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Neglect of Public Housing

by Thomas Pany and Thorsten Knuf Tuesday, Sep. 29, 2015 at 11:46 AM

Crisis and chance are represented by the same Chinese letter. Big US and German cities have sold off public housing to gain revenue. The Federal Low Income Housing Tax Credit program has financed 2-3 million units. The state is obligated to protect from the brutal market.


By Thomas Pany

[This article published on 9/16/2015 is translated from the German on the Internet,]

For decades, politics has favored high income persons. The consequences of this prioritization appear with the refugee crisis.

“Tackling” is the right word but how can this succeed? 400,000 new apartments must be built in Germany annually up to 2020, the Pestel Institute [1] calculates [2]. 260,000 will be completed this year [3]; 140,000 are missing.

80,000 of the new apartments must be price-controlled social housing, says the Institute that specializes in urban development questions. Their current study that was presented yesterday [4] but is not yet available online calculates the need in additional living space from refugees and work migrants in the “high phase of refugee migration.”

According to reports [5], the 2015 study starts from a “net immigration of one million persons,” 300,000 newcomers from other EU states and 700,000 asylum seekers or political refugees. The numbers could change.

There were annoyed commentaries on the reports of the Tagesschau newspaper [6] on the Institute’s study.

“There is no affordable living space for many low-income Germans since social housing was run down and abandoned again and again. Luxury remodeling brings more money.”

A mountain of resistance often starts from this standpoint.

With astonishment, 2nd class persons (residents) see that social housing must be built for the 1st class persons, the refugees.

If the Federal Government would actually provide more money for public housing, then those who already live in Germany wou8ld still hardly afford the expensive rents [cf. Even the Middle Class Will Pay More to Live (7)].

This argument should be considered instead of living out rage on the basis of asylum seekers and work migrants. The causes for this rage – the shortage of apartments at rents that low-income persons can afford [8] – go back to times when the crush of newcomers was not yet the number one theme for social distresses and fears.

Three years ago the Pestel Institute in a study [9] stated that four million public apartments were lacking. At that time, the Institute estimated around 5.6 million apartments were needed nationwide and 1.6 million available units. Every year there are fewer and fewer public apartments, the study criticized. On average 100,000 public apartments disappear from the market every year – “a dramatic development.”

The following reasons were named. More and more apartments fall out of rent control and only a few public housing units are built. This theme was forced to the background by the political side. Clear development tendencies leading to more profitable developments in the building sector can be inferred from the study.

“In 1987 there were four million public apartments in the old Germany. Today there are only 1.5 million in all of Germany, not even half as many.” DIE ZEIT [1]

In the article quoted above published at the beginning of August 2015, it was reported that local communities sold properties and real estate more and more often to put money in their treasuries which increasingly narrowed their possibilities for public housing construction.

In the last years, many big cities made money with a large share of their apartments. Because of shortage of money, Dresden sold its whole communal housing stock in 2006 to an international real estate investor for 1.7 billion euros. The Saxony metropolises became Germany’s first debt-free big cities and also the first cities without apartments for the needy. Kiel also unloaded all its apartments. Berlin has sold around 310,000 of its formerly 585,000 apartments. Two years ago Munich sold off 32,000 apartments. The list could be easily extended.













By Thorsten Knuf

[This article published on 9/15/2015 is translated from the German on the Internet, Berlin and many other big cities urgently need affordable housing.]

Germany needs two mission new apartments in the next years. That is the conclusion of a study of the Pestel institute in Hanover that the Social Housing alliance presented on Tuesday in Berlin.

Finding an affordable apartment is now extremely difficult in many German population centers and university cities. However the situation will dramatically worsen in the coming years according to the estimate of experts in view of the intense immigration and the stream of refugees.

At least 770,000 apartments are lacking nationwide according to a study of the Pestel Institute specializing in urban development. The actual deficit cou9ld even be higher since new apartments were built in regions without a housing shortage in the last years.

To cover the need, around 400,000 apartments must be built every year nationwide up to 2020, Institute director Matthias Gunther said. However far fewer units will actually be completed. In 2015, the number will amount to 260,000.

The number of housing approvals stagnated. “Obviously what can be built economically must be maximized,” Gunther said. Many investors build expensive condo- or retail objects for wealthy customers. On the other hand, building apartments for households with medium or low incomes is often less profitable.


The refugee numbers clearly aggravate the situation. In their study, the experts start from a net influx of a million people in 2015. This includes 300,000 migrants from other EU states and 700,000 asylum seekers or political refugees. That seems a rather conservative estimate in light of current developments.

This week Pestel director Gunther and alliance activists urged politics to actively fight against the housing emergency. A new start of housing construction is necessary. 80,000 rent controlled social apartments should be part of the 400,000 units that must be built every year.

Renter alliance director Lukas Siebenketten said there were 3.5 million social apartments in Germany in the past. The number fell continuously to around 1.5 million because apartments fell out of rent control and no new units were added. “Enormous counter-measures are imperative,” Siebenketter demanded.


The association alliance also sees the state obligated in another way. Tax incentives and loosening of building regulations are vital.

The desired housing should be freed from the land transfer tax and the land tax should be suspended for social housing. However states and local communities depend on this revenue. Suspending the conditions for energy-efficiency contradicts the goal of the German government to reduce carbon dioxide emissions.

For some time, the associations have urged improved depreciation possibilities for new buildings. The Pestel Institute recommends a special write-off of another percentage point for construction of affordable apartments in regions with particularly strained housing markets. With such instruments, the state stimulated housing revitalization in the East after German unity.

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Housing is a Human Right marc Wednesday, Sep. 30, 2015 at 10:43 PM

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