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Compared to the housing situation in many countries of the world, the housing provision and security of the majority of people in Germany seems very good. At Istanbul+5, the German government was able to report a relevant growth in the housing stock since 1996. But don't overlook the ugly stains on this beautiful picture: Not only is Germany's housing provision influenced by a dramatic cyclical crisis, but more than half a million of people are still homeless, the housing rights of refugees are systematically violated, increasing social inequity and segregation as well as regional differentiation inside the housing markets is becoming a fundamental structural problem and, lastly, the state has for the most part deregulated the traditional housing policies without supplying any secure alternatives to meet the future challenges.
The development of housing provisions during the second half of the nineties was characterised by a temporary surmounting of the serious housing crisis of 1989 to 1994, when not only over one million people were homeless, but even the majority of those housed suffered from the lack of housing possibilities.
The main reason for that crisis was the heavy decrease in newly built apartments during the 80ies, the result of a reduction in public spending on social housing programs. The scandalous housing situation suddenly became one of the most discussed public issues and after some time politicians reacted by re-establishing active housing support with an emphasis on new building.
The resulting boom in housing construction reached its peak in 1994, when the construction volume of 1988 was exceeded by 250 percent. During the next few years the housing situation improved, but when the rents did not increase at the former high rates, the state and market again reacted with less spending and construction. Today the yearly construction rate is again very low and in some regions a new crisis is starting. At the present time, Germany seems less than ever to be able to control the cyclical housing conjunctions by central interventions.
In Germany we have to consider a permanently growing need for houses, which is not caused by population growth but by the increasing number of households and their individual consumption of living space. The proportion of small households, especially single households, has been getting higher and higher for a long time. Young people today found families rather late and elder people tend to stay in their rather big homes even if their children have gone and their partners have died. Single households need much more living space than families and every new household needs a flat of its own.
A second important factor is the wish of many people to improve their housing conditions. Having a big apartment or a house is an important status symbol; more and more people need working space at home. But not all of the people are also able to pay the higher costs. Households with higher incomes demand much more living space than lower income households. Inside the existing housing stocks heavy redistribution competition is taking place; the poorer people are naturally the losers.
The ecological and financial costs required to meet the needs are less and less financially feasible. Building capacities for sustainable management and more equitable distribution of the existing housing stock is one of the main challenges today.
Since the sixties rental law has set a rather strong legal frame for rental agreements. Today it protects the tenants against non-justified lease termination and evictions and also regulates the conditions for rent increases inside an existing agreement.
During the past years, the government has tried to reform these rather complex laws with the rhetorical goal of achieving more user-friendly simplification, but the landlords fought heavily for liberal deregulations. After the 1998 election, the Social Democratic-Green government again started the negotiation process and at the end of 2000 it seemed that they also would aim to weaken rent control. But after heavy protests from the tenants' movement, the new law since passed is not worse than the old, though it still fails to solve some existing problems.
In general, rent control in Germany is some of the strongest in Europe. The main security risk is the landlord's right to evict the tenant if he wants the apartment for himself. Especially in attractive neighbourhoods many rental apartments get converted in private owner-occupied ones, the massive replacement of poorer households being the consequence.
Since the end of the war the social housing support has been the main factor behind the improvement of the housing of the masses. Support was mainly given in the form of cheap credits for legally defined forms of construction. During a defined period of time the law obliges the supported owner to give the apartments only to households with lower incomes, and local authorities may also decide that the apartments should be given to people with a special urgent need. During the period of obligation the landlord is only allowed to calculate rents within specified limits covering the costs. After paying back the credits, the owner is free to calculate at market rates.
Today the temporary character of the social housing commitment is one of the main problems in housing provision. The absolute number and the proportion of social housing is decreasing rapidly. In North-Rhine-Westphalia for example about 2 million social dwellings existed in 1980, but today only a bit more than 1 million still exist. The social need is significantly higher. Local authorities possess less and less rights to take over social apartments for people urgently needing them. One consequence is the concentration of poorer people in social housing schemes; another is the increasing difficulty to integrate homeless people.
