German Government Revives Subsidies for Affordable Housing
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Loading... - Rafael Krause
- 27 Jun 2024
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In an attempt to tackle the housing crisis, the German government is set to reinstate a housing policy reminiscent of one discontinued in the 1990s, aiming to incentivize landlords to offer affordable rents. This initiative has sparked widespread debate across the political landscape.
Subsidy Scheme for Landlords Announced
Klara Geywitz, the German Housing Minister representing the SPD, unveiled the coalition government's plan to introduce a new housing policy. This policy, if approved, would provide subsidy payments to landlords who commit to offering rental units at rates below the local market average. The proposed "Wohngemeinnützigkeit" (common good housing) legislation is slated for a vote on June 12, as part of the annual tax bill.
Under this policy, private companies, housing associations, and charities that provide affordable housing to low-income tenants would be eligible for tax breaks ranging from €1,000 to €2,000 per housing unit. While the specifics of what constitutes "affordable rents" were not detailed, Geywitz indicated that the policy's income thresholds would allow approximately 60 percent of German renters to benefit. "In addition to social housing construction, we are establishing a robust second pillar for more affordable housing in Germany with the common good housing law," Geywitz remarked to the Stuttgarter Zeitung. "This is a significant victory for all tenants."
Political Backlash and Concerns
Despite its potential benefits, the proposed housing policy has faced criticism from various quarters. CDU politician Ulrich Lange, speaking to Mediengruppe Bayern, cautioned that the new system might be susceptible to misuse due to the absence of a robust bureaucratic framework to prevent exploitation by companies.
Geywitz expressed her satisfaction with the progress of the project, emphasizing its importance within the coalition agreement. However, voices from the Greens, the Left Party, and the German Tenants' Association have highlighted the government's unfulfilled promises regarding new housing investment subsidies outlined in the coalition agreement.
