Introduction
Housing prices and rents have been rising across Western Europe in recent years (Ansell, Reference Ansell2019; Eurostat, 2024). In Germany, for instance, rental prices in cities have risen sharply since 2010 (Baldenius et al., Reference Baldenius, Kohl and Schularick2020; Cohen, Reference Cohen2023), resulting in increasingly tense urban housing markets and political discussions about ensuring affordable housing.
Political science research has increasingly considered housing and housing policies as important determinants of political attitudes and behavior (e.g., Ansell, Reference Ansell2014, Reference Ansell2019; Larsen et al., Reference Larsen, Hjorth, Dinesen and Sønderskov2019; Johnston and Kurzer, Reference Johnston and Kurzer2020; Brouwer and Trounstine, Reference Brouwer and Trounstine2024). However, most of these studies are characterized by a strong focus on housing prices and homeownership and a disregard for the position of renters. Only recently has political science research also focused on the role of rental markets and prices for renters’ political attitudes and behavior (Held and Patana, Reference Held and Patana2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025; Cohen et al., Reference Cohen, Stroppe, Jünger, Schoen and Weßels2024; Reisenbichler and Koenig, Reference Reisenbichler and Koenig2024). This research has largely focused on the effects of rental prices on national party preferences (Cohen, Reference Cohen2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025) and housing policy preferences (Marble and Nall, Reference Marble and Nall2021; Reisenbichler and Koenig, Reference Reisenbichler and Koenig2024). However, little is known about how rental prices influence renters’ more general political attitudes, or how these effects differ locally.
This paper addresses this gap by examining the impact of local rental prices on local political attitudes of renters. I conceptualize rental prices as a local contextual characteristic because they vary considerably depending on the area in which an individual lives. Moreover, housing policy decisions are often made and/or implemented at the local level (Egner and Kayser, Reference Egner and Kayser2023). Local public administrations can thus be seen as agents of public service provision also in the housing policy area. Consistent with performance and economic voting theory (e.g., Lewis-Beck and Stegmaier, Reference Lewis-Beck, Stegmaier, Congleton, Grofman and Voigt2019; Stiers, Reference Stiers2022), I argue that higher levels of local rental prices lead to lower satisfaction levels with the local public administration among renters. In this study, I explicitly analyze the contexts most affected by high rental prices and the increasing scarcity of affordable housing: densely populated urban areas (Favilukis et al., Reference Favilukis, Mabille and van Nieuwerburgh2023; BBSR, 2024).
Furthermore, I investigate how additional factors shaping the local context influence the relationship between rental prices and satisfaction with the local public administration. In this regard, previous research has underlined the political consequences of affordable rental housing availability (e.g., Ansell and Cansunar, Reference Ansell and Cansunar2021; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025), public service provision (e.g., Ziller and Andreß, Reference Ziller and Andreß2022; Stroppe, Reference Stroppe2023), and cultural aspects such as threat perceptions attributed to immigration (e.g., Ansell et al., Reference Ansell, Hjorth, Nyrup and Larsen2022; Held and Patana, Reference Held and Patana2023). Based on these insights, this paper explores whether the assumed effect of high rental prices is diluted by these factors.
To empirically assess the influence of local rental prices on satisfaction with the local public administration, this paper scrutinizes the German case, where the housing market is characterized by low homeownership rates and a higher proportion of renters, particularly in cities (Ansell, Reference Ansell2019). Furthermore, Germany has experienced substantial increases in rental prices since 2010, making it a suitable case to study the consequences of such price increases on satisfaction with the local public administration among renters. This case study can provide valuable insights into the relationship between housing and politics in housing markets with low homeownership rates and a strong rental dependence – a situation that also applies to other German-speaking countries in Central Europe (Schwartz and Seabrooke, Reference Schwartz and Seabrooke2008).
In terms of data, I use the first wave of the Life in the Neighborhood (LiV, German: “Leben im Viertel”) survey, a large-scale survey among 40 neighborhoods in ten German cities fielded in autumn 2022. Using this unique survey data has several advantages. The dataset includes a comparatively large number of observations per neighborhood, enabling a robust analysis of differences between them. Additionally, the LiV data allows detailed information on local rental prices at the zip code level to be included, enabling an in-depth investigation of the potential effects of rising local rental prices.
In this vein, the contribution of this paper is threefold. First, it examines the relationship between rental prices and local political satisfaction for a case that has been largely overlooked in the pertinent literature so far: cities with a high share of renters. In doing so, it also advances research on the political consequences of housing by considering the influence of rental prices on the political attitudes of renters at the local level. Second, it uses geo-coded survey data covering a large number of heterogeneous neighborhoods, with different levels of rental prices and degrees of gentrification. The comparatively large number of observations per neighborhood increases the reliability and generalizability of the analysis. Third, this specific empirical approach allows for the investigation of additional local characteristics (housing availability, public service provision, cultural threat perceptions), which may influence the relationship between high rental prices and satisfaction with the local public administration.
The results of the multilevel regressions show a negative relationship between high levels of rental prices and satisfaction with the local public administration among renters. Moreover, the study’s findings suggest that rental prices drive this relationship, as their negative effect is not offset by an increased supply of rental housing or the provision of public services. Apart from that, the empirical analysis points to the significance of cultural threat perceptions triggered by a higher number of foreign-born residents in a neighborhood. Notably, the negative impact of rental prices was observed exclusively in areas with a higher concentration of foreign-born residents. These results emphasize the far-reaching consequences of high rental prices on satisfaction with the local public administration among renters, highlighting the need for effective policies to ensure affordable rental prices in urban areas.
