Affordable housing is becoming scarce

In light of the refugee influx, some cities are resorting to rigorous measures

For a long time, a decline in Germany's population was assumed. Now, demographic forecasts need to be revised. The large influx of refugees last year poses a huge challenge to the housing market.

For years, too few housing units were built; most recently, the figure was only 140,000 units per year. The backlog is immense: reports from the Cologne Institute for Economic Research (IW) estimate an annual need of between 402,000 and 447,000 housing units for the years 2015 to 2020, depending on how family reunification of asylum seekers develops. Construction Minister Barbara Hendricks (SPD) had only spoken of a need of around 350,000 housing units per year.

Real estate seized

The housing shortage is so severe that some cities have already resorted to requisitioning commercial properties. The city of Hamburg has decreed that commercial properties can be used as accommodation even against the owner's will. Bremen is planning a similar regulation. In Berlin-Kreuzberg, even vacant private apartments are to be requisitioned to house refugees. State police laws allow cities and municipalities to do this in emergencies, at least temporarily, when all other accommodation options have been exhausted.

“No expropriations”

When the legal boundary of private property is crossed, the specter of expropriation quickly looms large. Construction Minister Hendricks signaled reassurance: "Expropriations are out of the question for us, as are forced placements of refugees," she told the Handelsblatt newspaper in the fall. Unease is also spreading among tenants, who will likely have to dig deeper into their pockets in the future. Some municipalities have even issued notices of termination in order to accommodate asylum seekers. This is permitted under Section 573 of the German Civil Code (BGB), as in this case there is a "legitimate interest of the landlord.".

However, such a sensitive measure cannot be politically motivated, as lower-income citizens seeking affordable housing would rightly feel disadvantaged. The consequence would not only be a social struggle in the housing market, but likely also the end of the "welcoming culture.".

 The new asylum law

To ease the situation, the federal and state governments plan to create 150,000 initial reception centers. To enable the faster construction of affordable accommodation, building regulations and energy efficiency requirements (EnEV 2016) are to be temporarily relaxed.

Sources: bundestag.de, bundesregierung.de, Federal Office for Migration and Refugees (BAMF), Federal Association of German Housing and Real Estate Companies GdW, Institute of the German Economy Cologne (IW), zeit.de, spiegel.de, Handelsblatt.