Association for Innovative Social Research and Social Planning
GISS, Kohlhoekerstraße 22, D-28203 Bremen, Germany
Phone: 49 – 421 / 334 708-2 – Fax: 49 – 421 / 3 39 88 35
HOUSING POLICY IN GERMANY
by Volker Busch-Geertsema, GISS Bremen
Response to questionnaire provided by Angelika Kofler, ICCR, Vienna
Working paper for EUROHOME-IMPACT project, Bremen 2000
Germany has the lowest proportion of owner-occupied flats within the European Union. Ac-
cording to the latest available data (microcensus, additional inquiry of 1998), the share of
owner- occupying households amounted to 40.5%. 57.3% of all households in Germany we-
re tenants with first hand leases and 2.2% were subtenants.
Even 8 years after German unification, the difference in the owner-occupation rate between
East (31%) and West Germany (42.6%) is still significant (cp. Winter 1999, p.780). Apart
from this the regional differences are not that distinct. It is not surprising to note that the pro-
portion of owner-occupied dwellings in the city outskirts and in the countryside is significantly
higher than that in core cities. In West German country areas, there is more owner-occupied
housing than private rented stock (ratio: approx. 56 to 44) whereas, in core cities, rented flats
clearly predominate (ratio: approx. 82 to 20).
The latter is particularly true for East Germany where shortly after the unification, a majority
of owner-occupied property was found in the outskirts and in country areas. Still it does not
contribute to more than 31% (in the outskirts) and 22% (in country areas) of the housing
stock (only 6% in core cities; details on regional distribution taken from Böltken 1991).
Despite of all the efforts to make owner-occupied housing affordable for households with a
lower income, owning a house or a flat is still regarded to be a symbol of prosperity in Ger-
many. International comparisons show relatively high costs of construction and land as well
as other contributing factors which will be dealt with later.
The owner-occupation rates of single households are – regardless of incomes – very low
whereas those of households with children and households with high incomes are compara-
tively high (for further details see Experts´Commission on Housing Policy 1995, p.48). When
compared with other member states it may come as a surprise that a significant number of
rich households in Germany still live in rented homes. In 1998, 34.2% of all households with
net incomes of DM 5,000 (approx. 2,560 €) or more were tenants with first hand leases. A-
mong households with net incomes of DM 2,500 – DM 4,999 the proportion of tenants was
even higher, namely 57.4 % (cp. Winter 1999, p. 781, table in the appendix).
While the distribution of the German housing stock into rented and owner-occupied homes is
well documented, considerable problems arise when it comes to pinpoint the proportion of
social rented housing. Various comparative publications report that 26% of the total housing
stock in Germany were social housing in 19951. This would mean that out of a total of 32.25
million occupied homes in premises in Germany (in 1993, result of the 1% random survey on
buildings and flats cp. Statistisches Bundesamt 1995) 8.39 million were flats in social hosing.
These findings should be regarded as a considerable overestimation of the extent of social
housing in Germany. Due to the nature of the German system of social housing, its specific
funding structure and the dynamic associated with that, proving of an alternative percentage
will undoubtedly be difficult. According to the latest housing and building survey in 1993, only
2.73 million state-funded rented dwellings were registered for the whole of Germany (cp.
Statistisches Bundesamt 1995, table 8). Most of these dwellings were found in Western
Germany and made up a proportion of about 10.3% of the West German housing stock.
It is true that in East Germany a part of the housing stock owned by municipalities and hous-
ing co-operatives is also subject to nomination rights (the maximum, however being 50% of
this stock). However these dwellings are not subject to the controlled rent level which exists
in West German social housing. Furthermore the details concerning the allocation of those
dwellings are regulated by the laws of each individual federal state (guidelines for these
regulations are formulated in the Altschuldenhilfegesetz, a Federal Act which helps to regu-
late debts of Housing societies from GDR times) and differs once again on local authority
level. Even if around 2.8 million (50% - maximum) of all rented dwellings of municipalities
and co-operatives were regarded to be subject to allocation rights in East Germany in 1993
(in real terms, the number is significantly lower), this would result in an additional 1.4 million
“social rented dwellings“ without fixed rents. The proportion of “social housing” of the total
housing stock in Germany would thus have been at around 12.8% in 1993.
In the last few years, however, several decisive changes have taken place. A part of the
stock owned by the municipalities and co-operatives in East Germany in 1993 were sold af-
terwards (a condition laid down by the Altschuldenhilfegesetz. According to the Credit Insti-
tute for Reconstruction, Kreditanstalt für Wiederaufbau, approx. 281,000 dwellings were sold
between 1993 and 1999). In West Germany, for hundreds of thousands of dwellings in the
sector of social housing the time-limited social obligations have run out as planned from the
beginning. These dwellings now have to be counted as belonging to the private housing sec-
tor, because their owners may let them to any household (without income ceilings or nomina-
tion rights of municipalities like it is the case in social housing) and the usual rent price con-
trol mechanisms in social housing are not applicable any more.2
1 The percentage of privately rented housing is given with 36% and for owner-occupied housing, it was
supposed to be at 38%. These proportions are quoted in Balchin 1996, p.11, in Maclennan et al. 1996,
Table 1, as well as in several transnational reports from FEANTSA (Avramov 1998, p. 57; Edgar et al.
