The Alliance for Affordable Housing, with around 50 participants, met for the 1st Alliance Summit on April 27, 2022.
“A new departure in building, housing and urban development policy” is the motto of the coalition agreement between the traffic light parties. The words are now to be followed by action. An affordable housing alliance with around 50 participants met for the first alliance summit on April 27, 2022.
In a fair society, everyone should be able to afford a home. However, this is far from being the case everywhere in Germany. One thing is certain: more affordable and climate-friendly housing is needed. The coalition government has set itself ambitious targets to achieve this: 400,000 new homes are to be built every year. Of these, 100,000 apartments are to be publicly subsidized.
This intention is set out in the coalition agreement. The “Alliance for Affordable Housing”, which is based at the new Federal Ministry of Housing, Urban Development and Building (BMWSB), was set up to implement the ambitious targets. Together with the alliance, the ministry states that it wants to “initiate a construction, investment and innovation offensive in Germany”.
The Alliance for Affordable Housing began its workon April 27, 2022. It consists of 35 permanent members, including representatives of the federal states, municipal umbrella organizations, housing and construction industry associations and civil society organizations. Specialist guests are also regularly invited to provide advice. Support from the Bundestag is provided by twelve permanent, advisory guests from the parliamentary groups of the governing coalition.
The kick-off meeting took place at the EUREF Campus in Berlin-Schöneberg. High-ranking representatives of all governing parties, the federal states of Baden-Württemberg, North Rhine-Westphalia, Hamburg and Hesse, municipal umbrella organizations, industry and business associations as well as civil society and churches took part.
Affordable Housing Alliance: kick-off event in April 2022
The first Alliance summit was convened by Federal Building Minister Klara Geywitz (SPD) and consisted of the minister and top representatives of the associations. Prior to this, there were Alliance working rounds with the various Alliance members. They worked out the goals and content, the working structures and the timetable for the alliance process.
There was also a lot of criticism. For example, the umbrella organization of the German housing industry described the government’s housing targets as “illusory”. According to GdW President Axel Gedaschko, material bottlenecks, exploding energy costs, supply chain problems, rising interest rates and the uncertainty surrounding new construction subsidies from 2023 are combining to prevent the construction of affordable housing.
Minister Geywitz told dpa ahead of the meeting: “It’s about getting through a big hole: we have a huge need for housing in Germany, especially affordable housing. […] We also need the support of the construction industry, which needs to significantly expand its capacities but is under pressure due to rising construction costs and material shortages.”
According to Geywitz, almost 800,000 apartments in Germany have currently been approved but not yet built. Obstacles to planning are one reason for the slow progress.
Densification as a strategy
A draft of the final declaration of the Alliance for Affordable Housing shows that new housing is to be created primarily in conurbations. In this context, densification of existing housing plays a much greater role than new buildings or new construction areas.Filling gaps between buildings, adding storeys to houses and converting commercial buildings into apartments offer opportunities to densify German cities in an efficient and climate-friendly way.
However, according to the German Construction Industry Association, the ambitious targets do not match reality. The war in Ukraine and the ongoing consequences of the coronavirus pandemic are causing material shortages, price increases and significantly higher energy prices. As a result, certain projects have to be prioritized.
There is also criticism from politicians: Jan-Marco Luczak, the CDU/CSU housing expert, criticized the lack of solutions proposed by the alliance and noted that valuable time could be lost through theoretical debates.
Caren Lay from the left-wing parliamentary group, on the other hand, criticized the fact that many expensive luxury and owner-occupied apartments would be built, which would not be able to solve the problem of affordable housing. Instead, she suggested that only social housing should be built in inner cities with a tight housing market from now on.
A new entrepreneurial spirit?
The leading association of the real estate industry, the German Property Federation (ZIA), called for a new entrepreneurial spirit at the kick-off meeting of the Alliance for Affordable Housing. According to President Dr. Andreas Mattner, this should serve as a response to the accumulation of the pandemic, Ukraine and climate crisis.
“Construction costs have exploded to an unprecedented extent, construction companies are barely able to keep to their contracts, interest rates are skyrocketing, subsidies are being cut and efficiency requirements are set to increase. And all of this with a need not just for 400,000 new apartments per year, but – due to the admission of hundreds of thousands of refugees – for 500,000 to 600,000 apartments. It is no longer possible without bold cuts: We need a regulatory freeze and the suspension of time-consuming approval procedures. The commendably swift extension for refugee buildings is a very good first step. Next, we need a banking summit to find measures to counter the rise in interest rates and a materials and supply chain summit. The real estate industry must be able to participate in these crucial decisions,” says Mattner.
“Furthermore, we need a degressive depreciation as well as serial and modular construction that is not only talked about, but also implemented across the board. The challenges seem almost impossible to solve – but crises also present an opportunity for change and we all have a duty to push for this,” he added.