Theoretical background
The local public administration is understood to be an agent of the (local) government responsible for providing a wide range of public services. These include administrative services (e.g., passport and electoral services), energy and water supply, infrastructure, social services (child and elderly care, education), public transport, and cultural and leisure facilities (Narbón-Perpiñá and De Witte, Reference Narbón-Perpiñá and De Witte2018a). However, the quality and efficiency of public service provision by local public administrations can vary (Borge et al., Reference Borge, Falch and Tovmo2008; Narbón-Perpiñá and De Witte, Reference Narbón-Perpiñá and De Witte2018b; Ziller and Andreß, Reference Ziller and Andreß2022), and citizens may be more or less satisfied with this service provision. Satisfaction with the performance of local public administrations has far-reaching consequences, as it influences trust in government (Van de Walle and Bouckaert, Reference Van de Walle and Bouckaert2003; Christensen and Lægreid, Reference Christensen and Lægreid2005). Recent research in this area has highlighted that a lack of local public services reduces political trust (Stroppe, Reference Stroppe2023) and increases support for right-wing populist parties (Nyholt, Reference Nyholt2024).
Local political actors are also responsible for housing policy. In Germany, the local level mainly decides on housing policy and also has a strong influence on the implementation of housing policies decided at a higher level (Egner and Kayser, Reference Egner and Kayser2023). German cities dispose of a variety of instruments to influence the local housing market through urban planning and development, as well as financial and informational instruments (Egner and Kayser, Reference Egner and Kayser2023). Hence, the provision of affordable housing can be considered the responsibility of the local public administration. Higher rental prices threaten the availability of affordable housing and are therefore suspected to influence renters’ satisfaction with the local public administration. Performance and economic voting theory can explain the relationship between higher rental prices and the local public administration.
How high rental prices influence satisfaction with the local public administration among renters
Rental prices are considered a contextual characteristic as they vary considerably depending on the area in which an individual lives. While house prices are considered an economic asset for homeowners (Ansell, Reference Ansell2014), rental prices are a cost for renters that they must pay to have accommodation. Therefore, higher levels of rental prices imply higher costs. This already indicates that rental prices should affect homeowners and renters differently. Homeowners are likely to profit from higher rental prices, while renters may perceive these higher costs as an economic loss and a deterioration of their economic situation. This could also have political consequences, as individuals may attribute this economic loss to political actors and be dissatisfied with their performance (Hummler and Vierus, Reference Hummler and Vierus2025). By explicitly focusing on the perspective of renters, this study adds to the still small research on the role of housing prices for this specific group (see, e.g., Cohen et al., Reference Cohen, Stroppe, Jünger, Schoen and Weßels2024; Reisenbichler and Koenig, Reference Reisenbichler and Koenig2024).
Performance voting theory provides explanations for how high rental prices influence individuals’ satisfaction with the local public administration. Theoretically, performance voting posits that individuals base their voting decisions on evaluations of the government’s performance (see, e.g., de Vries and Giger, Reference De Vries and Giger2014; Stiers, Reference Stiers2022). Political satisfaction plays a crucial role in this regard; satisfied individuals reward the government with their vote, while dissatisfied individuals punish the incumbent (Ferejohn, Reference Ferejohn1986). In this sense, performance evaluations influence the formation of individual political attitudes and enable individuals to hold incumbents accountable (Przeworski et al., Reference Przeworski, Stokes and Manin1999).
One particularly prominent strand of research in this regard is economic voting theory. According to this approach, individuals base their political attitudes and voting decisions on the evaluation of the economic performance of the incumbent government (de Vries and Giger, Reference De Vries and Giger2014; Lewis-Beck and Stegmaier, Reference Lewis-Beck, Stegmaier, Congleton, Grofman and Voigt2019). One way in which individuals evaluate the economic performance is through egotropic considerations, which focus on the individual’s economic situation. Those individuals experiencing an economic loss or a deterioration of their economic situation are assumed to attribute this situation to the public authorities, blaming them for their worsened situation and showing lower levels of satisfaction (Johnston and Pattie, Reference Johnston and Pattie2002; Lewis-Beck and Stegmaier, Reference Lewis-Beck, Stegmaier, Congleton, Grofman and Voigt2019).
I expect such egotropic considerations to become relevant in performance evaluations regarding rental prices in two distinct, yet related, ways: high rental prices as an economic loss and as a sign of gentrification. The expectation regarding rental prices as an economic loss is straightforward. Higher rental prices reduce the disposable income of renters living in the respective local area. Renters may perceive this as a worsening of their individual economic situation, for which they blame the local public administration, as being the responsible actor for housing policy. In turn, they may express lower levels of satisfaction.
In addition to a personal economic loss, rising rental prices, especially in big cities, can be interpreted as a sign of increasing gentrification.Footnote 1 While high-income renters and homeowners may favor such processes because they appreciate the potential upgrading of their neighborhood and can afford higher living costs, low-income renters may feel threatened by such developments and fear losing or being forced to leave their current housing (Hankinson, Reference Hankinson2018; Cohen, Reference Cohen2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025). Overall, gentrification processes increase economic pressures and anxiety (Huber and Wolkenstein, Reference Huber and Wolkenstein2018). Renters especially perceive gentrification processes as a threat that increases residential insecurity (DeLuca and Rosen, Reference DeLuca and Rosen2022). Consequently, renters may blame the local public administration for this economically threatening situation and react with lower levels of satisfaction.
