The Left Party in the Saxon state parliament has called for a change in the social housing system - "away from bureaucratic, inflexible application procedures towards a non-profit housing system". "Those who make a long-term commitment to social housing should be rewarded with tax breaks and preferential access to federal funding and public land," MP Juliane Nagel told the German Press Agency. In return, the companies should commit to purely cost-covering rent levels and profits must be reinvested. This type of non-profit housing already existed in Germany until 1990 and accounted for almost a third of the housing stock at the time.
"The city of Leipzig needs around 2,200 new social housing units every year to meet demand. But construction progress is far too slow," reported the MP from her home city. Only 2,294 social housing units have been added in Leipzig since 2017, compared to 1,074 in Dresden. The drawdown of funds for social housing subsidies paints the same picture. This is not only due to the fact that the Sächsische Aufbaubank is processing funding applications too slowly, but also to rising construction costs and interest rates as well as a lack of materials.
"For many developers, the funding conditions for the creation of tied rental housing are also far too complicated. Without supplementary funding, as in the city of Leipzig, the number of new social housing units would be even lower," emphasized Juliane Nagel. In Dresden, several social housing projects had been put on hold due to the difficult conditions. Lengthy approval processes would also delay construction, meaning that funds would be called up with a delay.
