There is a shortage of hundreds of thousands of affordable apartments in Germany. A new funding instrument is intended to help. But experts doubt that it will achieve much.
The federal government wants to ensure more affordable rental housing by reducing taxes. This is intended to motivate socially oriented companies to offer permanently affordable housing. The cabinet introduced a corresponding regulation on Wednesday. It will now be debated in the Bundestag. But tenant representatives are already expressing doubts that the plan will work.
Construction Minister Klara Geywitz (SPD) spoke of a good day for all tenants. “With the new non-profit housing system, we are creating another strong pillar for more affordable housing in our country alongside social housing,” she stressed. The so-called non-profit housing system is not a new instrument, but it was abolished in Germany in 1990. The SPD, Greens and FDP had agreed to reactivate it in the coalition agreement.
Which tenants should move in
The target group are tenants who can no longer afford an apartment with the rent that is now standard in many areas. Specifically, the cheap apartments are to be rented primarily to people whose income is no higher than five times the standard social assistance rate (563 euros). Single parents are allowed to earn a little more, namely six times the social assistance rate. This income limit is only checked once, when the rental contract is signed. The federal government assumes that up to 60 percent of households in Germany will benefit from the regulation.
What requirements apply to providers
Non-profit housing is aimed at socially oriented companies, associations and foundations. If they provide subsidized housing, they will benefit from the tax relief offered by non-profit organizations in the future. To do this, the rent offered must be below the usual market price. The apartments must remain permanently affordable – unlike social housing, which is no longer subject to price control after a certain period of time. The federal government expects around 100 companies to take part.
What exactly will be changed
The provision of affordable housing is to be officially classified as “non-profit” in Section 52 of the non-profit law – just like youth and elderly care or monument and nature conservation. This automatically brings with it tax advantages. This should make it financially attractive for socially oriented companies to rent out apartments. The federal government also wants to give companies more flexibility in their reserves so that they can save money for larger investments such as construction projects and renovations.
What this means financially
Depending on how much tax they currently pay, the new regulation could bring companies one to two thousand euros per apartment per year, according to estimates by the federal government. A company with 300 apartments could therefore save around half a million euros per year. The companies are encouraged to invest any surpluses they generate in the construction, purchase and modernization of housing.
What the economy thinks about it
The tenants’ association has serious doubts that the concept will actually lead to more and permanently affordable housing. The coalition agreement lacks investment allowances that were actually planned, said President Lukas Siebenkotten. “In the opinion of experts, this will only help companies that are already non-profit.
The housing industry sees the tax relief as a useful addition in the fight against the housing shortage, but it appealed to the government to set up a broader support system. There is currently a shortage of 800,000 apartments, explained the industry association GdW. In view of the current crisis, companies must first be enabled to build again. In view of the permanently higher interest rates and simultaneously increased costs, this can only be achieved through a short-term interest program.
Source: Stern
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