SHARE
COPY LINK

POLITICS

REVEALED: How Germany’s new government wants to tackle the housing crisis

The new German government’s plan to tackle the country’s affordable housing crisis includes a promise to extend the rent brake and build 400,000 new apartments each year. Here’s what you need to know.

Berlin at night
Germany's new government announced a range of new measures to restrict rental rises. Photo: Picture Alliance/DPA

On Wednesday afternoon, the three parties set to form Germany’s new governing coalition set out a roadmap for the next four years. 

Under the motto, ‘Dare to make progress’, the new coalition – nicknamed the ‘traffic light’ after the parties’ colours – released an 177 page document that sets out their vision for the coming years.

READ MORE: LATEST: Germany’s next government sets out roadmap for post-Merkel era

The document included policies put forward from all parties, including a pledge to tackle the country’s affordable housing crisis which the coalition defined as “the social issue of our time”. 

Under the plan, Germany will build 400,000 new flats each year, 100,000 of which will be publicly-funded social housing for people in lower income groups. 

The government said the plan will also boost the country’s construction industry. 

The party also plans to tighten the so-called ‘rent brake’, a federal law aimed at limiting the amount a landlord can increase the rent on a property. 

READ MORE: Germany’s coalition government to allow dual nationality

While the current law restricts rent rises to 15 percent over a three year period, the government’s new plan will be to restrict rises on rent to 11 percent in tighter housing markets, such as those in many of the country’s larger cities. 

Although further details of the proposal have yet to emerge, the 11 percent cap is closer to that put in place in the capital of Berlin in 2020, which was later overturned by the federal court. 

The federal court ruled that while rent restrictions of that nature were legitimate and could be implemented, this needed to take place at a federal rather than a state level. 

In order to account for rising costs of living, the government want to insulate lower-income families from “extreme fluctuations in housing and ancillary costs”. 

As a result, the government will make a one-off subsidy available for heating costs for low-income families. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

POLITICS

Scholz calls on coalition to ‘pull ourselves together’

German Chancellor Olaf Scholz on Saturday called on his fractious governing coalition to "pull ourselves together" following a dismal showing in EU parliament elections last week.

Scholz calls on coalition to 'pull ourselves together'

In power since the end of 2021, the three parties in government — Scholz’s Social Democrats (SPD), the Greens and the liberal FDP — have been at loggerheads on a wide range of issues including climate measures and budget spending.

“I think that this is one of the entirely justified criticisms of many citizens, namely that there is too much debate” within the coalition, Scholz told German television channel ZDF on the sidelines of the G7 summit in Italy.

“We need to pull ourselves together and stick together to reach agreements,” he added.

“The people have the right to demand that things change,” Scholz told public broadcaster ARD.

The three parties in the coalition suffered a severe defeat in the European elections, with the SPD achieving its worst result in a national election since 1949.

Subsequently, Scholz has faced mounting criticism within his own party.

On Saturday, however, Scholz told ZDF and ARD that he was “sure” that he would be the SPD’s next candidate for the chancellorship in the parliamentary elections scheduled for autumn 2025.

In the very short term, a new test awaits the coalition, which must reach an agreement on the 2025 budget by the beginning of July.

The FDP’s finance minister is opposed to any exceptions to the rules limiting debt and to any tax increases.

On the other hand, the SPD and the Greens are opposed to cuts in social welfare or climate protection.

The debate is also focused on increasing the resources allocated to the German army.

SHOW COMMENTS