Number of social housing units falling steadily

Anyone who lives in a large German city and is not a high earner knows the problem: affordable housing is hard to find. Politicians have long since recognized this and are promising a remedy. So far, however, citizens have felt little of this.

Own goals badly missed

With the announced housing construction offensive, the current government wanted to create 100,000 new social housing units per year. So far, however, it has fallen well short of its targets.

In 2023, only 49,300 homes were built, less than half of the planned number.

Another reason for the weak figures is the faltering construction sector. Rising prices for materials and the shortage of skilled workers have hit the sector hard. As the federal government does not build itself, but only provides subsidies, it is reliant on private companies to achieve the planned figures.

Number of social housing units is falling

However, the problem of a lack of housing is not only not getting any better, it is actually getting worse.

The reason for this is that the fixed prices resulting from the state subsidy expire after an agreed period. Landlords will then be able to rent out the apartments in question again at normal market prices.

In 2023 alone, the housing market will have lost 15,300 social housing units due to the loss of such price maintenance.

This can only be remedied by a further increase in subsidization, as the profitability of a project is crucial for developers. The state would therefore have to actively intervene here and strengthen incentives.

Summary

The current figures initially give little hope of an easing of the situation on the housing market.

Government investment is required here, as well as the introduction of strict sanctions for violations of rent regulation measures such as the rent brake.