Decline in Social Housing in Germany Despite Government Goals

Germany is witnessing a significant decline in the number of social housing units, contrary to the ambitious targets set by the current coalition government. The government had aimed to construct 100,000 social housing units annually, but recent reports indicate that this figure is steadily decreasing, even with increased funding allocated for the initiative.

Social housing provides affordable accommodation options for individuals with limited financial means, typically accessible through a housing entitlement certificate. However, the available units are diminishing, prompting concern from the coalition of social housing organizations, including the German Tenants' Association and the IG Bau union. They have highlighted a troubling trend that persists despite ongoing discussions about housing.

A recent study conducted by the Pestel Institute revealed that in 2023, Germany had only 1.07 million social housing units, a decline from approximately 1.18 million five years prior. According to Matthias Günther, the head of the Pestel Institute, the trend has been consistently downward, necessitating urgent action to reverse this situation.

The Federal Ministry of Construction has increased its funding for social housing, with 3.5 billion euros allocated in the previous year alone. Plans are in place to invest nearly 22 billion euros in social housing by 2028. The ministry views the Pestel study as a supportive argument for its strong emphasis on affordable housing.

However, merely increasing financial resources is not enough. Experts, including Dietmar Walberg, head of the Kiel Construction Research Institute, have pointed out that the country is currently constructing what he terms "premium social housing," which is simply too expensive. He has proposed a more cost-effective approach focused on basic or experimental construction methods.

Walberg suggests several strategies to reduce costs, such as lowering the thickness of walls and ceilings, using less expensive window glazing, and revising stringent climate and noise protection standards. Implementing these changes could reduce construction costs by up to one-third, allowing for more funds to be allocated towards building additional social housing units.

To increase the supply of social housing, the coalition is advocating for a five-point action plan, which includes establishing standard regulations for social housing construction and reducing the value-added tax (VAT) on new social housing from 19% to 7%. Additionally, the creation of a social housing registry is proposed to facilitate planning and cooperation among all levels of government. The organizations are calling for a minimum of 11 billion euros for social housing development, which they argue should be guaranteed by constitutional law.

Günther emphasized that even achieving the two million social housing units goal would only address the most pressing needs. If the government were to provide housing for everyone eligible for subsidized accommodation, the actual requirement would be around 5.6 million social housing units nationwide.

The decrease in social housing availability is partly due to units becoming available on the open market after their subsidy period ends, compounded by stagnation in new construction. The coalition of organizations reports a deficiency of approximately 550,000 affordable housing units in urban areas, although the Federal Ministry of Construction has its own projections, which will be unveiled in March.

The coalition government has set a target of constructing 400,000 new housing units annually, underscoring the critical nature of housing as a social issue in contemporary society. Verena Bentele, president of the VdK social association, highlights that the lack of focus on housing in political party platforms is particularly perplexing. She asserts that social housing is a vital component in creating affordable living spaces and urges a new government to prioritize funding for these initiatives, especially in light of demographic shifts and the increasing number of elderly individuals who will require social housing.

Moreover, the coalition is advocating for a quota of 10% in the allocation of social housing to improve access for individuals with disabilities, aiming to enhance their opportunities in the housing market.