Federal housing association is scheduled to start in 2027

It was one of the central issues in the election campaign for the Berlin House of Representatives, but goes far beyond the capital: the lack of affordable housing. The Left Party - winner of the vote - wants to combine large private housing companies - a measure that the Federal Construction Minister rejects.

Verena Hubertz is instead relying on a federally owned housing association - and has now fleshed out her plans for this. In an interview with the t-online portal, the SPD politician announced that the project planned by her and Finance Minister Lars Klingbeil should be launched in 2027.

Federal government 51 percent, external 49 percent

“We will present our concept in the fall and then get started with it as quickly as possible.” It is important to her that it is a lean structure, not an authority. “We have enough of that,” said Hubertz. "We don't want to start a new construction company, but we want to work with our partners on the market in order to fully utilize the factories to capacity with our orders."

The plan is for the federal government to hold 51 percent of the shares, with 49 percent held by external parties. “The federal government’s partners can be from the private sector or municipal and state-owned housing associations,” said Hubertz.

"We as a federal government can award orders on a large scale and thereby achieve a price advantage. We also have the AAA rating, which we use for top financing conditions." A AAA rating is the highest credit rating that a rating agency can give.

Economists view plans with skepticism

Criticism of Hubertz and Klingbeil's plans comes from economists: The project poses "major constitutional risks" because, according to the Basic Law, responsibility for housing construction lies with the states, not the federal government, warned the Institute for Macroeconomics and Economic Research of the Hans Böckler Foundation (IMK) in a study. Instead, the federal government could set up a new funding pillar, for example through the KfW for low-cost housing.

The study authors, IMK director Sebastian Dullien and the former Berlin finance senator Matthias Kollatz, consider the plans to be questionable. Instead, they suggest that housing companies could receive government loan guarantees or a direct loan from the state beyond social housing, which is already heavily supported. In return, they would have to commit to offering affordable rents.