Peter Ramsauer, German minister for transport, building, and urban affairs, told the Welt am Sonntag newspaper, “We need more public housing.”
Most of the responsibility for the construction of public housing lies with the individual states, but the federal government contributes €518 million per year.
Ramsauer, of the Christian Social Union (CSU), said that the states of North Rhine-Westphalia, Hamburg and Bavaria have largely taken advantage of the available funds, while Berlin, Brandenburg, and Mecklenburg-Pomerania have not.
“The states handle public housing in different ways, and there is definitely some leeway,” he said.
A study by the Pestel-Institute in Hannover has predicted that an extra 400,000 homes will be needed in Germany by 2017. Currently, there is a lack of 100,000 residences.
“The good news is that the climate for new investors has noticeably improved,” Ramsauer told the newspaper. “Because the returns on investment were so small for many years, too little was invested for a long time.”
Opposition parties, meanwhile, are calling on the federal government to place legal limits on rising rents.
“The lawmakers should cut the rent cap limits in half,” Florian Pronold, of the Social Democratic Party (SPD), told Die Welt. Current limits allow rents to rise 20 percent within three years, and Pronold would like to see that reduced to 10 percent.