Sunday, September 6, 2020

Germany and Public Housing

I could make this a 40-page essay, but I'll try to limit this to 80 lines and simply hit the high-points.

If you wanted to see public housing projects that worked....and still work today (in terms of economics and functionality), then go to Vienna.  They started some housing in the 1920s and 1930s, then after WW II....it went into what I'd call a turbo-era.  Nothing fancy.....no real improvements on the exterior....just plain regular housing, and the rent established by city is by your pay situation. 

So, the German story.

They also went by the 1920s and 1930s plan.  This was probably one of the few Nazi programs that functioned and delivered.  After the war?  You can go and view tons of projects done on the West German side....say from 1946 to the late 1960s, with pride.  In DDR (old East Germany), after the war?  A lot of Germans will chat over crappy and monstrous building....which had at least a 40-year life span.

The West German path?  Toward the 1980s.....public housing had a rule or two changed by the national government, where cities (they were the managers over public housing)....could sell the properties off. 

Reason?  What it comes down to....they could see issues arising down the path where the rent coming in....would not be capable of paying for the cost of renovation (you can figure every 30 years....new windows, new paint-job, new roofing, etc).  The philosophy was developed where commercial companies would do a better job....improve the rent (raising it).....and have the capital to make improvements.  Yes, political groups wouldn't get in front of people and demand higher rent.

The negative to this?  None of the political parties wanted to stand there and admit to renters....the renovation bucket was not capable of doing the work required. 

So what happened?

Commercial companies paid for the properties....in some cases, hundreds of buildings around major urban areas.

Some buildings went to renovation schedules.  As time went by....companies found that you had to raise the property rental cost so high....that it only made sense to convert it to condos.  Well....that condo pricing went way beyond what regular people could pay.  Even if they kept it as a apartment.....the rent would end up going from 500 Euro a month....to 1,200 Euro a month.  Even that type of situation became impossible.

So when you go into Bremen, Frankfurt, Berlin or Leipzig today....there's a housing shortage problem....because affordable housing doesn't exist.  On top of that....public housing (like you see in Vienna)....doesn't exist. 

Getting the CDU or SPD parties to resolve this?  How?

You would need tens of billions, and basically buy up all the housing they sold thirty years ago. 

Buying up property on the outskirts of cities, and just starting housing projects?  All of this acreage would have to be either forest areas or farm-land.  Environmentalists being happy over that?  No. 

So this brings everyone to this hot political topic.....if you live in a highly urbanized area....then the cost of housing is a top-five problem.  For politicians, it's a discussion they really don't want to engage upon.  If you live thirty kilometers away from a urbanized area...in a small rural village....you won't even rate this as a top-500 problem.

Only going to increase?  Well....yeah, that's the chief issue.  At some point in the next couple of years, I expect some younger folks (in their mid-20s) to start going toward RV living and finding open areas around cities like Frankfurt or Berlin, to park their RV. 

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