While most of the literature on performance and economic voting has focused on the national level, there is also growing evidence of the importance of performance-based evaluations of public authorities at the local level. Previous research demonstrates strong links between local economic conditions and political attitudes and behavior (Larsen et al., Reference Larsen, Hjorth, Dinesen and Sønderskov2019; Park and Reeves, Reference Park and Reeves2020; Stiers and Hooghe, Reference Stiers and Hooghe2023). In particular, De Benedictis-Kessner and Warshaw (Reference Benedictis-Kessner De and Christopher2020) show that the incumbent party is held accountable for the local economic performance at all levels of government, most likely because individuals value increases in local wealth and reward the incumbent party for this in national and subnational elections. Anderson et al. (Reference Anderson, Lucas and McGregor2024) also show for the Canadian case that it is the local level, i.e., city councilors, that is held accountable for housing market performance.
Based on these theoretical considerations, I assume that higher rental prices lead to lower levels of satisfaction with the local public administration.
H: In neighborhoods with high levels of rental prices, renters show lower levels of satisfaction with the local public administration.
Additional local characteristics potentially influencing satisfaction with the local public administration
Apart from rental prices, other simultaneous developments in the housing market, as well as other local characteristics such as the provision of public services, may influence individuals’ evaluation of the local public administration. Hence, such factors may dilute the effect of high levels of rental prices. Previous research on the political consequences of housing policies and on performance evaluations of the local public administration has particularly highlighted the role of the availability of affordable rental housing (e.g., Ansell and Cansunar, Reference Ansell and Cansunar2021; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025), public service provision (e.g., Ziller and Andreß, Reference Ziller and Andreß2022; Stroppe, Reference Stroppe2023), and cultural aspects such as threat perceptions attributed to immigration (e.g., Ansell et al., Reference Ansell, Hjorth, Nyrup and Larsen2022; Held and Patana, Reference Held and Patana2023).
The availability of affordable rental housing
The availability of affordable rental housing might be an additional problem that renters are facing. In parallel with increases in rental prices, affordable housing units become increasingly scarce in cities (Favilukis et al., Reference Favilukis, Mabille and van Nieuwerburgh2023; Rink and Egner, Reference Rink and Egner2022). In Germany, for instance, big cities are facing not only large increases in housing costs but also a growing scarcity of housing. Since 2008, there has been a trend toward an increasing housing shortage across different neighborhood types in big cities (BBSR, 2024). Recent research has demonstrated the extensive political consequences of increasing housing unaffordability in terms of the economic risks posed by rising rent burdens (Ansell and Cansunar, Reference Ansell and Cansunar2021; Held and Patana, Reference Held and Patana2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025).
Thus, renters may be less satisfied with the local public administration, not only because of high rental prices, but also because they struggle to find affordable housing. Therefore, the local housing market may affect satisfaction with the local public administration not through rental prices per se, but through the experience of navigating an increasingly scarce housing market. For instance, even if they are willing to pay a higher rent, individuals may still encounter issues such as spending a long time searching for a housing unit or facing fierce competition with other renters. In fact, previous research has shown that a limited number of housing units available may increase competition for housing among renters (Egner and Grabietz, Reference Egner and Grabietz2018; Molloy et al., Reference Molloy, Nathanson and Paciorek2022). Therefore, the availability of affordable housing should be considered as an influencing factor that potentially strengthens the negative effect of high rental prices on satisfaction with the local public administration.
Public service provision
As previously mentioned, the local public administration is responsible not only for housing policies but also for providing an array of public services, including infrastructure, social services, public transport, as well as cultural and leisure facilities (Narbón-Perpiñá and De Witte, Reference Narbón-Perpiñá and De Witte2018a). Thus, residents are likely to evaluate the performance of the local public administration based not only on its performance in terms of housing policy, but also on its performance in providing public services. Previous studies support this expectation. Specifically, research has shown that a good public service provision can increase social trust (Ziller and Andreß, Reference Ziller and Andreß2022) as well as trust in political institutions (Christensen and Lægreid, Reference Christensen and Lægreid2005). Similarly, the absence or inaccessibility of public services, such as access to public transport, schools, and hospitals, has been shown to negatively affect political trust (Stroppe, Reference Stroppe2023) and support for mainstream political parties (Nyholt, Reference Nyholt2024).
Correspondingly, individuals who are satisfied with public services are expected to be more satisfied with the local public administration. Public service provision and its assessment may become particularly relevant to the relationship between levels of rental prices and satisfaction with the local public administration in two ways. First, public services may directly impact the level of rental prices, because rental prices tend to be higher in more popular neighborhoods with a large number of public services and amenities nearby (Deutz and Held, Reference Deutz and Held2023; BBSR 2024). Second, the availability of public services may influence renters’ evaluation of the performance of the local public administration. Renters living in neighborhoods with more public services, and who are generally more satisfied with them, should also be more satisfied with the local public administration, even if rental prices are high.
Cultural threat perceptions
Previous research on the political consequences of housing issues has pointed to an interaction between cultural and economic factors explaining voting behavior and political attitudes, particularly with regard to support for populist radical right parties (Ansell et al., Reference Ansell, Hjorth, Nyrup and Larsen2022; Held and Patana, Reference Held and Patana2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025). These studies emphasize that high rental prices pose not only an economic threat to renters but also a culturally-driven status threat. In this context, Held and Patana (Reference Held and Patana2023) highlight the role of the cultural framing of rising rental prices — as being caused by increased competition with immigrants and refugees in the housing market — plays in the mobilization of radical right parties. Similarly, Cavaillé and Ferwerda (Reference Cavaillé and Ferwerda2023) provide empirical evidence that the inclusion of immigrants in public housing programs fuels support for radical right parties. This framing is also present in the German context. For instance, the German radical right party Alternative for Germany (AfD) explicitly frames immigration as a cause of increasingly tense housing markets and promotes expelling immigrants as a solution to the housing shortage (Deutscher Bundestag, 2022; Ludwig and Mießner, Reference Ludwig and Mießner2022). These cultural threat perceptions can foster grievances and fuel political dissatisfaction (Gidron and Hall, Reference Gidron and Hall2017; Norris and Inglehart, Reference Norris and Inglehart2019). Along this line of research, one can expect that the negative effect of high rental prices on satisfaction with the local public administration will be stronger in neighborhoods with a higher number of immigrant residents.
