Anyone looking for accommodation in Germany’s major cities these days will quickly realize that affordable housing is no longer a matter of course – in hotspots such as Frankfurt or Munich, even the surrounding areas are becoming increasingly unaffordable and Germany’s capital, Berlin, also seems to be following this trend.
The lack of living space is not a modern phenomenon – even in the Middle Ages, anyone who could afford it tried to get hold of one of the coveted places within the safe city walls, where there was no danger from enemies or wild animals. Even if today hardly anyone is looking for living space in the big cities that are bursting at the seams, even then the prospect of work and access to infrastructure were decisive reasons for turning one’s back on the countryside. With higher earnings as well as culture, entertainment and cuisine – not to mention medical care – the quality of life also increases, until a shortage arises and it becomes increasingly difficult to afford the advantages of city life.
When do we speak of a housing shortage?
The definition of a housing shortage can easily be derived from the shortage of other everyday goods – if the supply of housing is significantly lower than demand, rental and purchase prices for properties will rise. Conversely, if demand is lower than supply, we speak of a vacancy and properties remain unoccupied.
Where is there a housing shortage in Germany?
Whether there is a housing shortage and where it is concentrated can vary greatly within a national territory – in Germany, property prices are rising continuously, particularly in large cities and municipalities with attractive employment opportunities – sometimes to unrealistic levels.
If we look at the statistics on gross rent by federal state, Hamburg is the most affected by the housing shortage, closely followed by Bavaria and Berlin. It remains to be seen whether this will change as a result of the increasing number of people working from home. Solutions to the housing shortage problem can only be found on an individual basis and adapted to the location, as the reasons for the housing shortage in Munich or Stuttgart, for example, cannot be fully compared with those in Hanover or Cologne.
What is the situation in Berlin?
Even Germany’s largest city is not big enough to accommodate all of its residents in need of housing – a glance at the statistics reveals that the population has grown about twice as fast as the available living space in recent years. Berlin is one of the cities most affected by the housing shortage in Germany – so much so that expropriations are already being considered in order to create more social housing.
The causes of the housing shortage in Berlin
It is not only the sluggish progress in housing construction, but also the increasing number of square meters per person that is exacerbating the situation. The amount of living space required per person is increasing year on year and is considered one of the main causes of the housing shortage. Some well-off single people are treating themselves to a luxurious penthouse with a spacious roof terrace, while families continue to live close together. The number of single households is rising steadily and has already overtaken that of multi-family households some time ago.
Another reason for the housing shortage in Berlin is the lack of capacity at construction companies, which are already working at the limits of their capacity. Building and land prices are significantly higher than they were a few years ago, which is why potential developers are reluctant to build.
The consequences of the housing shortage in Berlin
Rising rents can be observed almost everywhere where there is a housing shortage, with the associated higher burden on residents, especially pensioners and families. If a considerable amount of income has to be spent on rent payments, there is less left for private consumption and retirement savings. More households are therefore dependent on long commutes, resulting in less free time and increasing mental stress. The quality of housing is also declining, as landlords do not have to worry about finding a tenant regardless of the condition of the property.
In addition, what has long been the city’s defining feature – its lively and internationally renowned cultural and art scene, which previously benefited from low rents – is suffering in Berlin. The German capital is in danger of losing its status as a hotspot for creatives and start-ups to other, more attractive locations as a result of the housing shortage.
What could be solutions to the housing shortage?
It is often easier to look for the reasons than to find solutions. What is certain, however, is that politicians have long failed to pay sufficient attention to housing construction, particularly in the social sector.
New residential construction - but where?
Basically, the answer to the question of how to eliminate the housing shortage is simple: more housing needs to be built. But easier said than done, creative ideas and measures are needed these days to counteract the shortage of living space. Suitable and free spaces are rare – which is why supermarket or parking lot roofs, for example, should also be considered. If these building potentials are used effectively, cities would continue to grow in height, but could provide space for a considerable number of apartments.
Shared Spaces
As part of the sustainable development of urban spaces, more emphasis should also be placed on alternative ways of living together in the city – one potential solution to the housing shortage would be to rent out only the most important living spaces such as bedrooms and bathrooms to individuals, while kitchens and living rooms are used communally. Such shared spaces are particularly well-known in Asia and could help to ease the pressure on the housing market. However, it remains to be seen whether Berlin’s high earners will give up the luxury of individually used rooms for a shared flat-like lifestyle.
Intelligent urban planning
However, experts agree on one thing: the urban planning of the future must be intelligent and public transport must take on a more prominent role compared to cars, if not replace them completely. After all, parking lots continue to take up a lot of space that could otherwise be used for housing. Singapore is often cited as an example of intelligent urban planning, but Vienna can now also be described as a smart city in many areas.
Expropriation of private-sector housing companies
One certainly very drastic measure against the housing shortage in Germany is the expropriation of private homeowners with more than 3,000 apartments in return for compensation, which is supported by the initiative “Expropriate Deutsche Wohnen & Co – Combat Speculation”. However, there are already discrepancies in the compensation for the companies affected, which would amount to a two-digit billion sum in any case. Couldn’t this money also be used to build new apartments? After all, a successful expropriation initiative would certainly cause investment in the Berlin real estate market to collapse and possibly exacerbate the situation further. However, as there has never been a comparable scenario to date, the consequences are difficult to assess.
Conclusion
Opinions are divided on the issue of affordable housing and a suitable solution for everyone still seems a long way off. However, the many sustainable ideas and role models – also from other countries – give reason to hope that the situation in Berlin will ease and housing will become more affordable again – for everyone.
Frequently asked questions
What is the rent burden ratio and how high is it in Berlin?
The rent burden ratio is used as a key figure to determine how high the proportion of a private household’s income is accounted for by rent. The trend in Germany’s major cities is rising continuously and is currently between 40% and 50%.
Where is a good place to live in Berlin?
The most popular districts in Berlin include Berlin-Mitte, Prenzlauer Berg, Kreuzberg and Friedrichshain, all of which are struggling with rapidly rising rents and purchase prices. On the other hand, life is (still) somewhat cheaper in Neukölln or just outside the city center.