1999, p. 29). They all seem to be based on a publication of the European Observatory on Social Hous-
ing published by CECODHAS (1995/1996). But in another publication by the director of this Observa-
tory, Laurent Ghekiere, the percentage of social rental housing of housing stock in Germany (“1990’s”)
is given with 8 % (Ghekiere 1997, p. 44). In the new edition of “Housing Statistics in the European Un-
ion 2000” only a quota for West-Germany and there only in relation to the total rental dwelling stock is
given for 1999 (15 %; comp. Haffner/Doll 2000, table 3.5, p. 34).
2 Rent limits and legal conditions concerning the allocation of dwellings which characterise social hous-
ing in Germany have always been limited in time. So the present running out of these limits and legal
conditions for a very large number of dwellings is an innate mechanism of the funding structure of so-
cial housing in Germany.
An internal survey by the Federal Ministry of Transport, Construction and Housing amongst
the federal states in West Germany found only 2.3 million rented social homes (with different
ways of funding of “social housing“) in 1999. Furthermore the total number of homes rose to
36.547 million in 1998. The proportion of “social housing“ of the total housing stock in Ger-
many for the year 2000 may therefore be assumed to be under 10%. Social housing can be
found over-proportionally in conurbations.
Germany shows relatively low levels of segregation when compared with other European
countries especially Great Britain and France. This may be seen as an effect of the specific
and broadly applied funding system for housing construction in Germany and a housing pol-
icy which follows the basic idea of the 2nd Housing Construction Law (2. Wohnungsbau-
gesetz), namely to provide housing “for a broad spectrum of the population“. Still there are
areas in Germany, too (principally but not exclusively with a concentrated stock of social
housing), where high proportions of unemployment, poverty and under-privileged groups
such as foreigners, single parents and particularly families with many children are prevalent.
Such areas are either old housing quarters found close to the city or the large housing es-
tates in the outskirts which were built in the post-war period. Intensive discussions on the
apparent segregation and “social division“ (Entmischung) were held in the last few years.
Various programmes on the level of regional states (e.g. programme such as “areas in spe-
cial need of regeneration“) and since 1999, a national programme (“areas in special need of
development – the social city“) have been used to initiate changes in such city areas.
In 1993, some DM 33 billion was spent by the government, federal states and the municipali-
ties in terms of financial subsidies and tax reliefs to support housing plans. In 1994, the a-
mount spent was as much as DM 40 billion. In proportion to the GDP, this means 1.03%
(1993) and 1.18% (1994) respectively. Further information on calculation difficulties and on
the distributional effects of different measures can be found in the attached extract from the
report by the Experts’ Commission on Housing Policy (Expertenkommission Wohnungspolitik
1995, p. 64 – 73). In order to update the given information, a separate study would have to
be made and thus, no up-to-date conclusion can be included here. Nevertheless, one can
assume that the financial expenditure for housing subsidies (especially in the social housing
sector) was reduced in the mid 90s due to a significant relaxation of the housing market.
The German housing market shows very strong cyclical developments over the whole post
war period (see also Ulbrich 1992). From 1997 on, an acute shortage of housing was aggra-
vating in (West) Germany (further worsened by intense immigration of repatriates and asy-
lum seekers as well as through a decline in the construction of new houses). Since the mid-
1990s the housing situation has significantly recovered.
The number of homeless people which rose exorbitantly at the end of the 1990s has fallen
once again since 1995. In certain areas, the numbers were even at the lowest level of the
whole post-war period in 1999 (cp. Busch-Geertsema 1999 p.20f). From Eastern Germany,
an enormous amount of unoccupied dwellings is reported (up to 1 million units). The future
development is still uncertain, but there is no reason to believe that cyclical developments
have come to an end.
Despite the significant decline of immigration to Germany in recent years, numbers of hou-
seholds still increase as household size falls, the average consumption of living space per
head is also still increasing, particularly in times of rising economy. In the segment of af-
fordable housing for households with lower incomes shortages still exist on a local level.
Problems to find permanent accommodation may also be intensified for specific groups by
the sale of municipal housing stock as well as by the running out of obligations for former so-
cial housing. A further reduction of funding for the construction of new housing (after a tem-
porarily intensified financial support during the early 90s) will undoubtedly lead to renewed
Generally, West German housing policy in the post war period aimed at applying the princi-
ples of the German Social Market Economy in the housing sector. After the war, stronger
mechanisms to influence the housing market were implemented in trying to overcome the
housing crisis. But the control mechanisms used were planned to be time-limited from the
very beginning and as such social obligations for state subsidised social housing were also
time-limited from the start. Housing construction under direct control and ownership of mu-
nicipalities was, to a great extent, avoided and private as well as capital-orientated investors
were accepted and funded as social landlords. The law explicitly states priority for measures
to promote owner-occupation (which nevertheless did not result in a high increase of this te-
nure in Germany).
