Istanbul+5 Statement  05.06.2001 2. Housing

Increasing Housing Costs 

With the exception of the decreasing stock of apartments with social housing obligations, rents in Germany are based on the free market, although their increase is limited by law. In every case rents have to keep within the range of a statistical average based on the rents paid for comparable apartments in the local market. In order to enforce this rule tenants have to turn to the courts. 

During the housing crisis of 1989-1994 in Germany rents increased by 30% on average. In some regions and in new rental agreements the increase was much higher. After the construction boom the rent increases became more moderate. In 1995 rents rose by 3,9% and in 1998 by 1,8%, but nowhere did they return to the level of the 80es. To date, rental prices have always risen more quickly than the general increase in the cost of living. In prosperous regions rents have again started to rocket, for example by 9,3% in Munich. 

In the GDR rents were dictated by the state and were far from cost-covering. After the unification rents in eastern Germany were rapidly raised to a market level, which naturally caused housing costs to multiply. Although incomes were increasing too, the great number of unemployed were especially struck hard. Within a very short time they had to pay a much higher proportion of their income for housing. Even after 1995 the annual increase rate there was higher than in western Germany, but during the last few years this trend seems to have stopped because of emigration. 

The costs of housing maintenance have also increased significantly within the last few years, which has made us used to speaking about a "second rent". Expensive investments into the sewage and garbage systems have caused the costs of public services to rise out of proportion. As far as heating costs are concerned, German law requires an individual bill based on the users' actual consumption. But besides individual behaviour, costs vary a lot depending on the quality of the heating system and insulation. These are factors that can hardly be controlled by tenants. The sharp rise of oil prises caused a similar increase in heating costs in 2000/01. An individual one-off payment to poor households by the state brought little relief. 

Of course, the increasing housing costs are especially painful for the lower income groups. In western Germany the percentage of income spent on housing costs rose from 19,7% in 1991 to more than 26% in 2001. But households with high incomes still pay much less than 20% of their income for housing, while the poorest households (with an income of less than 1.000 DM a month) pay 67% for housing. Consequently, the quality of housing provision is becoming segregated, with the poorer households facing greater problems in paying rent and higher risks of eviction. 

Individual Housing Aid 

In 2001, after years of stagnation, the government raised the housing benefits granted to low income households. But the benefits are not only still too low to help the poorest, but they are a relatively expensive strategy to guarantee housing provision as well. Therefore, it is absolutely necessary to keep a certain number of flats with subsidised rents and to strengthen the laws that regulate the markets. 

In Germany, households with very low or no income receive social aid payments from the municipality, including payments for housing costs. Because of the high costs and the growing indebtedness of municipalities, the restrictions are becoming more and more intense. Many local authorities have set very low limits for housing costs and have forced the recipients of such aid to leave their homes when the domiciles were regarded as too expensive. The result is the discrimination, replacement and a progressive concentration of poor people in some parts of the cities, in short: the ghettoization of the poor. 

Persons Living on Social Welfare in Berlin 

More and more housing associations ask their future tenants with low incomes to present a surety-ship or payment guarantee. This especially affects people living on social welfare or dependant on other social benefits. A paper issued by the welfare office, which guarantees the payment of the rent or a deposit of three months' rent is not sufficient any longer. For those who live on the poverty line or amid a low-income family structure, it is difficult to obtain a surety-ship from friends or acquaintances. With this practice of housing associations the difficulty increases for persons living on social welfare to get access to an own flat.

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