Brussels may become inaccessible to many - only to neighbors, Airbnb or rich people

Financialization of the real estate sector is gaining momentum in the Belgian capital Brussels. Problems such as the inaccessibility of central areas for the middle class and the focus on coliving companies and the wealthy are already familiar to other European capitals such as Lisbon and Barcelona. The burgomaster of the commune of St. Gilles, Jean Spinett (PS), worries about this disturbing phenomenon: "Our St. Gilles is becoming an object of financial investment rather than a living space".

"It's not about classic real estate now, but about financial intermediaries financed by pension funds or investment groups investing in Brussels real estate," says Jean Spinett.

Saint-Gilles has been facing the gentrification process for several years. The area used to be popular, but now the average house price here is €569,000. This is reflected in rental prices as well, according to the Federia 2023 Rental Barometer. The average cost of renting an apartment in Saint-Gilles is €1,144 per month, making it the seventh most expensive neighborhood in Brussels, far behind Voluve-Saint-Pierre (€1,371) and Voluve-Saint-Lambert (€1,275). But St-Gilles, where the average rent was just €977 in 2018, is one of the areas with the most impressive price growth.

Jean Spinett believes St-Gilles is a victim of its own success. He points to several reasons for concern. First of all, these are practical problems. "Not long ago, a woman struggled to find an apartment on Theodor Verhaeghen Street for 800 euros with no utilities. I am very concerned about this growing phenomenon," he says.

In addition, Jean Spinett has ideological concerns. He cites the work of Mathieu Van Kriekengen (a lecturer in urban studies at ULB), who criticized the actions of former burgomaster Charles Piquet. "The charges of gentrification that have been brought against Charles Picquet are unfair. With Charles, we didn't work on gentrification, but on the renovation of neighborhoods," says Jean Spinette. Nevertheless, this author rightly speaks of the phenomenon of rent capture.

The financial difficulties facing St. Gilles are several. The Commune has already taken steps to save its finances by raising taxes on owners, increasing the property tax rate. "We are trying to regulate the real estate market at the commune level with limited tools, but it is still light regulation," says Jean Spinett.

The utility has also taken up the issue of shared accommodation such as co-working spaces, where the rent includes services such as cleaning, internet and sometimes breakfasts.

Jan Spinett believes that companies like Cohabs are a perfect example of the current financialization of real estate. "These companies have commercial engineers who get funding from pension funds. They buy property, subdivide it, and renovate it without the need for a building permit. Their rooms are then rented out at a price equivalent to what renters paid recently in St. Gilles for apartment rent. This system is clearly making a difference in neighborhoods. We now have houses that were formerly occupied by a few families, and now they are inhabited by new residents paying 800 or 900 euros per room. They do not contribute to communal finances because they are often not registered with the commune. I hope that a regional co-housing regulation will be introduced soon," he says.

The solution to rising rental prices may also involve setting limits. Jean Spinett believes such regulation is "necessary" to prevent rental prices from rising further. The Brussels-based Socialist Party plans to make it a campaign theme for regional elections in 2024.