pressure on housing demand.

Rent and Poverty Risk: The Most Affected Groups

The data show a clear deterioration in living conditions for renters.

• In 2019, poverty after housing costs threatened about one third of households with a full-time job;
• last year, the figure rose to nearly half.
• Among single mothers, the situation is even more severe, with the share increasing from 43% to 52%.
• By contrast, housing-related poverty among older people has declined thanks to pension indexation.

This highlights a strong generational divide: the burden of the housing crisis falls primarily on young people and working-age families.

Young People and Families Increasingly Far from Home Ownership

The transformation of the housing market is also evident in the decline of home ownership. In Prague and Brno, in 2014 around 80% of families with children under the age of ten owned their homes; today that figure has been cut in half. At the same time, the share of families renting has almost doubled. Among people in their thirties living in large cities, more than half now rent, a sharp increase compared to ten years ago. In smaller towns the situation is slightly different, but here too the trend points to more renters and growing housing insecurity.

Ineffective Policies and Proposals to Overcome the Crisis

According to the analysis, public policies implemented so far have failed to address the housing shortage. Over the past two decades, the state has spent hundreds of billions of koruna on indirect subsidies, such as building savings schemes and mortgage tax deductions, without achieving structural results. Experts propose abolishing these tax breaks and redirecting resources toward the construction of municipal and affordable housing. Other recommendations include

• regulating short-term rentals,
• ensuring more stable rental contracts,
• and adjusting housing benefits based on real market prices.

Without a decisive change in direction, the authors warn, the housing crisis will continue to be the main driver of poverty in the Czech Republic.