German gov't promises more housing benefits to low-income earners

The German federal government will offer low-income earners in Germany more generous housing benefit payments from 2020 onwards, local media, the "Editorialnetwork Germany" (RND) reported on Friday.

RND cited a draft resolution for the housing summit held in the chancellery in Berlin on Friday according to which the government will reform the current benefit payment system in response to growing concern over a national shortage of affordable housing.

"This way the alleviating effect of housing benefits can be sustained and low-income households can be supported in meeting the costs of housing", the document read.

Additionally, the federal government is reportedly planning changes to rental law to prevent steep rises in the rates charged by landlords to tenants and to improve tax incentives for the construction of new apartments.

The measures outlined in the summit draft resolution all form part of a wider "housing space offensive" recently announced by the "grand coalition" formed by the German Social Democrats (SPD), Christian Democratic Union (CDU) and Christian Social Union (CSU).

Amongst others, Friday's summit was attended by Chancellor Angela Merkel (CDU), Interior Minister Horst Seehofer (CSU), Finance Minister Olaf Scholz (SPD), minister for the economy Peter Altmaier (CDU) and Justice Minister Katarina Barley (SPD), as well as representatives of state governments, municipal authorities and rental associations.

During a recent joint press conference, the Federation of German Trade Unions (DGB) and the Federal Association of German Tenants (DMB) have criticized the federal government for failing to ensure an adequate provision of social housing for their citizens. The two organizations complained that housing policies pursued by Berlin were inadequate to halt steep rises in rental costs and create more affordable housing units for lower-income earners.

The DGB an DMB argued that the federal government would have to provide public annual funding of at least six billion euros in order to ensure the construction of a desired level of 100,000 social housing units per year. They both highlighted that the number of affordable housing units in Germany has fallen from 4 million 30 years ago to only 1.25 million in 2018 while rents and real estate prices have soared in both absolute and relative terms (to income).

An alliance centered on the DGB and DMB said it will present Merkel and Seehofer with a housing petition signed by 70,000 Germans on Friday and has called for protests to take place in parallel to the summit. Around 1,500 people are expected to march in a demonstration in Berlin in the afternoon.

The Federal Statistical Office estimates that around 592,000 low-income households, or 1.4 percent thereof, received housing benefit in Germany at the start of the year. The federal government has made a pledge in its coalition agreement to build 1.5 million new homes in total until the end of its legislative term. In the draft resolution seen by RND, Merkel's fourth governing cabinet further specified that it was targeting more than 100,000 new social housing units until 2021 and "at least five billion euros" in funding forwarded to state governments for the construction of the affordable apartments in question.

In spite of the ambitious plans, however, a survey published by the newspaper "WELT" suggests that Germans are not convinced by the ability of their government to prevent further increases in housing costs. 69 percent of respondents predicted that Berlin would fail to halt further rises in rents in a survey conducted by the Emnid institute.

Speaking to Xinhua on Friday, Ralf Zimmer of the Research Institute for Regional and Urban Development (ILS) said that it was high time that policymakers began to prioritize issues of inadequate housing supply in Germany.

"The currently disproportionately rising rental- and real estate property prises lead to a loss of social diversity, creativity and hence also urbanity and create significant obstacles to a socially-just and spatially-balanced development of cities", Zimmer told Xinhua.

The ILS expert warned that rampant real estate speculation also translated into higher infrastructure and mobility costs and called for authorities to place a greater emphasis on securing benefits for their wider community with their housing policy approach.