The Rent Plague: How Million-Person Cities Squeeze the Middle Class
In Lagos, 60% of income goes to rent. Amsterdam is following. This isn't economy. It's extraction.
The Rent Plague: How Million-Person Cities Squeeze the Middle Class
Rent above thirty percent isn't living. It's transferring.
I sat with someone from Lagos. Investment broker, good earner, completely reasonable person. He said rent in Lekki, the good part, ate at least sixty percent of his net income. Sometimes seventy. You pay for a house, you eat from it, you have nothing left.
This isn't economy. This is extraction. The building owner sits in Hong Kong or Rotterdam. He put money in it once, and now it's being earned for him by tenants. The productivity of those living in that house doesn't go to their families. It goes to shareholders.
Amsterdam is watching the same things happen. A junior lawyer pays fourteen hundred euros for a rental room in Amsterdam-West. Two lawyers together, a wedding gift for the down payment, and suddenly you're in the same position as the Lagos broker.
This crushes the system. If sixty percent of your money goes to rent, you can't save. You can't invest. You can't experiment. You're bound to the existing system. You're not free.
And this is where real estate becomes a trap instead of an investment. As an owner, you build wealth. As a renter, you build someone else's wealth. This shouldn't be this way. Rent should be temporary, not a generational problem.
With Florian, I see the other side of this story. Houses we own and rent out, those generate income. The income isn't huge, but it's consistent. And it can grow. The tenants pay the mortgage. We wait for the house to appreciate.
This isn't mean. This is economy. Those who understand this system win. Those waiting for it to be fair lose.
The solution for Lagos isn't more income. The solution is cheaper houses. The solution for Amsterdam is the same. More supply, lower rents, houses as homes again, not investments.
Until then: be careful with rent above twenty percent. And try to become a renter who knows you're losing the system.
Sources: Numbeo Housing Index (2024); Lagos Metropolitan Development and Governance Authority, Housing Report (2023)
Source: Numbeo Housing Index, Global Rent Reports (2024)