consequence of the housing shortage
There is no longer room for families in big cities
02/15/2022, 7:58 p.m
There is a shortage of apartments, especially in large cities and conurbations. Many of the once young newcomers have now started a family and actually need more space – but they can’t find a suitable apartment. Many can only leave the cities with waving flags.
Two rooms, kitchen, bathroom, with children and the home office on the kitchen table – according to experts, the lack of square meters in the big cities is becoming too much for many young families. They give up their cramped apartments and move to the suburbs or the country. “The families leave these cities with waving flags,” said co-author Harald Simons at the presentation of a market report by the Central Real Estate Committee (ZIA).
In the largest cities, it is mainly “small shoeboxes” that are being built today, with hardly any affordable large family apartments. According to the report, rents continue to rise. On average, landlords demanded 3.7 percent more for new contracts than in the previous year. The increase is now greater in rural districts than in the major cities. “The trend towards the “new love of the land” has been confirmed,” says the report.
Nationwide, prices have risen significantly faster than rents. Condominiums were offered 14.3 percent more expensive than a year earlier. “The renewed increases and the enormous level of the purchase prices are both surprising and quite frightening,” say the experts. Recently there had been warnings about speculative exaggerations in certain cities. Co-author Lars Feld did not want to commit himself to whether there would be a real estate bubble and when it would burst. The economist said, “If interest rates go up, there will be a correction.”
Confusion with KfW programs
The federal government wants 400,000 new apartments to be built nationwide every year to ensure that rents and purchase prices do not rise so sharply. “We want to achieve them, we have to achieve them,” said State Secretary for Building Sören Bartol. He wants to fill the alliance for affordable housing and building with the federal, state, local authorities, housing and construction industry, tenants’ association and trade unions with more life. According to the report, around 315,000 apartments should have been completed in 2021, around 9,000 more than in the previous year. Because of the long construction times, 400,000 could only be reached in the next election period after 2025, said Simons.
ZIA President Andreas Mattner sees the goal as a long way off. He attributed this to the halt to a funding program for building renovations in January. Economics Minister Robert Habeck had surprisingly stopped previous KfW programs due to the high demand. Applications that have been submitted should no longer be approved. Finally, it was said that applications received before January 24th would be processed according to the previously applicable criteria, but that new applications would no longer be possible. Housing companies are now demanding compensation.
A spokesman said that the members of the Association of North German Housing Companies threatened the construction of more than 2,000 affordable apartments due to the back and forth. The companies lost around 52 million euros in subsidies that were planned for well-advanced projects. The association suggested that the companies take legal action for damages.
The Bavarian housing industry association VdW and the Federal Association of Independent Real Estate and Housing Companies (BFW) made similar statements. At the weekend, the Federal Association of German Housing and Real Estate Companies (GdW) named almost 150,000 apartments that could not be built as planned by socially oriented housing companies alone. Real estate expert Simons assumes that around 50,000 apartments will be affected.
More and more families are moving to the surrounding area
The German Tenants’ Association was alarmed. Many construction projects are dependent on planning security and funding, it said. “That’s why the federal government must now do its homework quickly and significantly increase both the funds for climate-friendly construction and renovation by KfW and the promotion of social housing and design them in the long term.” The Tenants’ Association pointed out that many tenants are overburdened by their housing costs. At the same time, new residential construction is stagnating and is not providing any relief for the extremely tense urban housing markets.
About two million apartments were missing, especially in the big cities, metropolitan areas and university towns, it said. Half of the poorer tenant families of at least four live, Simons runs in less than 80 square meters. He spoke of a dramatic situation. In the seven largest cities, 15 to 20 years ago, 60 to 80 percent of new apartments would have had four or more rooms. Now it’s 20 to 40 percent.
Many of the once young newcomers now have families and need space. More and more families are therefore moving to the surrounding area, explained Simons. This repeats a development that West German cities already took in the 1960s and 1970s. Simons recalled this. Cities could also shrink. However, it is not foreseeable whether the largest German cities are facing such a phase.