According to the Tenants’ Association, the housing market in Germany is in the greatest crisis for 30 years. At the end of the year, 700,000 apartments were missing. A high demand mixes with fewer construction projects. Now a study is again bringing expropriations by housing groups into play.
The German housing market is experiencing the biggest crisis in 30 years. This is the result of a current study by the Hanoverian Pestel Institute and the Schleswig-Holstein Institute Working Group for Contemporary Building in Kiel (Arge), which is available to the Funke media group, among others. Accordingly, at the end of the year, 700,000 apartments were missing. The dramatic situation was partly unforeseeable – but on the other hand it is also homemade. And the situation could get even worse in the coming years.
Housing market in Germany in “dramatic situation” – Fewer new buildings could aggravate the situation
For years, the demand, especially for cheap apartments, has clearly exceeded the supply. This is especially true in metropolitan areas and in and around large cities. In 2022, there was another factor that aggravated the situation even further: the influx of people from Ukraine fleeing Russia’s war of aggression put a strain on the already strained housing market in Germany.
The President of the Tenants’ Association, Lukas Siebenkotten, is already predicting a “very tough year for tenants”, as the Funke media group reports. The alarm bells of the housing shortage had not rang as loud as they are now, Siebenkotten explained. He expects a severe slump in subsidized, affordable housing in particular.
Experts have been predicting this for several years. Warnings from initiatives or interest groups that the government should invest more in social housing were regularly ignored. The building trade union IG BAU is again warning of upheavals on the real estate market this year. It is fitting that Federal Building Minister Klara Geywitz has already admitted that the Federal Government will miss its target of 400,000 new apartments per year.
Exploding costs, high interest rates, inflation: even private individuals are building less
But it is not only state-organized housing construction that is stagnating. Due to skyrocketing construction costs, sharply increased interest rates and high inflation, many private individuals can no longer afford to build. They are also pushing further into the housing market. Harald Schaum, deputy federal chairman of IG BAU, also sees a danger for the federal government’s skilled labor plans in connection with the housing shortage.
At the end of 2021, the government declared that Germany needed 400,000 migrants per year to compensate for the shortage of skilled workers. The situation on the housing market is also crucial for these people, explained Schaum: “Living and working – they belong together. No one will come if they can’t live here or can only live at horrendously high rents.” Housing construction is an essential key for the employment situation and thus for the functioning of the economy.
Siebenkotten also renewed his appeal to the federal government to give the problem of the housing shortage more space. The federal and state governments would have to turn things around now. “Or we will experience an unexpected disaster on the housing market.”
Last resort expropriations? According to the study, the rents of 200,000 households in Berlin alone could fall
A deficit of 700,000 homes means that there are already as many homes missing as could be built in two years. If at all, the problem can only be solved in the long term. But what short or medium-term options are there to quickly stabilize the housing market and lower rents?
The Rosa Luxemburg Foundation, the party-affiliated foundation of the left, is bringing the subject of expropriations or socialization of housing groups into play again with a short study. The study relates to Berlin.
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Accordingly, an expropriation of corporations that each own more than 3,000 apartments would lead to a rent reduction of almost 16 percent. That would be between 44 and 160 euros per month on average, depending on the size and location of the apartments. The prerequisite would be an adjustment of the rents to the rent index of the state-owned housing companies.
Constitutional lawyer Ulrich Battis saw no chance for expropriation of housing groups in 2021
In addition, the authors of the study emphasize that those looking for a flat with medium or low incomes have better chances on the housing market and can thus counteract the socio-spatial divide.
As sensible as the expropriation of housing groups seems, it is also unlikely, explained the constitutional lawyer
Accordingly, it is theoretically possible to socialize corporations via the “socialization” law in Article 15 of the Basic Law. However, Battis points out that the principle of proportionality also applies in such a case. It would also violate the freedom of the capital market – one of the fundamental freedoms of the EU, according to Battis.
Sources:, with material from DPA
Source: Stern
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