A reader recently told me about an extraordinary demand made during his niece’s apartment search in the United States. The property management company reportedly asked his sister, who was acting as guarantor, to demonstrate that she possessed $1 million in liquid assets. The annual rent would have been less than $50,000. His sister refused. The company eventually rented the apartment to her daughter anyway.

I cannot independently verify this account. It appeared in a response to my article about sexual propositions in Germany’s rental market. Still, the figures caught my attention. Why would a landlord demand evidence of assets worth more than twenty years of rent? Perhaps the company had an unusually strict screening policy. Perhaps someone applied the wrong financial threshold. We do not know.

The story raises a larger question that goes well beyond one apartment: When housing becomes scarce, how much can a landlord demand before ordinary tenant screening becomes an unreasonable barrier?

New York’s 40-times-rent requirement

The reader’s million-dollar story may be unusual, but demanding financial tests are familiar in New York. An August 2026 report from New York City’s Department of Consumer and Worker Protection describes landlords frequently requiring applicants to show annual income equal to 40 times the monthly rent.

Consider an apartment advertised at $3,000 a month. The applicant may need to demonstrate annual income of $120,000. That is $10,000 a month before taxes to qualify for housing costing $36,000 a year.

The calculation gives the landlord reassurance that rent will arrive regularly. It can also exclude people who have managed to pay similar rents for years but cannot satisfy the required income multiple.

The New York City report recognises this problem. It proposes reconsidering credit checks and examining whether applicants should have alternative ways to demonstrate their ability to pay.

There is an important legal distinction. The 40-times-income requirement is a reported screening practice, not a universal statutory requirement. Different rules apply to particular forms of housing assistance, including protected voucher applicants. A screening rule can create serious hardship even when it does not violate a statute.

Why landlords want so much information

A landlord is handing over an expensive asset to someone they may know very little about. Missed rent can cause financial problems. Property damage may be costly. Recovering possession through legal proceedings can take time. Those concerns are legitimate.

The trouble begins when risk management becomes a competition to find the applicant with the strongest financial profile rather than someone reasonably capable of paying the rent.

Imagine two people applying for the same apartment. One earns a high salary and has substantial savings. The other earns less but has maintained an excellent rental payment record. A rigid income threshold may favour the first applicant without fully examining the second person’s actual payment history.

The landlord can make that choice more easily when many applicants are waiting. Someone facing the end of a tenancy may have a few weeks to secure accommodation before they must move out.

Germany has its own screening culture

Germany approaches residential tenancy through a different legal system. Landlords commonly request proof of income. Applicants may also encounter requests for creditworthiness information from SCHUFA. The federal government’s Make it in Germany portal explains these practices to newcomers.

A person arriving from Pakistan or another country may have a particular difficulty. They can possess a good salary and a secure employment contract but lack an established German credit record.

The government guidance recognises alternatives. Depending on the landlord, a bank reference from the applicant’s home country or evidence of employment may help. A guarantor can sometimes provide additional reassurance.

Yet a landlord is not obliged to choose the applicant who has the most convincing explanation for a missing credit history. Where competition is intense, an applicant with familiar German documents may appear easier to assess. That can disadvantage newcomers even without deliberate discrimination.

German landlords cannot ask whatever they like

Germany has an important safeguard that deserves more attention. In January 2026, the Conference of Independent Data Protection Supervisory Authorities, known as the Datenschutzkonferenz, published updated guidance on information collected from prospective tenants.

The guidance distinguishes between stages of the rental process. At the initial viewing stage, a landlord generally needs much less personal information than when preparing to conclude a tenancy. As the application progresses, more detailed financial questions may become justified. Near the final decision, the landlord may request appropriate evidence of income or creditworthiness.

The distinction matters because an apartment viewing should not automatically become an unrestricted investigation into someone’s private life.

The 2026 data-protection guidance also addresses the documents landlords may request. Applicants should not be required to surrender a complete GDPR Article 15 credit-agency disclosure containing financial information unnecessary for assessing a particular tenancy. The guidance permits appropriately limited creditworthiness evidence and explains that income documents can be supplied with irrelevant information redacted.

A landlord’s legitimate interest in assessing financial reliability does not create an unlimited right to collect personal information.

The problem with saying no

Legal rights offer protection, but they do not remove competition. Imagine an applicant viewing a reasonably priced apartment in Munich. The landlord asks for more information than appears necessary. The applicant can question the request. They can refer to data-protection guidance or seek advice.

