As someone working towards financial independence, I regularly review my expenses and look for ways to reduce them without sacrificing my quality of life, especially the recurring ones. Sometimes I switch to a cheaper internet provider during Black Friday, or find ways to lower my electricity bill.

But there’s one expense that takes up a large portion of my monthly budget that I can’t control: my rent. I’m sure I’m not the only one in this situation. A common rule is that you shouldn’t spend more than a third of your salary on rent. I believe this applies to most of you reading this. Unfortunately, for some people, rent can take up half of their salary.

I live in an apartment owned by a company that has more than 3.000 flats in Hamburg. Their business model is simple: instead of building new homes, they buy old flats in popular neighborhoods, renovate them, and raise the rent. Even though there are some rent control rules in Hamburg, there’s not much protection when it comes to rent hikes between tenants after a renovation, even if I’m paying 50% more than the average rent in my neighborhood.

Some might ask why I don’t just move. Well, when you’re trying to rent a place and there’s a long line of people applying, it can take anywhere from three months to even a couple of years to find something that works. Others might suggest moving to a different city, but that’s not an easy choice if you enjoy your life where you are and have friends around you. The only remaining option, then, is to buy a property.

When looking at homeownership rates in OECD countries, Germany stands out for having a much lower rate compared to others. In fact, only 41.8% of Germans own their homes, and in some areas, this rate drops even further to just 20.1%.

One reason for this lower homeownership rate could be cultural. Germans generally have a strong aversion to taking on debt. The word for debt in German, “Schuld,” also translates to “guilt,” which suggests that borrowing money might be seen as something undesirable or morally wrong in the culture. This perception may explain why many Germans shy away from taking out mortgages, especially considering the long repayment periods, which can stretch up to 30 years.

Another factor influencing lower homeownership rates, particularly in cities like Hamburg, could be the city’s historical role as a major port. In the past, sailors with disposable income often bought property because they spent so much of their time at sea. Additionally, Hamburg has a large number of wealthy residents who view homeownership as a smart investment. This leaves fewer opportunities for the average person to buy a home.

Of course, these are just theories, but the fact remains that for many Germans, owning a home is not a viable option for reducing long-term expenses. This brings me to consider alternative solutions where the government could play a role in changing the current situation and making homeownership more accessible for a larger portion of the population.

While homeownership rates are relatively low in Germany, there are other countries where homeownership rates are high, and some even offer near-“free” opportunities for citizens to own homes. These examples show how governments can design policies that promote homeownership and economic stability.

Singapore

Despite its small size—just 700 square kilometers—Singapore has become an economic powerhouse, largely due to its strategic government policies. With a population of 6 million, giving land directly to citizens isn’t feasible, but the government has successfully implemented policies to encourage homeownership.

The Housing Development Board (HDB) plays a central role in this success. It builds affordable homes and offers subsidies, low-interest mortgages, and financial support to cover any deficits. Additionally, Singapore’s mandatory savings system, called the Central Provident Fund (CPF), helps citizens save for home purchases. Policies like land value capture ensure that land prices remain stable, even though land is limited.

Thanks to these policies, 90% of Singaporeans own their homes today, which stands as a powerful testament to the effectiveness of these government strategies in fostering personal wealth, economic growth, and social stability.

Italy

In several small towns across Italy, vacant homes are being sold for just €1 as part of an initiative designed to revitalize rural areas that have experienced population decline. This program aims to attract new homeowners, stimulate local economies, and preserve Italy’s rich cultural heritage. However, the catch is that these homes typically require substantial renovations, with costs ranging from €20,000 to €50,000. Buyers must submit renovation plans within one year of purchase and complete the renovations within three years. Additionally, there are legal fees, renovation guarantees, and other specific requirements that buyers must meet.

While Singapore and Italy offer interesting examples of increasing homeownership, their solutions are not universally applicable. Singapore’s success is partially due to its smaller population and efficient use of limited land, which makes its model less adaptable to larger countries with different demographics. Italy’s program, while innovative, may not suit individuals who are unwilling to invest in substantial renovations or prefer urban living over rura