The housing market and rental prices in Germany
The analysis of the German case can serve as an example for other Western European countries experiencing rising rental prices in urban areas. In their “varieties of residential capitalism” approach, Schwartz and Seabrooke (Reference Schwartz and Seabrooke2008) classify Germany as a corporatist housing market (like the Netherlands and Denmark). Corporatist housing markets are characterized in particular by a strong market stratification, the recognition of housing as a social right, and low homeownership rates. Indeed, in Germany in 2022, 58% of the households lived in rented dwellings, leaving the homeownership rate at 42%. Especially in cities, the homeownership rate is even lower with, e.g., 16% in Berlin or 32% in Bremen (Destatis, 2024).
During the 1990s and the 2000s, rental prices in Germany were relatively stable (Breidenbach et al., Reference Breidenbach, Eilers and Fries2022). Since 2010, however, rental prices have increased significantly, particularly in German cities and metropolitan areas (Baldenius et al., Reference Baldenius, Kohl and Schularick2020). On average, rental prices in German big cities increased from 7.23€ per m2 in 2010 to 12.01€ per m2 in 2022 (BBSR, 2023).Footnote 2 These rental price increases are also the subject of ongoing public and political debate. In 2015, the German Federal government introduced a tenancy law reform, the so-called “Mietpreisbremse,” to overcome the problem of tight housing markets with rising rents in urban areas. This law allows the federal states to cap rents for new rental contracts in tight housing markets (Breidenbach et al., Reference Breidenbach, Eilers and Fries2022; Baye and Dinger, Reference Baye and Dinger2024).
Apart from the federal states, municipalities are central arenas for housing policy in Germany, and there is considerable variation in housing policy at the local level (Rink and Egner, Reference Rink and Egner2022). For example, in Berlin in 2020, the so-called Berlin rent freeze (“Mietendeckel)”Footnote 3 came into effect. Such local differences are expected to be reflected in varying levels of satisfaction with the local public administration among renters.
High rental prices are also a topic of concern for the German public. Data from the national survey Politbarometer 2022 (Forschungsgruppe Wahlen, Mannheim, Reference Forschungsgruppe Wahlen2023), which coincided with the field period of the LiV survey, shows this. In this survey, around 29% of the respondents named rising costs of living, including housing costs, as the first or second most important problem in Germany. This is also mirrored in data collected by YouGov in autumn 2025, where 94% of the respondents consider rental prices and housing scarcity a (large) problem in German cities (Schmid and Blauth, Reference Schmid and Blauth2025). These results provide evidence that housing and high rental prices are salient issues for the German public.
Empirical analysis
Data
This paper uses data from the first wave of the LiV survey, an original survey conducted in 40 neighborhoods in ten big German cities. Specifically, the analytical sample covers 59 zip code areas in the cities: Berlin, Bochum, Bremen, Cologne, Dresden, Halle (Saale), Karlsruhe, Mainz, Nuremberg, and Stuttgart.Footnote 4 The first wave was conducted in the fall of 2022 in a mixed-mode design (PAPI and CAWI) and surveyed 2,316 respondents. The LiV survey uses a stratified random sample drawn from city registers, which oversamples non-nationals from countries of origin with a predominantly Muslim population (i.e., from Afghanistan, Iran, Iraq, Syria, or Pakistan). For the analyses, I excluded all cases with missing values as well as homeowners, which left me with a sample size of 1,278 respondents.
I enriched the LiV dataset with data on local rental prices (RWI-GEO-RED) provided by the RWI Leibniz Institute for Economic Research (RWI; ImmobilienScout24, 2024). This data is obtained by ImmobilienScout24, which is the largest real estate online platform in Germany. Approximately 50% of all real estate objects offered for sale or rent in Germany are advertised there (Schaffner and Thiel, Reference Schaffner and Thiel2024). Specifically, the platform offers private and commercial owners to advertise their real estate objects for a fee. According to ImmobilienScout24, the platform is used by 19 million people per month for searching, renting, buying, or financing real estate objects (ImmobilienScout24, 2025). It is thus a rich and detailed data source for rental prices, which is also widely known and used by owners and renters in Germany. The RWI-GEO-RED data differentiate between houses and apartments as well as between objects offered for sale and rent. In this paper, I rely on the dataset, which includes apartments offered for rent (RWI; ImmobilienScout24, 2024). This dataset is merged with the LiV data at the zip code level.Footnote 5
Moreover, I merged contextual data provided by the inner-city spatial monitoring IRB 2021 of the German Federal Institute for Research on Building, Urban Affairs, and Spatial Development, and micromFootnote 6 with the LiV dataset to be able to control for further neighborhood characteristics, such as the number of households or the share of unemployment within a zip code area.
Variables
The central dependent variable, satisfaction with the local public administration, is measured by three items asking for respondents’ opinions of the public administration in their community. Specifically, respondents were asked for their agreement on a 5-point Likert-type scale that the public administration in their community addresses the needs of residents, can manage pending tasks well, and that the public services offered are organized efficiently. To account for potential measurement error, I conducted a confirmatory factor analysis and used the saved factor scores as the dependent variable (Fit statistic: CFI = 1.00, RMSEA = 0.00, AIC = 14609.31, BIC = 14660.07, all standardized factor loadings >0.77).
