SPD Chatter on Housing

This weekend, the SPD Party came out with a document to hype up their solution for 'affordable housing'.  ARD covers most of the story.

If you live around major cities like Berlin, Frankfurt, Koln, etc.....you tend to notice rental costs for apartments is going up, and it's hard (impossible) to find two-bedroom place in the range of 600 Euro.  The public housing built  in the 1950s, 1960s, and 1970s?  Well...it's an interesting thing.  The owners of these properties sat on their apartment buildings for years, with no renovation. So in the past twenty years....as renovation occurred, the rent went up (easily going from 500 Euro up to 1,000 Euro in cases).

If you go around Germany, asking people about the problem....it tends to get ranked in the top issues very easily.  Course, if you live in a non-urban town of 4,000 residents....you don't see this issue very much. 

What the SPD came to suggest in their weekend hype....is a 'rent-stop' plan.  They want to pass a law which says if you own apartment buildings.....you will not be allowed to raise rent over the next five years except for inflation-related situations.  In this five-year period, they (the SPD and partners) want to encourage massive building projects and to create an abundance of housing in urban areas.

To get housing construction started?  The SPD wants cities to be able to charge additional taxes on unused building plots which are being held on speculation plans by private owners. 

Issues here?  There will be a massive backlash on the rent-stop idea by apartment building owners. Some have plans for renovation and they'd just go into a stall plan on those ideas because of the suggested change.

The speculation situation?  You can walk around Frankfurt and find literally hundreds of sites being held by some individual or group....waiting for the right price to come up.  If you attempted to triple up taxes on these people.....they'd go and put up some temp building and pretend it's meeting the regulation.....to avoid the taxes suggested.

Why isn't there more interest in building affordable rental buildings?  You go and look at the cost to build.....the cost of property....then look at the rent that you typically can charge, and you simply don't see an attractive property situation for a thirty-year period. 

People often bring up Vienna when in these discussions because the city there.....went into a massive building project (on their own) and built thousands of buildings over the past seventy years.  The city for the most part, holds ownership of those buildings.  There's rarely.....if ever....renovation done, but people don't care because the rental costs are so reasonable.

The odds of this SPD idea being passed by the Bundestag?  They probably will pass the rental-control of prices easily, but it'll get challenged in court.  As for the idea on taxing property held for speculation?  That will be challenged via court as well.