But the applicant also knows that other people want the same apartment. A landlord may simply select someone else, and the rejected applicant may never know precisely why. That uncertainty gives excessive screening practices room to survive.

A person with plenty of housing options can challenge an unreasonable request. Someone who has already lost several applications may decide that challenging it is not worth the risk. I find this one of the most uncomfortable features of a tight rental market. A right can exist in law while remaining difficult to exercise during a competitive application process.

Germany’s housing shortage has not disappeared

The pressure behind these decisions has a measurable foundation. According to Germany’s Federal Statistical Office, authorities approved 238,500 dwellings in 2025, an increase of 10.8% from the previous year. That was an improvement after several years of declining approvals.

But permission to build an apartment does not mean the apartment is ready for occupation. A developer must still secure financing and complete construction before a tenant can move in.

Germany’s housing problems also differ between regions. A shortage in Munich cannot be understood through national figures alone. Location matters, particularly where jobs and universities attract more people than the available housing can comfortably accommodate.

I examined that construction problem in an earlier article, Germany’s Housing Crisis: Why Building More Homes Has Become So Difficult.

The shortage affects rents. It also affects the decisions people make before they become tenants. Applicants may offer more documents than necessary because they believe doing so will improve their chances. They may accept an inconvenient apartment or agree to conditions they would question in a less competitive market.

Foreign applicants can face another obstacle

Financial screening is only one part of the selection process. In Germany, applicants can also face discrimination connected to their names or perceived ethnic backgrounds.

A January 2026 ruling by Germany’s Federal Court of Justice addressed discrimination involving an applicant whose Pakistani-sounding name affected her treatment during the apartment-viewing process. The case concerned an estate agent’s responsibility under German anti-discrimination law.

I discussed the ruling in Germany’s Housing Discrimination Problem for Foreign Workers.

It is important to separate the issues. A landlord asking for legitimate evidence of income is not necessarily discriminating. An applicant lacking a German credit history may also present a genuine assessment difficulty. But rejecting otherwise comparable applicants because of ethnic origin raises a different legal question. Housing shortages and discrimination can reinforce one another without being the same problem.

From financial demands to more disturbing conditions

My interest in landlord power began with another article, Sex for Rent in Germany: When the Housing Shortage Gives the Wrong People Power.

That investigation examined reports of accommodation providers proposing sexual arrangements to people searching for rooms. We do not have reliable national figures establishing how widespread such propositions are in Germany. The documented cases nevertheless reveal a particularly troubling form of housing-related exploitation.

A landlord asking for salary evidence and someone demanding sexual access are engaging in fundamentally different conduct. They should never be treated as equivalent. What connects the subjects is the question of bargaining power.

How much freedom does an applicant possess when refusing a demand could mean losing one of the few affordable rooms available? Someone with savings and temporary accommodation may walk away. Another person may have a child to house and no family nearby. The same housing shortage can impose very different pressures on those two households.

Can better regulation solve the problem?

Germany and New York illustrate two approaches to tenant screening. New York’s debate includes the financial thresholds used to assess whether applicants can afford accommodation. Germany’s data-protection framework also examines whether landlords need particular information and when they may collect it.

Neither approach eliminates the underlying shortage. A landlord with fifty applicants can still choose one tenant, even if the application form becomes shorter.

Regulation can nevertheless reduce some of the unnecessary burdens imposed during that selection. It can limit excessive collection of personal data. It can provide remedies for prohibited discrimination and make certain screening practices more transparent.

Housing supply remains important because competition shapes how much bargaining power either side possesses. A tenant who can choose among several suitable apartments has more freedom to question an unreasonable demand.

The question behind the million-dollar demand

I keep returning to the reader whose sister refused to prove that she possessed $1 million in liquid assets. The property manager reportedly rented the apartment to her daughter anyway.

We cannot know why the company withdrew or overlooked its original demand. Perhaps the requirement was unnecessary from the beginning.

What interests me is the family’s ability to reject it. They had enough confidence to challenge the company, and the application still succeeded.

Other applicants may never discover whether a demanding landlord would have backed down. They submit the documents, search for a guarantor or abandon the application.

Germany has developed rules governing the personal information landlords may collect. New York is examining how financial screening can exclude people who need housing. Both debates lead to a question that deserves more attention: How much proof should a person have to provide before being allowed to rent an ordinary home?

A landlord needs reasonable assurance that rent will be paid. The harder question is where that assurance ends and the demands of a highly competitive housing market begin.