Social housing is becoming increasingly scarce!

The call to boost social housing construction is growing louder. This is linked to the shortage of affordable housing in many cities and the refugee crisis. However, the structure of social housing in Germany has its pitfalls, as an overview shows.

How many social housing units are there in Germany?

The focus of social housing construction was in the 1950s and 60s, after the Second World War. It quickly aided reconstruction at a time of capital scarcity. Millions of subsidized apartments with capped rents were built. This social housing restriction typically expires after 20 years, after which the apartments can be rented on the open market. According to an estimate by the German Tenants' Association, approximately 70,000 to 80,000 apartments lose their social housing status each year.

But aren't new social housing units being built?

According to projections by the Federal Ministry for Housing, Urban Development and Building, the number of social housing units was still 3 million in the mid-1990s. Since then, it has more than halved. This is partly due to the fact that since 2007, the federal states have been solely responsible for social housing promotion. They receive annual compensation of €518 million for this. However, many federal states have spent these funds on other purposes, so there has been no corresponding replacement.

Who is allowed to move into social housing?

The aim is to support low-income households. According to the German Economic Institute (IW) in Cologne, households are considered poor if their income is less than 60 percent of the median income, i.e., the income level reached by 50 percent of all households.

And who actually lives in social housing?

According to a recent study by the Cologne Institute for Economic Research (IW Köln), only 46 percent of households in social housing are considered poor, while 54 percent exceed the poverty line. This is because incomes often increase after moving in, but the households do not move out as a result.

Why not evict the occupants from the social housing to make room for those who are truly in need?

This is not a viable option for politicians, as they do not want to be responsible for forcing entire families out of their established homes.

Why not simply withdraw the unjustified subsidy?

This is actually the intended procedure, but politicians often shy away from taking this step. Thus, the under-occupancy levy is only imposed in exceptional cases: Hesse is currently aiming to reinstate it. While this would be a step towards greater fairness, it doesn't eliminate the problem that under-occupied apartments are simply not available to those who truly need them.

How many social housing units do we need to help all those in need in this way?

The Pestel Institute estimated this number at 4 million, but that was before the refugee crisis. This figure appears unattainable in the foreseeable future. While the Ministry of Construction intends to double compensation payments to the states to €1 billion and possibly even increase them to €2 billion, this sounds like a lot, but is insufficient given the challenges. The property owners' association Haus & Grund has calculated, using Hamburg as an example, that €1 billion would only be enough for approximately 20,000 social housing units. Therefore, even with an increase in federal funding to €2 billion by 2020, these funds could only be used to build a mere 200,000 new social housing units – a drop in the ocean.

Would it even make sense to invest significantly more money in social housing?

That's debatable. Frankfurt, for example, spends around 45 million euros annually on this. The spokesperson for the planning department recently told the FAZ newspaper: "We simply can't get any more money into the construction pit." He was referring to the fact that, for traffic-related reasons alone, the number of construction sites in a city is limited, and that the authorities responsible for social housing cannot be expanded indefinitely.

More on this topic

• Living in the city: What do rising rents and house prices mean for families?

Cities like Frankfurt and Hamburg have adopted a policy of only approving new private residential construction projects if developers offer 30 to 50 percent of the apartments as social housing; in Hamburg's case, this even requires no compensation for the private developers. Is this sensible?

Building land in Hamburg has become so sought after that developers are scrambling for it. The problem is that the remaining apartments are being sold at even higher prices to make the projects profitable despite the partial social housing restrictions. This means that new gaps are emerging in the mid-range segment.

Are there more sensible ways to promote housing?

Most experts agree that direct support for those in need is more effective than subsidizing housing. With housing benefits, income is constantly monitored, so it simply ceases if income limits are exceeded. This is more targeted. However, it doesn't help many people in need to find an apartment in the first place and convince landlords to sign a lease.

Source: Süddeutsche Zeitung