The independent variable is the monthly rent 2022, which indicates the level of the monthly rent in euros per m2 (excluding heating) within one zip code area in the year of the survey. This measure thus captures the average monthly rent in euros per m2 within the respective zip code area, based on all the apartments advertised within these zip code areas on ImmobilienScout24 in the year 2022.Footnote 7 It is therefore a contextual measure that characterizes a zip code area and does not capture the actual monthly rent paid by an individual.
As sociodemographic control variables, I employ gender, age, a categorical measure of education, and a dummy variable for economic activity (1 = economically active, which includes all individuals who are currently earning money). To account for the larger number of immigrants in the sample, I include a categorical measure of migration background and self-reported political knowledge. Since understanding increases in rental prices and their potential consequences in urban areas requires some knowledge of current political discussions in Germany, it is crucial to include this variable.
Furthermore, I consider aspects of the individual living situation that are potentially relevant for the relationship under study. I control whether an individual lives in an apartment, since this study defines monthly rental prices for apartments, and not for houses. As renters living in an apartment are more affected by this type of rental price, it is pivotal to take this information into account. Additionally, I consider the length of stay in neighborhood. As the longer individuals stay in a neighborhood, the more experiences they have with the local public administration; if these experiences are positive, individuals are more likely to show higher levels of satisfaction. Finally, I also consider the overall satisfaction with the neighborhood, measured on an eleven-point scale.
As contextual control variables, I include the number of inhabitants (IRB, 2021) to approximate how many individuals live in that area, the share of unemployed individuals (microm) as a proxy for the overall economic situation in a zip code area, and the number of foreign-born residents (IRB, 2021) to account for ethnic diversity. These variables capture the socio-economic status of a neighborhood, which should also influence self-selection into a specific neighborhood and thus help to address potential selection bias (Sampson, Reference Sampson2012; Gallego et al., Reference Gallego, Buscha, Sturgis and Oberski2016).
Finally, I test for the influence of three additional factors that may shape the relationship between monthly rental prices and satisfaction with the local public administration. The first one is the availability of housing for rent. Therefore, I created the measure apartments available in 2022. Specifically, I counted all advertisements of apartments offered for rent on ImmobilienScout24 in 2022 per zip code area, which I then divided by the number of inhabitants of the respective zip code area. Second, I test for the role of perceived infrastructure to assess the influence of public service provision. The measure is based on an index of six survey items (Cronbach’s alpha = 0.8) that ask for the availability of services and amenities like public transport, medical care facilities, shopping options, and places for leisure and sports activities. Third, to test for the influence of cultural threat perceptions, I use the previously mentioned number of foreign-born residents within a neighborhood provided by the IRB 2021.
Descriptive statistics, a correlation matrix, and the original survey questions of the variables employed can be found in the online Appendix A.
Methods
The analytical strategy of this paper consists of three steps. In the first step, I examine the levels of rental prices and satisfaction with the local public administration descriptively.
In the second step, I test the main hypothesis, which posits a negative relationship between higher levels of monthly rental prices and satisfaction with the local public administration. I conduct several multilevel regression models to account for the spatial clustering of the data. The random effects in these models are specified at the zip code level. Moreover, all models include city fixed effects to control for unobserved heterogeneity across cities (e.g., regional differences concerning inflation). This also controls for potential differences between East and West German cities, as well as for differences between cities that are subject to a federal rent control scheme and those that are not.Footnote 8 Apart from that, all models employ a design weight that balances the different selection probabilities of cities, neighborhoods, and immigrants. To address potential self-selection bias (Cho and Rudolph, Reference Cho and Rudolph2008), I use multilevel models with a comprehensive control strategy for individual and contextual characteristics (Table 1). Robustness checks assess the sensitivity of the results to additional controls and alternative modeling strategies (Appendix C).
Influence of monthly rental prices on satisfaction with the local public administration
Standard errors in parentheses; * p < 0.05, ** p < 0.01, *** p < 0.001.
Design weight applied; City fixed effects in all models included.
All continuous variables in M2 are min-max normalized.
Data Sources: LiV 2022 (Wave 1), RWI, ImmobilienScout24 (2024), IRB 2021, microm.
In the third step, I explore the influence of additional local characteristics. To examine the role of the availability of housing units for rent as well as of perceived infrastructure, I compute a multilevel model including an interaction between the monthly rent and the number of apartments available in 2022 and one including perceived infrastructure, respectively (Table 2). To assess the role of the number of foreigners living in a neighborhood (Table 3), I apply a split-sample approach. Specifically, I run separate multilevel models to test the influence of the monthly rent on satisfaction with the local public administration for neighborhoods with a number of foreign-born residents below and above the median (median = 2,147).
The influence of the availability of apartments for rent and perceived infrastructure
The influence of the number of foreign-born residents in a neighborhood
Results
As mentioned above, German cities have experienced substantial rental price increases since 2010. This is also true for the ten cities included in the LiV survey. Monthly rents for apartments in 2022 in the zip code areas surveyed vary considerably, ranging from 5.76€ to 18.78€ per m2 (Figure 1). Moreover, rental prices for apartments have also increased considerably between 2010 and 2022 in the zip code areas studied (see Figure A1, Appendix A).
Average monthly rental prices in 2022 by zip code area.
Figure 1. Long description
The bar graph compares average monthly rental prices in 2022 by zip code area in Germany. It features horizontal bars representing different zip code areas, with the x-axis labeled with the names of these areas and the y-axis labeled with monthly rental prices in euros per square meter. The graph includes 59 bars, each indicating the rental price for a specific area. The prices range from around 5 euros per square meter to nearly 20 euros per square meter. The graph shows a clear upward trend in rental prices from left to right, with the highest prices observed in areas such as Berlin (Boxhagener Platz) and Stuttgart (Heslach). The color scheme is consistent, with all bars in a single color. The graph highlights the variation in rental prices across different areas, with some areas having significantly higher prices than others. All values are approximated.