To strengthen the market orientation, the special tax status of non-profit housing companies
was lifted and the according law (Wohnungsgemeinnützigkeitsgesetz) was abolished. Fur-
thermore time-limits for social obligations were reduced, new ways of funding (with even
shorter periods of social obligations) were introduced and a general shift of supply subsidies
to housing allowances took place.3
2 Owner-Occupied Sector
Numerous subsidies are available for the building of owner-occupied housing. The respec-
tive measures and legal requirements can be seen in the information included in the annex
(Überblick über die Förderung durch den Bund). Among the most important measures are
subsidies for first time builders or first time buyers (Eigenheimzulage) 4
; including a special
subsidy for each child in the family (so-called “Baukindergeld”)5, subsidies for housing spe-
cific saving contracts (Bausparverträge)6 as well as the funding of “social housing for owner-
occupation” (to a lower extent).
Means-related housing benefit (Wohngeld) categorised as encumbrance allowance can also
be paid out to owner-occupiers. But, in 1998, only 0.5% of all owner-occupiers were recipi-
ents of housing benefit in West Germany. Households in owner-occupation which received
3 A good overview on the German housing policy in English and in comparative perspectives is pro-
vided by Kleinmann 1996, p.90 – 123 and Tomann 1996. For a liberal-economic viewpoint on the struc-
tures and problems of the German housing market, see the extensive report of the Experts´ Commis-
sion on Housing Policy (Expertenkommission Wohnungspolitik 1995).
4 Regulations in 2000 stated that for a period of 8 years 5 % of costs for new buildings or 2,5 % of the
price for used buildings are paid per year but not more than annually 5,000 resp. 2,500 DM (roughly
2,000 to 1,250 €), but only if the property is used by the owners themselves and if owners’ incomes are
below a certain limit.
5 In 2000 1,500 DM (roughly 750 €) were paid per child and year for a period of 8 years to owner occu-
6 The special institutions administering these contracts (and the special loans connected with them) are
housing benefit in Germany only made up 3.8% of all housing benefit recipients in 1998 (cp.
BMVBW 2000, p. 86, 93, 139). In the current Housing Benefit Report, the regulation for en-
cumbrance allowance is clearly defined: “It is not a financial instrument to be used for the
acquisition of owner-occupied homes, but should primarily serve as a social assurance in ti-
mes of emergencies.” (ibid., p. 86)
The question on how many owners will benefit from the remaining measures is a difficult one
to answer. As far as the housing specific saving system (administered by Bausparkassen)
and the federal subsidies for acquisition (previously granted in forms of tax subsidies) are
concerned, the majority who will profit from this will be new buyers. On the distributional ef-
fects of various measures compare the analysis in the report of the Experts´ Commission on
Housing Policy enclosed in the appendix. Considerable amount of personal capital is neces-
sary for the financing of owner-occupied housing and federal subsidies awarded to the ac-
quisition/building of owner-occupied homes will only be granted once in a life time to a per-
son. Furthermore, building and land costs are comparatively high in Germany. The Bauspar-
kassen system is based on a lengthy saving period, during which a fixed monthly or annual
amount is deposited up to an agreed maximum. On this amount, a favourable credit will be
granted (for details, cp.Tomann 1996, p.59; Kleinman 1996, p.98f).
On the whole, the broad and differentiated offers of rented homes have led to a low share of
owner-occupation in Germany and the average age of buyers is relatively high (at 38 years
of age, cp. Expertenkommission Wohnungspolitik, p.48).
3 Sector of Privately Financed Housing for Rent
The market of private rented housing in Germany is, as mentioned above, very large and di-
verse. Private renting is seen as the “normal” tenure by a great part of the German popula-
tion and provides a realistic alternative to owner-occupation and social housing for millions of
people. Households from different strata live in private rented housing though the percentage
of private tenants is especially high in lower income groups.
In Germany, as an essential legal principle for the regulation of privately rented housing, the
Tenancy Law and the Law on Rent Levels (Miethöhegesetz) should be mentioned. Both of
these laws are nationally binding. The Tenancy Law is an integral part of the Civil Code
(BGB; § 535 – 538) and contains a range of indispensable requirements on the protection of
tenants from arbitrary termination of their tenancies by landlords. Time limited tenancy con-
tracts are only permissible in very narrow legal boundaries (majority of tenancy contracts are
of indefinite period) and notice to quit is usually only possible in case of contractual violations
(particularly non-payment of rents) or for very specific reasons (e.g. if the property is needed
for the personal use of the owner or his relatives).
As to the amount of rent which has to be paid in the privately financed rented sector, it is not
left completely to free market structures nor is it under strict federal control. The Tenancy
Law forbids any forms of termination of leases in order to increase the rent. New rents are
freely negotiable. But should rents exceed the “locally comparable rents” (Vergleichsmieten
measured through a local rent level survey – Mietspiegel - or via examples of rents paid for
flats with similar quality and location) to an extreme degree, legal sanctions may be imposed
(§ 302a of Criminal Law , § 5 Economic Penal Law – “exorbitant rents”, Mietwucher). But this
happens quite seldom.
Much more relevant is the limitation on rent increase in existing contracts laid down in the
Miethöhegesetz. As stated, rents are not allowed to rise by more than 30% within a period of
3 years and new rent is not permitted to exceed the comparable rent substantially.
