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German government to subsidise landlords offering affordable rent

German government to subsidise landlords offering affordable rent

The German government plans to revive a new housing policy similar to one scrapped in the 1990s, which offers landlords subsidy payments if they charge affordable rent. Criticism has come from across the political spectrum.

Germany announces subsidy payments for landlords

German Housing Minister Klara Geywitz (SPD) has announced that the coalition government plans to implement a new housing policy, which would see landlords receive a subsidy payment if they permanently offer housing units below local rents.

The new “Wohngemeinnützigkeit” (common good housing) law will be voted on on June 12 as part of the annual tax bill. If it passes, private companies, housing associations and charities that permanently charge affordable rents to lower-income tenants will benefit from tax breaks of between 1.000 to 2.000 euros per housing unit.

While the definition of "affordable rents" was not explicitly stated, according to Geywitz, the tenant income limits included in the policy mean that around 60 percent of renters in Germany could benefit from the new law. “Alongside social housing construction we are creating a second, strong pillar for more affordable housing in Germany with the common good housing law,” Geywitz told the Stuttgarter Zeitung, “This is a good day for all tenants”. 

New rent subsidy policy criticised across the political spectrum

Yet to be set in stone, the new housing policy has already been met with criticism from all angles. Speaking to Mediengruppe Bayern, CDU politician Ulrich Lange said the new system would be “prone to abuse” since it was not accompanied by a new bureaucratic framework designed to prevent companies from exploiting the new scheme.

While Geywitz appended her announcement, saying she was “delighted that this important project from the coalition agreement has been successfully implemented,” politicians from the Greens, the Left Party and the German Tenants’ Association pointed out that the government is yet to deliver on new housing investment subsidies promised in the coalition agreement.

The 2021 agreement signed by the SPD, Greens and FDP states that the coalition will “promptly introduce a new non-profit housing scheme with tax incentives and investment subsidies”. 

In 2022, the federal government and the Alliance for Affordable Housing said it would invest 14,5 billion euros in social housing construction by 2026, with an annual goal of building 100.000 new social housing units. The government built just 23.000 new social housing units in 2023, only 500 more than in 2022.

Thumb image credit: Jojoo64 / Shutterstock.com

Olivia Logan

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