Figure 2 illustrates that the dependent variable, satisfaction with the local public administration, also varies considerably across the zip code areas (mean = −0.009). Notably, those zip code areas where rental prices are considerably high, like Berlin (Boxhagener Platz) or Stuttgart (Vogelsang), are among those with the lowest levels of satisfaction with the local public administration. Conversely, zip code areas, where rental prices are comparatively low, are among those with the highest levels of satisfaction with the local public administration (e.g., Berlin Marzahn-Ost).
Satisfaction with the local public administration by zip code area.
Figure 2. Long description
The bar graph compares satisfaction levels with the local public administration across various zip code areas. The graph features horizontal bars, with each bar representing a different zip code area. The x-axis lists the zip code areas, while the y-axis measures satisfaction levels ranging from negative one to one. The bars vary in height, indicating different levels of satisfaction. Some bars extend above the zero line, showing positive satisfaction, while others fall below, indicating negative satisfaction. The color scheme uses blue for the bars. Notable trends include a few areas with significantly higher satisfaction levels and others with notably lower satisfaction. All values are approximated.
To assess how different levels of rental prices affect individuals’ satisfaction with the local public administration systematically, I conduct several multilevel regression analyses. The models in Table 1 test the main hypothesis, stating that in neighborhoods with higher levels of rental prices, renters show lower levels of satisfaction with the local public administration. In M1, the coefficient of monthly rent 2022 is negative and significantly associated with satisfaction with the local public administration, supporting the hypothesis. Gender, age, and being a first-generation immigrantFootnote 9 are positively associated with satisfaction with the local public administration.
To assess the effect size of the monthly rent in 2022, all continuous variables in M2 are min-max normalized. In this model, the normalized coefficient of the monthly rent in 2022 is −0.133. Hence, the satisfaction with the local public administration drops by 0.133 units when the monthly rent changes from its minimum to its maximum – a small but non-negligible effect.
These results suggest a negative association between higher rental prices and satisfaction with the local public administration. To further corroborate this finding, I conduct several robustness analyses (Appendix C). First, I take advantage of the richness of the LiV data in terms of information on the individual living situation. Specifically, I test for the influence of the household composition and the condition of the building in which an individual lives. The composition of the household (measured through the variables single household and the number of children in the household) may influence the negative effect of higher levels of rental prices. While single households usually have to bear the burden of rental prices on their own, they have more flexibility in finding an alternative, potentially more affordable dwelling than households with a larger number of children. Also, households with a larger number of children generally have higher costs of living, so higher rental prices could complicate their situation by reducing the total household income. The condition of the building might influence the potential acceptance of higher rental prices and their impact on the level of satisfaction. For instance, individuals living in a building that is in very good condition might see higher rental prices as more justified than individuals living in a building that is in poor condition, and thus, might be less negatively affected by higher rental prices. However, the inclusion of the additional control variables doesn’t substantially change the negative effect of monthly rent in 2022 (b = −0.0324**, Model MC1, Table C1). Moreover, none of the added control variables have statistically significant coefficients. This further corroborates the negative relationship found between monthly rent in 2022 and satisfaction with the local public administration.
Second, excluding city fixed effects yields results similar to M1, with the level of monthly rent in 2022 still showing a significant negative coefficient (Model MC2, Table C1).
Third, I investigate if the negative association is only present for renters (Models MC3 and MC4 in Table C1). In MC3, which includes renters and homeowners and controls for renting, the coefficient of the monthly rent in 2022 remains negative and statistically significant (b = −0.0316**). In MC4, which includes only homeowners, the coefficient of monthly rent in 2022 remains negative and close to zero (b = −0.000989), but is no longer statistically significant, suggesting that the effect is specific to renters. However, this placebo test should be interpreted cautiously due to the smaller homeowner sample (N = 450), which may limit statistical power. Still, this null effect appears surprising since owning a house in times of high rental prices signifies an economic gain. Thus, it would be plausible that higher rental prices would positively influence satisfaction with the local public administration of homeowners. However, in the LiV survey, homeowners are respondents who indicated living in a home owned by themselves. It does not capture whether they own more housing units, which they could offer for rent and potentially gain from high rental prices. This could explain why we don’t see a positive coefficient for monthly rent in 2022 in MC4.
Fourth, the monthly income is supposed to influence the relationship under study. However, the survey item for household income has a very large number of missing values (about 19% of the sample). Therefore, I replicated M1 employing the categorical income variable based on a smaller sample with N = 1,033 (Table C2, Appendix C). In MC5, all categories of income are negatively associated with satisfaction. Nevertheless, only the coefficients for categories 8, 10, and 11 reach a conventional level of statistical significance (individuals with a monthly household income between 4,000€ and 9,999€), suggesting that higher-income renters are less satisfied with the local public administration.Footnote 10 The coefficient of the level of the monthly rent in 2022 remains negative and statistically significant (b = −0.0267*), but drops in magnitude and significance.
To further assess if the negative effect of monthly rent in 2022 is conditional on household income, MC6 tests for the interacting effects. The coefficients of the interaction terms reveal no systematic pattern: they change from positive to negative, and are only statistically significant for income categories 4 and 5 (individuals with a monthly household income between 1,500€ and 2,499€). Thus, there seems to be no systematic influence of household income on the negative impact of monthly rent. In sum, however, these analyses indicate that the association between monthly rent in 2022 and satisfaction with the local public administration is robust to controlling for income.
