200 million euros for public housing

Saxony is providing nearly 200 million euros in funding for social housing construction. Just under a third of this amount is earmarked for the construction of 740 new apartments in Leipzig and Dresden, while the remaining funds are available for the modernization of 1,600 apartments throughout Saxony, according to the State Ministry of Development. Compared to 2025, the total has increased by more than seven million euros. The subsidized apartments may only be rented to individuals or households that hold a housing eligibility certificate.

New Construction to Address Housing Shortages in Leipzig and Dresden

According to the report, about three-quarters of the total comes from the federal government, with the Free State of Saxony contributing the remaining quarter. The funding provides a clear incentive for investors, said State Minister of Development Regina Kraushaar (CDU). “There is one thing above all that helps combat the housing shortage in major cities: building more again.” At the same time, she noted, the age-appropriate and energy-efficient modernization of existing housing is important in light of Saxony’s demographic trends. The funding also sends a positive signal to the construction industry. 

Funding Set to Grow Significantly

At the end of 2025, there were approximately 14,300 rent- and occupancy-controlled apartments in Saxony’s municipalities—a good 500 more than a year earlier. There are plans to significantly expand funding for social housing construction. The government’s draft budget for the next two years allocates 473.6 million euros—nearly 190 million euros more than the current amount. The majority of the funds will continue to come from the federal government, which has increased its allocations. Saxony’s share is set to grow from 67.2 to 111.8 million euros.