Germany’s housing crisis shows little sign of easing. According to data from market research institute empirica, rents in the country’s 40 largest cities have risen by 51 percent over the past decade. In Berlin, asking rents have jumped by almost 77 percent since 2016.
For many residents, that means an ever-larger share of their income is going on housing, leaving less money for everyday expenses and making it harder to save for the future.
How to solve the problem has been the subject of intense political debate for years. Now, just before the summer parliamentary break, Germany’s coalition government has unveiled a package of housing proposals, including plans for a new Housing Development Corporation for Affordable Housing (WBG).
Trade unions have sharply criticised the plans, however, arguing that parts of the package undermine democratic decisions and fail to tackle the root causes of soaring rents.
With a nationwide weekend of housing protests beginning on Friday, the debate is set to become even louder.
READ ALSO: Germany's housing crunch is driving away skilled foreign workers
What is the government’s new housing corporation?
At the centre of the government’s plans is the proposed Housing Development Corporation for Affordable Housing (WBG), which is intended to increase the supply of homes in the affordable price segment.
So far, only limited details have been released. But the corporation’s remit would be to support social housing and serial construction, with a particular focus on regions facing proven housing shortages.
According to a concept paper reported by taz, the WBG would not directly build homes itself. Instead, it would develop projects and put them out to tender, with private construction firms carrying out the work.
The federal government would hold a majority stake alongside private investors and would guarantee loans, allowing the company to access cheaper financing.
Housing Minister Verena Hubertz said the initiative could bring “new momentum” to housing construction.
Significant hurdles remain, however. Because housing policy is largely a matter for Germany’s states, an amendment to Germany's Basic Law may be required, meaning the proposal would need two-thirds majorities in both houses of parliament.
READ ALSO: Are Germany’s big housing firms really addressing discrimination in the market?
Ending the expropriation debate?
The second major proposal is even more controversial.
The coalition wants to introduce a federal law preventing states from nationalising the housing stock of private housing corporations. The move is widely seen as a response to Berlin’s long-running expropriation debate.
In September 2021, a majority of Berlin voters backed the Deutsche Wohnen & Co. referendum, which called for the socialisation of large private housing companies.
Despite the result and subsequent legal victories, the proposal has not been implemented and remains tied up in political and legal arguments.
State construction ministers backing the new proposal have argued that expropriation plans discourage investment in rental housing construction.
But Katja Karger, chair of the German Trade Union Confederation (DGB) in Berlin-Brandenburg, accused the government of disregarding voters.
This week she said the coalition was “snubbing this democratic process” and failing to provide “a quick and effective solution to the profit-driven explosion in rent prices”.
Why campaigners are taking to the streets
The expropriation issue is not the only reason housing activists are angry.
Trade unions and campaign groups have also criticised government plans to restructure housing benefits, fearing this could lead to cuts for low-income households at a time when rents remain high.
Against this backdrop, nationwide housing protests are taking place this weekend – from July 3rd to 5th – under the slogan “Rent is bursting the frame” (Die Miete sprengt den Rahmen).
Backed by more than 180 organisations, the campaign is calling for stronger rent regulation, a rent freeze and more affordable housing construction.
READ ALSO: Where student housing costs are highest in Germany
Events are being held across Germany, targeting town halls, state parliaments, property companies and luxury real estate developments. More information is available here.
Comments