Fifth, it may not be the higher level of rental prices, but increases in rental prices over time that matter for the relationship under study. Therefore, I replicate M1 using the change in monthly rent between 2010 and 2022 as the main predictor (Table C3, Appendix C). The results of MC7 point in a similar direction as the original model and yield a negative, statistically significant coefficient of change in monthly rent between 2010 and 2022 (b = −0.0378**). This finding suggests that changes in rental prices over time also shape renters’ political attitudes.
Finally, to examine whether rental prices affect satisfaction only at the local level, I replicate M1 and MC7 using satisfaction with national politics as the outcome (Table C4, Appendix C). Unlike the local models, the level of and changes in rental prices are positively but non-significantly related to satisfaction with national politics (MC8 b = 0.0417; MC9 b = 0.0122). This finding suggests that the negative influence of rising rental prices is indeed specific to the local level. It seems that individuals hold the local public administration accountable for addressing problems of high rental prices, and not the national government. Nevertheless, this finding has to be interpreted with a grain of salt as the survey questions for satisfaction with the local public administration and national politics are quite different, which could influence the relationship with rental prices.
Taken together, I interpret these findings as support for the main hypothesis, stating that, in neighborhoods with higher levels of rental prices, renters show lower levels of satisfaction with the local public administration.
The role of local characteristics potentially influencing satisfaction with the local public administration
To better understand the relationship between rental prices and satisfaction with the local administration and further rule out alternative explanations for lower levels of satisfaction, I examine the role of the availability of housing for rent, the provision of public services, and cultural threat perceptions operationalized as the number of foreigners living in a neighborhood.
First, I test the role of rental housing availability. Descriptively, the number of apartments available for rent in 2022 varies considerably across the zip code areas analyzed (Figure A2, Appendix A). On average, there are 0.05 apartments available per inhabitant (SD = 0.04), ranging from 0.007 apartments per inhabitant in a zip code area in Nuremberg to 0.22 apartments per inhabitant in a zip code area in Dresden. Moreover, the bivariate relationship between the level of rental prices and the availability of rental housing units in 2022 also shows notable variation (Figure A3, Appendix A).
M3 and M4 displayed in Table 2 test for the influence of the apartments available for rent in 2022. Concerning the direct effect, apartments available in 2022 shows a positive coefficient, which, however, does not reach a conventional level of statistical significance. The interaction between monthly rent in 2022 and apartments available in 2022 in M4 is negative but not statistically significant. Thus, a higher number of apartments cannot compensate for the negative effect of higher rental prices.
Second, I investigate the influence of the provision of public services, other than available rental housing units. M5 in Table 2 displays the direct effect of perceived infrastructure. The coefficient is positive and statistically significant, indicating that the perceived availability of public services and infrastructure – including leisure facilities, as well as shopping and health care amenities – is positively related to satisfaction with the local public administration. The coefficient of monthly rent in 2022 remains negative and statistically significant. M6 (Table 2) displays the interaction effect between perceived infrastructure and monthly rent in 2022. The coefficient is negative and not statistically significant. Hence, the negative effect of monthly rent in 2022 is not conditional on the perception of the infrastructure available in a neighborhood. These are important findings, as they show that the negative effect of rental prices cannot be compensated for by the provision of public services, other than affordable rental prices.
Third, I test for the influence of cultural threat perceptions operationalized through the number of foreign-born residents living in a neighborhood. Therefore, I use a split-sample approach. M7 in Table 3 shows the effect of monthly rent in 2022 on satisfaction with the local public administration for neighborhoods with a number of foreign-born residents above the median (median > 2,147). The coefficient of the monthly rent is negative and statistically significant. M8 (Table 3) displays the effect of monthly rent in 2022 for neighborhoods with a number of foreign-born residents below or equal to the median (median <= 2,147). In this model, the coefficient of monthly rent turns positive, but is not statistically significant. Thus, rental prices seem to negatively affect satisfaction with the local public administration only in neighborhoods with above median numbers of foreign-born residents. These results hint at the relevance of cultural threat perceptions induced by a higher number of foreign-born residents in a neighborhood.
In summary, the findings support the main hypothesis: higher levels of rental prices are negatively related to satisfaction with the local public administration. This negative association is neither diluted by a higher number of apartments available for rent nor by the provision of additional public services. Furthermore, the analyses in Table 3 point to the importance of cultural threat perceptions, which indicate that rental prices are negatively associated with satisfaction with the local public administration only in neighborhoods with above median numbers of foreign-born residents.
Conclusion
This paper set out to investigate the influence of rental prices on satisfaction with the local public administration among renters in German big cities. The central argument put forward is that higher levels of rental prices lead to lower levels of satisfaction with the local public administration. Moreover, the paper examined how additional factors shaping the local context influence the relationship between rental prices and satisfaction with the local public administration. In this way, the study extends recent research on the political consequences of rising rental prices (e.g., Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025; Cohen et al., Reference Cohen, Stroppe, Jünger, Schoen and Weßels2024; Reisenbichler and Koenig, Reference Reisenbichler and Koenig2024) by focusing specifically on the local political consequences of high rental prices.
Results from multilevel regressions demonstrate a negative relationship between higher levels of rental prices and satisfaction with the local public administration among renters in German urban areas. These findings align with the predictions of performance and economic voting theory, suggesting that individuals blame political authorities for a deteriorating personal economic situation (Larsen et al., Reference Larsen, Hjorth, Dinesen and Sønderskov2019; Lewis-Beck and Stegmaier, Reference Lewis-Beck, Stegmaier, Congleton, Grofman and Voigt2019). This effect seems to be specific to renters, as well as to satisfaction with the local public administration, as the placebo test with satisfaction with national politics demonstrates (Table C4, Appendix C). These findings suggest that renters actually hold the local government accountable for housing policy and rental prices in particular. To corroborate this finding further, it would be important to survey individuals on which level of government they hold as responsible for housing policies to confirm that this occurs at the local level and not at the national level. Ideally, this kind of survey would include equally large groups of renters and homeowners to allow for a more robust comparison of these two groups.
