"Reached at the Blind Alley"
State Expenditure on Rent Subsidies Highlights Need for Social Housing Expansion
Düsseldorf, Germany - The state of North Rhine-Westphalia (NRW) paid over 12.1 million euros for cold rent costs in October 2022 alone, according to statistics from the Federal Employment Agency. This figure, provided by the Industrial Union of Construction, Agriculture, and Environment (IG BAU), underscores the substantial amount spent by the state on rent subsidies in the region.
IG BAU Düsseldorf notes that aside from housing benefits, the state also covers accommodation costs for a considerable number of individuals, including the elderly with minimal pensions. Moreover, the organization stresses the importance of addressing the issue, stating that the state spends a significant sum on rent in Düsseldorf to enable people to live.
Tino Brünning of IG Bau argues that while rent support is essential, social housing units are a more cost-effective and inflation-resistant solution in the long run. He emphasizes that social housing units act as a rent price brake for the housing market. Unfortunately, federal and state governments have neglected social housing construction for decades, with NRW requiring an increase of roughly 4,200 social housing units by 2030.
Brünning warns that more apartments in NRW are at risk of losing their social housing status, leading to higher rental prices on the open market. To counter this, he urges federal and state parliamentarians to advocate for the construction of new social housing units. He points out that every new social housing unit created can save the state considerable sums on rent support in the long term.
The "Social Housing" alliance has called for a nationwide "Sofort-Budget Sozialwohnungsbau" of 50 billion euros, which Brünning supports. He emphasizes that the shortage of social housing units is not a problem for tomorrow but an urgent issue that requires immediate action.
Germany has recently introduced reforms and initiatives to increase the construction of social and affordable housing, with significant plans and measures at the federal level aimed at addressing the rising rent costs and housing shortage. These efforts are expected to positively impact social housing construction in NRW, particularly in its tight housing markets. The acceleration of building permits, reduced bureaucratic hurdles, and investment incentives should contribute to increased social housing supply and potentially curb rising rents in NRW cities.
- Tino Brünning suggests that, instead of solely relying on rent support, the construction of more social housing units could be a more cost-effective and inflation-resistant approach for long-term wealth management in the housing market.
- Brünning argues that social housing units can act as a 'real-estate' price brake, helping to reduce rental prices for residents in the residential housing market.
- The call for a nationwide "Sofort-Budget Sozialwohnungsbau" of 50 billion euros, supported by Brünning, aims to address the immediate need for an increase in social housing units in Germany, especially in areas with a tight housing market like North Rhine-Westphalia (NRW).
- To lower the state's expenses on rent subsidies, prevent the loss of social housing status in NRW, and improve personal-finance situations for many individuals, Brünning urges federal and state parliamentarians to prioritize the construction of new social housing units.
