German’s housing crisis

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Lack of affordable housing

Rents are skyrocketing in German metropolitan areas. Currently, there is a lack of almost 2,000,000 apartments in the 77 major German cities. (Heinrich-Böckler-Stiftung). This figure includes roughly 1.4 million affordable apartments with less than 45 square meters for single person households.

Referring to financial possibilities of the local population, two phenomenons can be detected: On the one hand, the shortage of affordable housing is particularly huge in cities with a large share of inhabitants with low income in cities with large populations, like Berlin, Leipzig or Dresden. And on the other hand in large cities with significant high rent levels (e.g. Munich, Stuttgart, Düsseldorf).

Nationwide, the lack of affordable apartments in Berlin ist the most significant one, totaling at 310,000, followed by Hamburg (150,000), Cologne (86,000) and Munich  (78,000). But even in cities such as Moers, Wolfsburg, Koblenz or Ulm, the need for affordable apartments exceeds the supply by several thousand each.

In 77 major German cities, more than 40 percent of all tenant households pay more than 30 percent of their net income for rent. Every fifth person has to face a much bigger burden: They have to spend more than 40 percent of their income for rent. The burden is particularly high in the Cologne-Bonn area.

Decreasing social housing units

Since the 1980s, the state, provinces and municipalitieshave abandoned social housing subsidies. Since then, social housing has been built with majority-participation of privately owned companies in so-called PPP-projetcs (PPP – Private Public Partnership) – a system, which guarantees controlled rents (lower than the market-price) only for a limited period of time. Thus, the number of social housing in Germany over the past 30 years has decreased from over 3 million to 1.2 million in 2017. Between 2018 and 2021, the fixed-price-regime will end for 150,000 social housing. German federal government is funding social housing in this legislature with 5 billion euros and intends to use it to build 100,000 new social housing units within four years. That is far too little. The social housing stock will continue to melt. The German Trade Union requires the construction of at least 100,000 social housing units annually, quadrupling the government’s intention.

Rents are rising almost twice as fast as income

In Germany rents for new apartments are growing much faster than saleries, almost twice as fast. This is shown by an evaluation of the German federal government (Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR)) at the request of the Greens (Bundestagsfraktion von Bündnis 90/Die Grünen). In the first quarter of 2018, the nominal wage index rose by 2.7 percent compared to the first quarter of 2017, while rents rose by an impressive 5.5 percent.

Increasing commuting distances

As more and more workers cannot afford an apartment near their place of work, they have to commute longer and longer distances. The average commuting distance has been extended by 20 percent since 2000. The means not only that worker lose time to share with their families and for leisure, this development heightens the pressure on the environment (Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR)). This means that employees spend more time in a traffic jams, traffic is increasing

Gentrification and short term rentals are changing neighbourhoods

Since more and more local residents can no longer afford the rising rents in the metropolitan areas, they are going to be “priced out” or – as it is called in German – “entmietet”. This process of gentrification leads to a rapid and often extensive exchange of the resident population in the affected areas.

Airbnb rentals are also changing the face of the city. According to a study done by Empirica, around 26,500 accommodations in Berlin were offered via Airbnb in 2018, in Munich 11,000, in Hamburg 9,400 and in Dortmund 550. These are flats, which are no longer available for those, who are looking for a long-term-accommodation.

16. December 2019