In case of renovations, a portion of the costs can be passed on to the tenant. For East Ger-
many after the unification special federal laws were passed to regulate rent levels (which led
to exorbitant rent increases because the rent level had been very low before) and to intro-
duce a greater differentiation of rents in relation to the quality and condition of dwellings.7
A change in the Rent Law with respect to simplifying the regulations and several new regula-
tions has been announced for the year 2000 and will be implemented in mid 2001. One of
these changes is the reducing of the present limit of rental increase in existing tenancies
from 30% within 3 years to 20%.
With respect to the development of rents, consideration should also be drawn to the secon-
dary costs of housing (street-cleaning, waste collection, water and canalisation costs, ground
taxes, insurances, maintenance costs etc.) which have, meanwhile, been regarded as a “se-
cond rent” and have led to a drastic increase of housing costs in the last few years.
Within the framework of the Construction Ordinance Law (Bauordnungsrecht) and other laws
and regulations (particularly the various German Industrial Standard Norms (DIN)), construc-
tional quality standards are set. They can be controlled when applying for building permis-
sion and at inspections of built homes. Lately, Germany has been criticised for its exagger-
ated demands on quality in house building, because they contribute to high construction
costs. Overall, the quality of rented homes in West Germany is significantly high. A majority
of the old buildings found in the inner-city areas are redeveloped and renovated. This does
not apply to East Germany. A great part of the stock (up to 1 million units) is empty and in
spite of the considerable efforts to renovate and redevelop the housing stock, much renova-
tion remains to be undertaken particularly in old housing and in many prefabricated buildings
(Plattenbauten). Recently it was decided to tear down about 400.000 empty dwellings in East
There is considerable financial aid by Federal Government granted to house building for
rent. This aid is mainly provided via tax deductions for investors. Building costs (as well as
acquisition costs) of rented homes can be written off over a period of 50 years.8
Owners of rented homes are single persons and heritage communities as well as numerous
small and large housing companies and housing co-operatives. In the past, differentiations
were made between non-profit housing enterprises (which were generally members of a na-
tional federation, the Gesamtverband der Wohnungswirtschaft, GDW, German member of
CECODHAS) and “free” commercial housing companies. Non-profit housing societies could
be funded by natural and legal persons, municipalities, commercial enterprises, unions, the
government, federal states and by churches. They were primarily, but not exclusively orien-
tated towards the building of social housing. Commercial housing enterprises, on the other
hand, concentrated more on the building of privately rented homes and owner occupied
7 For the essential legal regulations concerning tenancy rights and rent prices cp. Busch-Geertsema
1996, p.11ff. as well as Aken/Derleder 1994.
8 Details and also special programmes for East Germany can also be found in the appendix (Überblick
über die Förderung des Bundes, V. 2 and 3; VI).
flats/houses for higher income strata. The fact that the Non Profit Housing Law (Wohnungs-
gemeinnützigkeitsgesetz) was abolished in 1990, the massive shrinking of social housing
and a stronger commercial orientation of former non-profit enterprises undoubtedly have
contributed to differences becoming increasingly blurred.
Tenants as well as homeowners with low incomes up to certain limits can receive housing
benefit if their rent or mortgage payments exceed their financial means. Housing benefit is
called a rent support (Mietzuschuss) when it is granted to tenants, and mortgage and home
upkeep support (Lastenzuschuss) when granted to homeowners. Regulations on housing
benefit can be found in the appendix and in the latest Federal report on housing benefit and
rents in Germany (Wohngeld- und Mietenbericht, BMVBW 2000) which is also available as
internet download.9 The entitlement to housing benefit is mainly dependent on family in-
comes, rent level or financial burden of mortgage payments and size of the household.
Housing costs are only subsidised by housing benefit up to a certain limit which differs ac-
cording to region, age and quality of the flat. Generally, housing benefit may never cover the
whole amount of rent but support part of it.
Recipients of social assistance (Sozialhilfe) payments get social assistance for their (full)
housing costs, too, as long as the rent is deemed “reasonable” (§ 12; § 22 Federal Act on
Social Assistance, Bundessozialhilfegesetz). Until the end of 2000 a fixed percentage of the-
se housing allowances was financed by housing benefit (same with recipients under the war
victims’ relief scheme).10 These regulations are abolished and the entitlement to housing be-
nefit for this group is being calculated as it is for all other housing benefit recipients from first
of January 2001 on.
In 1998, a total of 2.95 million households received housing benefits. This made up 7.9% of
the total households (7.2% in West Germany and 10.7% in East Germany). As 96.2% of re-
cipients are tenants (ibid., p. 139) this also allows us to calculate a percentage of all tenants
in Germany who received housing support. With approx. 20.59 million of main and sub-
tenants in Germany in 1998 (results from the supplementary micro-census survey 1998, cp.
Winter 1999, p.781), the proportion of housing benefit recipients was at about 13.78%. Ac-
cording to the Wohngeld- und Mietenbericht 2000 (ebda. p. 81), probably more than a quar-
ter of residents in social housing receive housing benefit.
Housing Benefit has to be claimed in a written form at local housing benefit offices and in
most cases, will be granted for a period of one year to the eligible households (subsequent
applications are necessary). Experts assume that the share of households, who would be
entitled to housing benefit but have not claimed and received it is relatively high (up to 50%
in West Germany).
