Anticipates Expanded Deficit of Affordable Housing Accommodations According to IG Construction
In the face of the ongoing COVID-19 pandemic, Germany is grappling with a growing crisis in affordable housing. Robert Feiger, chairman of the trade union for construction, agriculture, and environment (IG BAU), has criticised the lack of action by the federal government, states, and municipalities in promoting affordable housing.
According to Feiger, the number of affordable housing units nationwide is expected to drop below 1.1 million by the end of the year. This alarming statistic follows an average annual loss of more than 43,000 affordable housing units over the past five years. The pandemic has further exacerbated the issue, contributing to a severe shortage of affordable housing.
Feiger predicts that tens of thousands of 'corona housing losers' will result from shrinking housing budgets. These individuals are at risk of losing their homes due to financial hardship caused by the pandemic.
The crisis is not only affecting the housing market but also the economic stability of the country. The number of low-income households in Germany is projected to significantly increase due to short-time work, layoffs, the expiration of temporary employment contracts, and the loss of mini-jobs.
The German government has responded to the pandemic with significant fiscal stimulus packages aimed at cushioning economic impacts. Measures included job and wage security programs and liquidity assistance for businesses. While not directly housing-specific, these economic supports help prevent further descent into poverty that pressures affordable housing demand.
However, the pandemic hit amid pre-existing structural economic vulnerabilities in Germany, including rising rent costs in major cities like Berlin, Munich, and Frankfurt, which reduce housing affordability for low-income groups.
To address the rise in low-income households and housing shortages in Germany triggered or worsened by COVID-19, the main proposed actions involve combining economic stimulus to protect jobs and incomes, expanded rental assistance, public-private partnerships to finance affordable housing projects, and regulatory reforms to speed up housing construction.
These multi-pronged strategies aim to stabilise housing access for low-income Germans and mitigate the crisis in affordable housing stock. The European Union has also highlighted the importance of targeted policies to support vulnerable populations in addressing housing affordability and availability issues worsened by the pandemic.
[1] KfW Quick Loan Program: https://www.kfw.de/kfw/en/coronavirus/quick-loan.html [2] Rising rent costs in major German cities: https://www.statista.com/statistics/1113271/average-rent-cost-in-germany-by-city/ [3] Increased public funding for rental assistance and housing vouchers: https://www.huduser.gov/portal/affordablehousing/rental_assistance.html [4] EU reports on housing affordability and availability issues: https://ec.europa.eu/info/publications/housing-market-reports_en [5] Collaboration between public and private sectors and streamlining construction processes: https://www.urban.org/urban-wire/housing-affordability-requires-public-private-partnerships
- In light of Robert Feiger's prediction of tens of thousands of 'corona housing losers', targeted financial support such as the KfW Quick Loan Program could provide much-needed relief for those at risk of losing their homes due to financial hardship caused by the pandemic.
- As part of the multi-pronged strategies to address the housing crisis in Germany, increasing public funding for rental assistance and housing vouchers, like those successfully implemented in other countries, could alleviate the financial burden on low-income households in the housing market and real-estate sector.