For over a decade now, politicians have discussed massive changes in the social housing system, claiming it was too expensive and does not meet the needs of the poor. The Social Democrat-Green government has now finished a final draft for a new social housing law. The goal is no longer the provision of apartments for all but is rather the aid for poor households. The law will keep the program of giving subsidies for construction but also makes the regulations much more flexible. The federal states, not the national government, will be responsible for concrete housing programs and will be allowed to use public monies even for buying rights of occupation within the existing housing stock.
A more flexible frame is indeed needed to meet the very different conditions in the various German regions. Likewise, by focusing on the existing housing stock the possibility occurs to improve the housing provision of the poor using less resources and with less danger of social segregation. But this progress means nothing because the national government is simultaneously cutting back its expenditures on social housing to only 230 million €. This is nearly nothing. In 1993, the expenditure on social housing was more than 1,5 billion €. Social housing as a national program is dead. At regional levels the consequences of this law will vary a lot, depending on the political colour of the governments and their resources.
For a long time, low-profit companies in the ownership of industrial enterprises, the tenants themselves (co-operative housing), trade unions (up to the eighties) and (mainly local) public institutions were the main participants in social housing programs. Up to the eighties, a special law ("housing in benefit of the public") had given these sectors a variety of tax advantages and obliged the rental companies to calculate only cost-covering rents even if there was no obligation to the social housing law. Since the revocation of the law many of the companies have been looking for higher profits.
At the same time, industrial enterprises with big housing stocks once needed to house their workers try to gain profits from their real estate. Their main strategy is to sell housing schemes to speculators or to transform rental houses into owner-occupied apartments and sell them to the anxious tenants at high prices. The tenants concerned sometimes react with strong protests, but political influence is very low in this sector. Shareholder value and globalisation become serious dangers for these as yet modestly priced housing stocks.
Even companies belonging to state or local administrations are becoming more and more influenced by profit orientation. Even they are selling dwellings and are concentrating their business on new construction for private ownership. But the most serious danger in this sector is the sell-out of public companies as a whole. In 2000 the state sold former railway houses to multinational corporations. A couple of cities have sold their housing companies or large shares of them to private corporations or are presently planning to do so. By doing this, they give away their only possibility of direct intervention on housing construction and access as well as lose the chance to influence local housing markets. In some cities popular mobilisation against the selling of public assets is quite successful. This may become a chance to reinforce public housing policies at local levels.
Most of the housing co-operatives in western Germany were founded before World War II. In many cases they don't play an active role on the markets and just administrate their existing stock. Although co-operative housing could be an alternative to the transformation into single ownership, only very few new co-operatives were founded during the last few years. One reason for this is the bad financial support compared to single ownership.
In 1995, 270,000 new apartments in multifamily houses and only 165,000 one and two family houses were built in West Germany. By 1999 the numbers had gone in an opposite direction: 192,000 one and two family houses had been built, in comparison to only 114,000 new flats in apartment buildings with just 45,000 of them meant for rental purposes. While the numbers of multi-storey houses and rented flats were decreasing, those of private property were continuously increasing. This trend simultaneously reflected and contributed to the polarisation of income and property in Germany.
It is estimated that private property construction in Germany is sponsored by national expenditures and tax exemptions of about 37 billion DM every year. This is eighty times more than the current expenditure on social housing. Most of the money is used for programmes, which enable the middle class to buy or build privately owned houses.
It is a policy with heavily negative effects on social equability and sustainability. The public support for buyers of single apartments is one of the main reasons why profit orientated construction companies can hope to sell at high prices. And these public expenditures are direct subsidies for new housing construction in sprawls and on the outskirts of towns. These subsidised one- or two-family houses require a much higher ratio of land for each flat that is built than multi-storey houses. Their insulation is generally worse and they need more energy. They require an extra and expensive infrastructure of water systems and transportation and also increase individual car traffic. They form middle class ghettos, weakening the economical capacities of the existing cities.
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(c) Knut Unger 2001. mailto:unger@mvwit.de |
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