Berlin allocates 320 million euros for new housing subsidies

On March 25, 2014, the Berlin Senate decided to reintroduce social housing subsidies for new construction. A 320-million-euro fund will finance the construction of affordable housing over the next five years. The target is around 1,000 new rental apartments per year.

The terms

Initial net cold rents for subsidized apartments are to range between 6.00 and 7.50 euros per square meter. One third of the apartments must be offered in the lower price bracket at 6.00 euros. A valid housing entitlement certificate (Wohnberechtigungsschein) is required for tenancy. Projects within the S-Bahn ring will be given priority to counteract the displacement of lower and middle-income residents from the city center.

Open to private investors

Senator for Urban Development Michael Mueller emphasizes that the program is not limited to municipal housing companies. Private developers and investors can also participate. State subsidies make it possible to realize projects that would be difficult to finance under pure market conditions. Subsidized new developments may be particularly attractive in central boroughs like Mitte.

Context

The subsidy program is part of the simultaneously adopted urban development plan Wohnen. This plan projects an additional demand of 137,000 apartments in Berlin by 2025. The market development of recent years has shown that the open market alone cannot meet demand in the lower and middle price segments.

Open questions

One of the biggest challenges remains the availability of building land. The Senate is planning up to 4,700 apartments on Tempelhof Field. Whether the site can actually be developed depends on the outcome of a referendum scheduled for May 25. The availability of suitable land will determine whether the housing subsidies achieve their intended effect.