Until the end of 2000, the regulations on housing benefit have varied between West and East
Germany (being significantly more generous in East Germany). Between 1990 and end of
9 Information in English is available in Busch-Geertsema 1996, p.10ff and in a booklet published by the
Federal Social Ministry entitled “Social Security at a Glance”, which may also be downloaded from the
Ministry’s homepage: http://www.bma.bund.de/index_gb.htm .
10 The reason for that is the strong principle of subsidiarity in granting social assistance. Social assis-
tance will only be granted for the remaining needs after all entitlements to other forms of social security
have been claimed. Housing benefit is financed by the federal states and central state (50% each),
while social assistance is financed by municipalities.
2000, the levels of housing benefit entitlements had remained unchanged in West Germany.
But a reform of the Act on Housing Benefit was decided in 1999 and has been put into effect
Local tenant associations (Mietervereine) are lobbying for the interests of tenants regardless
of whether these are renting privately financed housing or social housing. They advise mem-
bers (who have to pay an annual membership fee) on questions in connection with rental
laws, recommend lawyers and legal costs insurances, distribute useful printed information
and perform lobby activities. Most of the tenant associations have linked up with a national
tenant organisation, called Deutscher Mieterbund. Marginalized and socially excluded per-
sons are commonly not members of a tenant association not least because they cannot pay
4 Sector of Social Housing
Social housing is built and administered by very different investors in Germany (former non
profit housing societies, private housing companies, insurances, private investors etc.). As
Kleinman (1996, p. 91) rightly points out “social housing takes a very specific form in Ger-
many. The term ‘social housing’ therefore describes a method of financing housing together
with a set of regulations and responsibilities about allocation of tenancies, rent levels and
standards, rather than refers to a physically identifiable stock of dwellings. Flats which were
at one time let as social housing can, once the subsidized loans with which they were built
have been paid off, be let as non-social private rented housing” (emphasis by Kleinman).
When the time limited social obligations have run out, rents are not any more bound to spe-
cific regulations of rent prices in social housing and the allocation can no longer be influ-
enced by local governments (in addition, dwellings may also be sold to owner occupiers or to
other individual owners when the period of social obligations has run out).
The period in which state subsidised housing is defined as social housing can be very differ-
ent. During the 1950s and 60s, social obligations for state subsidized housing were planned
to be long term (in fact up to 100 years, but after changes in repayment and interest rates of
state loans the usual duration was 40 to 50 years). Later, the period of social obligations was
further shortened, but the regulations differ from Bundesland to Bundesland and there again
differ according to different legal ways of subsidizing social housing. The period of social ob-
ligations could also be shortened by the early repayments of state subsidized loans. Nowa-
days, the period is usually between 25 and 10 years, but some Bundesländer and munici-
palities still subsidize the construction of housing which is bound to remain social housing for
From 1950 to 1999, according to unpublished sources of the Federal Ministry of Transport,
Construction and Housing Affairs, the construction of 8.665 million social housing units was
subsidized in West Germany (under various support schemes as indicated in the 2nd Hous-
ing Construction Law). Out of these, approx. 3.2 million were social housing units for owner
occupiers and about 5.4 million were social rented flats.
The fact that in 1999 only 2.3 million social rented housing units were counted clearly shows
that for more than half of the rental social housing units which were subsidized social obliga-
tions have run out in the meanwhile and the dwellings have thus attained the status of pri-
vate housing. As the extensive social housing stock which was built in the 50s and 60s, had
rather long-term social obligations and later obligation-periods were increasingly shortened
there has been a dramatic shrinking of social housing in the last few years. This process will
continue: It is assumed that only 1 million social rental housing will be left in Germany in
2005 (GDW 1998 p. 23).
The remaining social housing stock is, to a great extent, concentrated in special areas (often
in multi-storey blocks at the outskirts). At the same time many municipalities being owners or
shareholders of social housing companies have completely or partially sold their shares and
as a consequence lost influence on allocation of the dwellings concerned. As a result of this
development, fears have grown that segregation tendencies and concentration of deprived
groups in the remaining social housing estates will be intensified in Germany such creating
problems similar as in other European countries. This argument has also been brought for-
ward to combat the change (and reduction) of state subsidies to more targeted measures for
particularly disadvantaged households which is being planned as part of a reform of the 2nd
Housing Construction Law. Fears of “ghetthoism” and of a rise in “overstrained neighbour-
hoods” (title of a widely publicized study on behalf of the National Association of Housing
Societies, GdW 1998) as well as the traditional goal of having a “balanced social mixture” in
the occupancy of social housing have gained influence on the discourse about housing poli-
cies. On the other hand critical voices question the coherence and the achievability of the
last mentioned goal and call for a “moratorium” of the discussion on how to reach “balanced
social mixtures” (cp. Bartelheimer 1998).
In Germany, housing policy in general as well as subsidies for social housing, in the first pla-
ce, have never been targeted at particularly disadvantaged groups. Rather, state support for
the construction of housing has always been, in foremost, meant for “broad strata of the
population”. A proof of this basic idea might be seen in the fact that income ceilings for the
allocation of social housing were so high that, at times (during the 60s and 70s), 70% of the
population was allowed to rent social housing. At present, the ceilings still allow access to
social housing for approx. 40%; the income ceilings are laid down in § 25 of the 2nd Housing
Construction Law, they can be significantly exceeded for a number of specific ways of subsi-
dizing social housing. From time to time, every 4 years on average, the income ceilings are
adjusted. The last adjustment was made in 1994. Once a household has moved into a social
home, he is allowed to stay in it even when his income has risen (from a certain level of in-
come upwards an additional rent tax, called “Fehlbelegungsabgabe” has to be paid).