Additionally, the paper explored the influence of changes in rental prices over time. A greater change in monthly rent between 2010 and 2022 was shown to be negatively associated with satisfaction with the local public administration. Future research should aim at collecting panel data to more robustly investigate the effect of rising rental prices over time.
Regarding the role of additional potentially influential local characteristics, the empirical results underscore that the negative effect of high rental prices on satisfaction with the local public administration is not diluted by the availability of a larger number of rental housing units or of other public services. Apart from that, the empirical analysis points to the importance of cultural threat perceptions triggered by a higher number of foreign-born residents in a neighborhood, as the negative effect of rental prices is only observed in neighborhoods with a higher number of foreign-born residents. This result mirrors previous findings of research on the political consequences of housing policies, which has highlighted the role of economic as well as cultural factors (Ansell et al., Reference Ansell, Hjorth, Nyrup and Larsen2022; Held and Patana, Reference Held and Patana2023; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025).
Overall, these findings add important new insights for the political science literature on the political consequences of rising rental prices. While previous research has demonstrated the consequences of higher rental prices for partisan and housing policy preferences among renters (Marble and Nall, Reference Marble and Nall2021; Abou-Chadi et al., Reference Abou-Chadi, Cohen and Kurer2025; Cohen et al., Reference Cohen, Stroppe, Jünger, Schoen and Weßels2024; Reisenbichler and Koenig, Reference Reisenbichler and Koenig2024), this study provides evidence on the consequences of rising rental prices for local political attitudes of renters. Moreover, the study extends previous research by investigating the role of additional factors potentially shaping the effect of higher rental prices on satisfaction with the local public administration. In this way, the results illustrate the complexity of the effects of rising rental prices.
Nevertheless, the results of this paper are based on observational data. Future studies based on panel data or survey experiments are needed to uncover the causal mechanisms by which rental prices influence political attitudes. Moreover, rising rental prices can be interpreted as one symptom of the overall increasing costs of living. This study shows that such increases have political consequences in form of lower levels of satisfaction with the local public administration. How other price developments, such as rising energy or food costs, are related to the influence of rental prices is an open question and would be an important topic for future research.
Moreover, while the RWI-GEO-RED dataset offers comprehensive details on rental prices and rental apartment availability at the zip code level, it has certain limitations. It only covers rental prices and apartments advertised on the ImmobilienScout24 platform, not actual rental prices paid. Future research would benefit from survey data on individual household rents and renters’ perceptions of whether they are being (too) high and/or increasing. This would enable distinguishing the impact of objective and perceived rental prices on satisfaction with the local public administration.
Additionally, the study relies on a very broad operationalization of rental apartment availability that considers only the supply side of the rental housing market. It would also be important to consider the demand side to determine how many individuals are competing for the available housing units and how this influences the relationship between high rental prices and satisfaction with the local public administration.
Despite its limitations, this study provides a sound starting point for future studies on the political effects of rental prices. To further corroborate this study’s findings, it would be desirable to expand the analyses beyond Germany and consider cases with similarly low levels of homeownership. Furthermore, it would be valuable to examine the effects of rising rental prices in rural areas. This would help determine if higher rents impact political attitudes beyond urban renters. Given higher homeownership in rural Germany, such a study could serve as a strong test of whether rental prices affect satisfaction with the local public administration, since fewer individuals may be affected by higher levels of rental prices.
For the case of German urban areas – so, for local areas that are strongly affected by rental price increases – this study reveals that higher rental prices can have significant political ramifications by reducing satisfaction with the local public administration among renters. Since lower satisfaction levels with public service provision lower political trust (Stroppe, Reference Stroppe2023) and increase support for radical right parties (Nyholt, Reference Nyholt2024), policymakers must recognize the connection between high rental prices and political attitudes and implement effective measures to ensure affordable rental housing in urban areas.
Supplementary material
The supplementary material for this article can be https://doi.org/10.1017/S1755773926100538.
Data availability statement
For replication, all Stata codes are publicly available in the Open Science Framework at the following URL: https://osf.io/2wpra. The survey data used will also be published as soon as the research project ‘Social openness, social control, and the integration of Muslim immigrants – A panel study in neighborhoods of selected German cities’ is finalized. Before that, please contact the data owner Prof. Dr. Conrad Ziller (conrad.ziller@uni-due.de). The data on the rental prices can be requested from the RWI Leibniz Institute for Economic Research for scientific purposes.
Acknowledgements
I would like to thank the editor and the anonymous reviewers for their invaluable feedback. Moreover, I thank Conrad Ziller, Achim Goerres, Johanna Plenter, and all members of the Working Group of Empirical Political Science at the University of Duisburg-Essen for their extremely helpful comments on earlier versions of this paper. In particular, I thank Paul Gies and Julika Ude for assisting with research on the rental price data and the final proofreading of the manuscript. A previous version of the paper was presented at the EPSA Annual Conference 2025 in Madrid, and I thank participants for their valuable feedback.
Funding statement
I gratefully acknowledge funding by the German Research Foundation DFG for the project ‘Social openness, social control, and the integration of Muslim immigrants – A panel study in neighbourhoods of selected German cities’ (project number: 439200663; principal investigator: Conrad Ziller).
Competing interests
The author reports there are no competing interests to declare.
Ethical standard
The survey used has received full ethical approval from the Ethics Committee of the University of Duisburg-Essen on 13/07/2022.
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