Last night, I sat and watched a German public TV news documentary piece....on the lack of affordable housing. So for forty minutes, this crew follow around these three single Germans (all over the age of forty). The three had regular jobs, but after taxes were taken out.....they generally ranged from 1,300 to 1,500 Euro ($1,600 to $2,000 in US currency). Each was located in what you'd call a major urbanized city (Frankfurt, Munich, Berlin).
All three were stuck in what you'd call a YMCA-charity-run room deal (just a plain room, no kitchen or bathroom). You had a central shower down the hallway.
The lady in this group could afford 400 to 600 for a simple studio apartment, and had spent almost a year looking for one (she had lived with her mother until the mother died, and couldn't stay in the apartment because of the rental costs.....near 800 Euro a month). This lady was a cleaning worker, and took home around 1,300 Euro a month. No car. No serious debt. Just a limited income that could not be improved upon.
Moving out beyond the city limits? All of them could have done that, but signed up to an hour-plus each way on the way to work.
So the lack of simple basic studio apartments? Yes.
First, no one wants to build cheapo studio apartments because they really don't make that much in terms of profits.
Second, if you had open property (say three acres), the return value works only if you construct apartments that rent in the 1,000 to 2,000 Euro range.
When you look across at the city of Frankfurt (736,000).....there's probably 10-percent of this population who are happily employed but at the bottom of the wage ladder. These are people who will never be able to work and afford 1,000 Euro a month on rent.
The current political agenda (at least in Berlin) is the idea of seizing (via current laws on the books) housing (apartment buildings)....having them under a city agency....and renting out apartments at an affordable level (meaning the city is controlling rent). This idea is controversial and has several negatives attached.
The bigger of the negatives is that to make this work....at least in Berlin, you need to aim toward 500 buildings. Once seizure occurs, the general German law says you have to compensate the previous owner. Well, this Berlin plan suggests a minimum of 17-billion Euro (owners suggest it's closer to 35 to 40-billion). Berlin doesn't have the money, and the rental income won't begin to really cover the amount needed to make this plan work.
What needs to happen? I sat and watched the whole piece, and in my mind.....none of these people were looking for a standard 60-square meter apartment. They all wanted just a plain studio place with basic comforts (a bath, a kitchen, etc). You could easily come up with a standardized plan for a 40 square meter studio apartment complex, two stories tall, and built into a square (facing outwards), and build a major city park in the middle of this. It's the kind of thing that you could throw up a 1,000 apartment complex in a single year. Rent? Via a city agency, you'd just make up a percentage number of their income.
No, it doesn't fix everything, and for a family situation....a studio is definitely not the solution. But just two or three of these type complexes in Frankfurt, would help to reset the overall problem and lessen the current affordable housing crisis.
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