Anyone who wants to rent or buy a home subsidized under social housing regulations will
have to apply for a certificate of entitlement (Wohnberechtigungsschein) at the local housing
office. This will be granted when the household income of the applicant is below the income
ceiling valid for the specific type of funding scheme. Landlords of social housing can only ac-
cept applicants as tenants who possess such a certificate (exemptions in special cases are
possible but have to be approved by the housing office).
Generally, landlords are free to select from all applicants who hold a certificate of entitlement
of their choice. This selection process can, nevertheless, be restricted by special legal regu-
lations for areas with increased housing need (§ 5a Housing Obligation Law, Wohnungs-
bindungsgesetz).11 In these areas municipalities have nomination rights and landlords are
11 Such regulations at present have been introduced in six from 11 West German Bundesländer (Bava-
ria, Hamburg, Hesse, Lower-Saxony, North-Rhine Westphalia and Rhineland-Paltinate), but only in one
of the East German states (Brandenburg), where social housing does not play an important role.
only allowed to choose one applicant out of three who are named by the local housing office.
Such nomination rights (triple suggestion) can also be achieved by additional subsidies from
municipalities for the construction of social housing (§ 4 Section 4 of Wohnungsbindungsge-
setz) or through contractual agreements. Moreover, legislation on Bundesländer-level can
also link subsidies for social housing with a direct allocation right in which the housing office
can propose only one home-seeker who has to be accepted by the landlord as tenant (single
suggestion) as long as there are no severe reasons for refusing a tenancy (e.g. rent arrears
and eviction of this household in the past). Such regulations have been existing in North-
Rhine Westphalia, Germany’s most densely populated federal state ,for many years, provid-
ing municipalities with allocation rights for social housing during 15 years after the construc-
tion. The city of Stuttgart, for example, has even acquired allocation rights for a 40 years pe-
riod by additional municipal subsidies to the construction of social housing.12 Some cities
(most prominently Bremen and Berlin) have signed contracts with a number of owners of so-
cial housing in which these promise to let a fixed quota or a fixed number of vacant dwellings
per year to specific groups including homeless people and other people in urgent need of
housing. The municipal practice in this respect varies considerably.
Subsidies for social housing do generally oblige landlords to demand a rent below a certain
limit. The basic structure of financial support for social housing is that part of the building
costs is covered by loans at below-market rates or by subsidizing the expenditure on interest
rates for bank credits and own capital (Aufwendungszuschüsse).
Depending on the specific form of funding, the landlord is obliged to demand either a con-
trolled social rent which is calculated according to building costs minus the financial effects
of the subsidies provided (“cost related rent” or Kostenmiete) or (lately much more common)
a maximum rent which is contractually agreed. In both cases rents are significantly lower
than those of the privately-financed homes. On the other hand the rent level in social hous-
ing is such that a quarter of the tenants can only afford it with additional support by housing
benefit (which is available for tenants of social housing in the same way as for tenants in the
Lately, income related rents are increasingly introduced. Often degressive subsidies lead to
“built in” rent increases within a time period. Social rents are not uniform but depend on the
respective building costs and funding regulations at the specific time and in the specific re-
gion of the construction of individual projects. This also results in considerable rent differ-
ences which are not legitimised by differences in quality and location of dwellings.
Sale of social homes to tenants is, in general, only possible when the social obligation period
(and the state subsidy) has run out and the respective dwellings do no longer have the legal
status of social housing. Additionally, a specific administrative permission is needed for the
conversion of a block of rented homes into individual dwellings for owner occupation in order
to sell them. In East Germany, the acquisition of municipal dwellings by the tenants is sup-
ported by governmental allowances.13
12 On the different ways of acquiring nomination and allocation rights for municipalities and on the ex-
tent of use made of these opportunities to procure access to normal housing for disadvantaged groups
cp. Busch-Geertsema, V./Ruhstrat, E.-U. 1994, p. 141ff.:
13 cp. Überblick über die Förderung des Bundes in the appendix, I,3
Participation of tenants in the administration of social housing is, if at all, found in housing
Housing policy in Germany is a common task of Central government, governments of the fe-
deral states (Bundesländer) and municipalities. Central Government is responsible for the
national framework, e.g. by basic legal regulations and is supporting financially the acquisi-
tion of owner occupied housing, the construction of rented housing, the renovation and resto-
ration of housing stock and the construction of additional dwellings in the existing stock (e.g.
converting existing buildings or by creating new attic flats). Further Central Government sup-
ports the housing specific savings system and provides 50 % of the costs of the provision of
The main responsibility for financing housing programmes is nevertheless at the level of the
Bundesländer. They have their own support programmes, their own legislation on housing
affairs and specific regulations to administer national legislation. The administration of hous-
ing affairs is a common task of municipalities and Bundesländer. The Länder-governments
co-finance 50 % of housing benefit costs and their share of financial subsidies for construct-
ing social housing is much higher than that of Central Government.
