The rising costs and scarcity of rental apartments have created a significant housing crisis, with little progress in construction despite political promises. Families like Anne Haferkorn’s struggle to find affordable options, while many face financial burdens exceeding recommended rent limits. The construction sector is hindered by a lack of skilled workers and declining housing development. Innovative approaches in places like Reutlingen show potential, but comprehensive collaboration among various sectors is essential to address the crisis effectively.
The ongoing scarcity and rising costs of rental apartments have become a pressing issue, with little progress in construction efforts promised by political leaders. Addressing the housing crisis is poised to be a significant challenge for the next government.
Anne Haferkorn and Georg Stein are on a quest for an affordable apartment. With two children and the need to work from home, they require at least a four-room apartment in Speyer (Rhineland-Palatinate) or nearby. Their budget allows for a monthly rent of about 1,600 euros.
“We’ve been proactive, posting notices in nursing homes and kindergartens, distributing flyers, talking to people in cafes, placing newspaper ads, and utilizing online classifieds. Unfortunately, the competition is overwhelming,” laments the frustrated young father.
The rent control legislation introduced in 2015 appears to have had little impact.
Basic Standards Are Out of Reach
“Individuals like police officers, nurses, single parents, and those with immigrant backgrounds often find themselves at a disadvantage. This struggle affects not only low-income earners but society as a whole,” remarks Lukas Siebenkotten from the German Tenants’ Association.
The housing issue has been recognized for several legislative terms. In an effort to combat soaring rents, the coalition aimed to boost housing construction, targeting the completion of 400,000 apartments annually, including 100,000 publicly funded units. However, experts predict that by 2024, only about half of that target will be achieved.
The decline in housing construction in Germany persists.
The Construction Sector Faces Challenges
Siebenkotten argues that no one should allocate more than a third of their net household income to housing. Yet, millions are spending over 40 percent, with countless individuals exceeding 50 percent.
Simultaneously, the construction industry is grappling with a crisis. Lars Diehl, a project manager at Krieger + Schramm Frankfurt RheinMain GmbH & Co. KG, notes that many potential buyers are adopting a wait-and-see approach, hoping for lower interest rates or construction costs.
Diehl worries that costs may rise in the future due to the loss of skilled workers, with many having exited the industry amid the crisis. As construction resumes, there will be a shortage of labor. “We definitely need skilled workers from abroad, but they also require housing, complicating the situation further,” he explains. The number of single-family and two-family homes being built has significantly decreased compared to previous years.
In Berlin alone, over 40,000 apartments are currently unavailable, and in Munich, the number exceeds 20,000.
Tenant Conditions May Deteriorate
Economist Matthias Günther from the Pestel Institute warns that tenant conditions are likely to worsen: “Where households once could afford a single-family home for 1,100 to 1,200 euros, they now need 1,700 to 1,800 euros, which is already unaffordable for many. This creates a ripple effect in the rental market as fewer people transition to homeownership, leading to fewer available rental units.”
The shortage of social housing is particularly concerning. According to Günther, West Germany had around four million social housing units in 1987; today, that number has plummeted to just 1.1 million—less than five percent of the total rental housing stock—removing the potential for a price-stabilizing effect.
For those receiving citizen’s income, the state covers accommodation costs deemed ‘reasonable.’ Critics claim the state too readily accepts inflated rents set by landlords. “In some cities, accommodation costs of twelve euros per square meter or more are common, making it impossible for low-income individuals to afford. Recipients of citizen’s income often reside in these units, complicating social dynamics, and in effect, the state contributes to rising rents by endorsing these high accommodation costs,” says Günther.
Increasingly, companies seeking personnel are also facing housing challenges for their employees.
Innovative Solutions in Reutlingen
In Reutlingen, Baden-Württemberg, Mayor Thomas Keck is actively tackling the housing shortage. He believes that maximizing profits in public housing construction is misguided. A shift in expectations regarding financial returns is necessary to facilitate apartment development.
Recently, a new residential complex featuring 76 apartments was completed in Reutlingen. The average rent for these publicly funded units is 8.88 euros per square meter, while even the privately financed apartments are priced significantly below the rental index.
Families and young individuals often seek help too late.
Calls for Action from the Wealthy
While this is a positive step, collaboration among all stakeholders is crucial to effectively address the housing crisis. “The public sector, corporate housing initiatives, churches, trade unions—all must work together. Only then can we hope to rebuild the social housing stock similar to what Germany had in the 1970s and 1980s within the next 30 years,” Keck states.
Is it realistic to expect enough apartments in 30 years? Advocacy groups are calling for measures such as increased inheritance taxes for the wealthy and new, streamlined funding programs. However, even with these changes, the situation may initially worsen, as any apartments not constructed today won’t be available tomorrow. The upcoming government faces a monumental task to begin the process of turning the tide on this housing crisis.
This topic was reported by Deutschlandfunk on January 21, 2025, at 11:51 AM.