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An evaluation of the housing shortage summit at the Chancellery

Can policymakers solve the housing shortage?

Stephanie von Keudell
Stephanie von Keudell
independent journalist

Visitors who have been coming to the fair for many years were surprised at the lively start of the 21st Expo Real, with a throng such as had seldom been seen before. Even on Monday morning, the walkways were already crowded with visitors, and so many people were attending the discussion panels featuring high-caliber experts that seats were in scarce supply!

 

An evaluation of the housing shortage summit at the Chancellery

 

Not just once, but twice did the Expo Real Forum take up the topic of the housing shortage on Monday – from very different perspectives. Displaying the courage to make pointed statements, Dr. Andreas Mattner (President of the ZIA (German Property Federation)), Dr. Franz-Georg Rips (President of the German National Tenants Association) and Marco Wanderwitz (Parliamentary Undersecretary in the Federal Ministry of the Interior) discussed what might change in Germany’s building policy as a result of the new apportionment of political competency in the Federal Ministry of the Interior, Building and Community.

 

Great hopes had been placed on the housing summit held in the Chancellery in September, but its results failed to convince some of those involved in the discussion – quite apart from the fact that the proposals have not yet been implemented anyway. While ZIA President Mattner was in favor of, for example, a special depreciation allowance for the new construction of rental apartments, President of the National Tenants Association Rips remains skeptical and warns of a potential inflationary impact. He advocates increasing the regular depreciation rate from two to three percent for no other reason than the accelerated advancement of technology, which he says results in present technologies becoming more rapidly outmoded. This proposal, however, meets with opposition from the representative of the policymakers: Marco Wanderwitz points out that Germany’s states in particular are not wildly enthusiastic about having to shoulder additional costs. He considers adding stories to existing buildings and converting attics to be suitable ways of rapidly creating additional residential space. What’s more, Franz-Georg Rips argues in favor of cautiously reducing the housing eligible for financial support as he thinks the very generous living space hitherto seen in Germany will probably prove to be untenable.

 

He also broaches the idea of a tax on housing and considers an amendment of property taxes to be overdue (“Property tax reform is a wonderful example of the failure of our politicians, who have allowed decades to pass without accomplishing anything!”), while Andreas Mattner vehemently advocates less regulation. In particular, he opposes the demonization of the Share Deal and fears that building activity will diminish in the event that tax rates actually rise.

 

Bottlenecks in construction-industry capacity have already led to conditions similar to those in New York

 

Consensus existed primarily in the viewpoint that the factor limiting more new construction lay in the construction industry’s capacity – details were delivered by the subsequent panel focusing on residential properties. Facilitator Andreas Remien (editor of the Süddeutsche Zeitung) and panelist Utta Seidenspinner (author of Wohnungswahnsinn (Apartment Madness)) already discern conditions in Munich’s apartment market which are close to those in New York. Dr. Wulff Aengevelt (of Aengevelt Immobilien GmbH) calculates a deficit of at least 229,000 apartments in the Big Five – Munich, Hamburg, Berlin, Frankfurt/Main and Düsseldorf, because the building of new apartments in these cities has been put off for years and the public authorities have largely withdrawn as owners of residential property portfolios. Dr. Markus Cieleback (Head of Research at Patrizia Immobilien AG) agreed: “Adaptive processes in our industry take ten to fifteen years. This means we are now facing problems that were caused in the first decade of this century!”

 

According to Peter Jorzick (Managing Director at the project developer HamburgTEAM), however, intensified new construction in the cities fails not only due to the lack of forward-looking development of building land in major cities, but also simply to the exhaustion of the construction industry’s capacities, ranging from truck drivers to plumbers. “It is simply not possible to build more”, he warns, despite all state support.

 

Markus Cieleback sees one possible solution to the problem in building more simply and less expensively, e.g. by installing surface-mounted cables, and in constructing houses without a cellar, which is customary in other European countries. Due to the superabundant availability of capital, builders in Germany prefer to build luxury rather than cost-effective housing.

 

That is why the panel’s conclusions engender little optimism: in order for the experts to have confidence that policymakers will solve the housing shortage, the latter must reach agreement at the community, state and federal levels and substantially increase the speed of progress – rather than continuing to take three steps forward and two back as they have thus far.

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