Municipalities play an important role for local housing policies, they are owners (or share-
holders) – like some of the Länder as well – of housing associations and they (sometimes)
top up subsidies provided by Central and Länder governments by own municipal financial
means. They are also responsible for influencing and controlling the allocation of social
housing and they are responsible for developing new sites for the construction of houses.14
- On the level of national government the main competences are concentrated at the Federal
Ministry of Transport, Building and Housing (Bundesministerium für Verkehr, Bau- und Woh-
- On the level of the 16 federal states (Bundesländer) there are 16 different ministries which
are responsible for housing affairs and which have quite great autonomy and influence on
housing policies because of the strong federal structure of the German Republic. In some
Bundesländer separate housing ministries can be found15, in others responsibilities for hous-
ing affairs are subject of ministries for social affairs or of ministries of the interior.
- Former non-profit housing societies are organised in a national federation (GdW, Bundes-
verband deutscher Wohnungsunternehmen e.V.), which is the biggest federation of housing
enterprises in Germany: It speaks for about 3,000 companies administering about 7 million
14 The distribution of tasks in housing policies and their legal basis in the German constitution is de-
scribed in Expertenkommission Wohnungspolitik 1995, chapter 10 and in Hamm 1996).
15 The housing ministry of the biggest Bundesland (North-Rhine Westfalia) has just been reorganised
from Ministerium für Bauen und Wohnen (Ministry for Building and Housing) into Ministerium für Städ-
tebau und Wohnen, Kultur und Sport (Ministry for Urban Development and Housing, Cultural Affairs
dwellings, has a broad ranges of services for its members, its own publication series and
does intense lobbying on all levels
- Private home owners and landlords are organized on the national level in an organisation
called Haus & Grund Deutschland. It also provides a wide range of services for their nearly 1
million members, including advice, insurance policies, information services, seminars and
- The national federation of most local tenants organisations is Deutscher Mieterbund and
provides cost free advice for members and a range of further services (handbooks, insur-
ance etc.), lobbying.
- The national coalition of service providers for the homeless (Bundesarbeitsgemeinschaft
Wohnungslosenhilfe e.V.) has members mainly in the voluntary sector (most of them provid-
ing services and running institutions for single homeless people) but also some municipali-
ties are members. The origins of this organisation are in the support system for single “per-
sons with an unsettled way of life” (“Nichtsesshafte”) but nowadays the organisation I has
been lobbying for all homeless groups (including homeless families) resp. the service pro-
viders working with them. BAG Wohnungslosenhilfe runs its own publisher, publishes a quar-
terly journal (“wohnungslos”), organises conferences and is engaged in lobby activities.
6 Special Programmes / Restrictions
An important programme on the federal level is the scheme "Experiments in urban develop-
ment" (Experimenteller Wohnungs- und Staedtebau, EXWOST) run by the Federal Ministry
of Transport, Construction and Housing Affairs. A range of research areas were formed in
the framework of this programme and a lot of model projects were tested in practice and
evaluated scientifically.16 Among the many themes taken up by this programme were “Rede-
velopment of Large Housing Estates”, “Elderly People and their Living Quarters”, “Living Si-
tuations of Single Parents and Single Pregnant Person in Crisis” as well as “Permanent
Housing Provision for the Homeless”17. Within the programme no wide reaching funding of a
great number of projects all over Germany is possible but it is mainly targeted at testing in-
novative solutions to specific problems. The running Central Governments’ programme cal-
led “Inner City Areas With Special Development Needs – Social City” has already been men-
16 Themes and results of the research areas can be found in the Internet under http://www.bbr.bund.de.
17 The conception of this research field realised that a prerequisite for an integration of homeless peo-
ple is to provide them with normal and cheap housing at normal building standards, with usual tenancy
agreements, situated in non-stigmatised surroundings. This was one of the basic requirements for the
selection of pilot schemes. In addition, the projects were to be of manageable size and combine hous-
ing provision with further assistance in social integration. Special housing (like low-standard housing,
temporary accommodation etc.) was explicitly ruled out. To be included into evaluation, the pilot sche-
mes also had to present innovative institutional and financial approaches (for further details see Busch-
18 For further information, see http://www.sozialestadt.de
Similar programmes exist in various federal states on regional level. Apart from that North-
Rhine Westphalia has been running a regional model programme called “Prevention of Ho-
melessness – Securing Permanent Housing” which entails a range of single projects (not
including construction projects) which has been funded by an annual budget of DM 4 million
(roughly 2 million €) since 1996. Funding is focussed on the improvement of prevention of
eviction, on support projects to promote access to normal housing for homeless people and
other people in urgent need of housing and to outreach services as well as counselling and
health support for the same groups.
Foreigners who have gained permission or are allowed by law to live in Germany (which is
not the case e.g. for asylum seekers and refugees with restricted residence permits or con-
nivance, but which is the case for immigrants who have been granted asylum and for refu-
gees with long-term residence permits; of course it is the case for all foreigners coming from
other EU-countries) are eligible for social housing as well as for housing benefit (as long as
their incomes fall below the respective income ceilings). Special initiatives to provide housing
for immigrants were – if at all - taken at municipal levels. But in the past there was special
funding available from the Credit Institute for Reconstruction for financing permanent hous-
ing for repatriates and set up temporary accommodation for different groups of immigrants.
According to § 26 of the 2nd Housing Construction Law, a certain priority should be given to
subsidise “… the construction of housing for pregnant women, families with many children,
young couples, single parents with children, elderly people and the disabled”. But “targeting”
resources was in the past mainly practised by giving preference under the normal subsidy
procedures for social housing for projects which focussed on the provision of specific target
groups (especially for elderly people but also for single parents, and in a few exceptional ca-
ses, for the homeless). But to know more about that further inquiries at the Federal and State
Ministries would be required.
In its annual household plans for subsidizing social housing Central government has ear-
marked DM 50 million (roughly 25 million €) per year for projects to combat homelessness
since 1995. It remains largely unclear, what and how much has been achieved by this deci-
sion in practice on the level of Bundesländer and municipalities.
v. Aken, J.C./Derleder P. (1994) Rechtliche Aspekte und Rahmenbedingungen im Zusam-
menhang mit der Wohnungsnotfallproblematik, in: Busch-Geertsema, Volker / Ruhstrat Ek-
ke-Ulf (1994), p. 207-243.
Avramov, D. (ed.; 1998) Youth Homelessness in the European Union, Brüssel (FEANTSA)
Balchin, Paul (Hg., 1996) Housing Policy in Europe, London und New York
Bartelheimer , Peter (1998) Durchmischen oder stabilisieren? Plädoyer für eine Wohnungs-
politik diesseits der „sozialen Durchmischung“, in: WIDERSPRÜCHE, Heft 70, Dezember
1998, p. 45-67.
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Deutschland am Jahresende 1990. Ergebnisse eines Ost-West-Vergleichs, in: Informationen
zur Raumentwicklung, Heft 5/6, p. 277-300.
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Mietenbericht 1999 (Internet-Download: http://www.bmvbw.de )
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Germany. National Report 1995 for the European Observatory on Homelessness, Brüssel
Busch-Geertsema, V. (1999) Homelessness and Support in Housing in Germany. Solution or
Part of the Problem? National Report 1998 for the European Observatory on Homelessness,
Busch-Geertsema, Volker / Ruhstrat Ekke-Ulf (1994) Wohnungsnotfälle – Sicherung der
Wohnungsversorgung für wirtschaftlich oder sozial benachteiligte Haushalte, ed by. Bundes-
ministerien für Raumordnung, Bauwesen und Städtebau and für Familie und Senioren, Bonn
CECODHAS (1995/1996) Les européens et leur logement. L’Observatoire Européen du Lo-
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Edgar, B./Doherty, J./Mina-Coull, A. (1999) Services for Homeless People. Innovation and
Change in the European Union, London
Expertenkommission Wohnungspolitik (1995) Wohnungspolitik auf dem Prüfstand (im Auf-
trag der Bundesregierung), Tübingen
GDW, Bundesverband deutscher Wohnungsunternehmen (ed. ;1998) Ueberforderte Nach-
barschaften. Zwei sozialwissenschaftliche Studien ueber Wohnquartiere in den alten und
den neuen Bundeslaendern im Auftrag des GdW (empirica, StadtBuero Hunger), Ko-
Ghékière, L. (1997) Allocation of social housing in Europe, in: Parmentier, C. (ed.) Third In-
ternational FEANTSA Congress. Where to sleep tonight? Where to live tomorrow. Orienta-
tions for future action, Brussels (FEANTSA), p. 39 – 67
Haffner, M.E.A./Dol, C.P. (Authors; 2000) Housing Statistics in the European Union 2000, ed
by Ministerie van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer, NL (data com-
piled by OTB Delft) La Hague (see under http://www.euhousing.org) )
Hamm, Hartwig (1996) Der ordnungspolitische Rahmen für die Wohnungswirtschaft, in Jen-
kis, Helmut w. (Hg.) Kompendium der Wohnugnswirtschaft, München, p. 144-158.
Kleinmann, M. (1996) Housing, Welfare and the State in Europe: A Comparative Analysis of
Britain, France, and Germany, Cheltenham (UK) / Brookfield (USA)
Maclennan, D./Stephens, M./Kemp, P. (1996) Housing Policy in the EU Member States (on
behalf and edited by European Parliament, DG 4 Publications, Directorate General for Re-
search, Working Document, Social Affairs Series – W 14 – ), Luxemburg (see:
Statistisches Bundesamt (1995) Fachserie 5, Bautätigkeit und Wohnungen. 1%-Gebäude-
und Wohnungsstichprobe 1993, Heft 2, Wiesbaden
Tomann, Horst (1996) Germany, in: Balchin, p. 51-66.
Ulbrich, R. 1991. Wohnungsmarktsituation in den westlichen Bundesländern, in: Wohnungs-
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Ergänzungserhebung, Teil 1: Haushalte und ihre Wohneinheiten, in: Wirtschaft und Statistik
10/1999, p. 780 – 786.
1. Table: Haushalte nach Haushaltsstruktur und Art der Nutzung der Wohneinheit, from Win-
2. Extraxct from: Expertenkommision Wohnungspolitik 1995, p. 64 – 73
3. Überblick über wohnungspolitische Finanzhilfen des Bundes, from Fischer-Dieskau, Per-
gande, Schwender:, Wohnungsbaurecht