AFFORDABLE RENTS? A STATE OF EMERGENCY INTENSIFIES
Rents explode in cities after massive sales of public housing to brutal investors. Affordable housing is in short supply. Something must happen quickly.
By Werner Rugemer[This 2018 article published in verdi.de is translated abridged from the German on the Internet. German politicians make pilgrimages to Vienna and are astonished how the city creates affordable accommodations.]
In 1987, there were 5.5 million social apartments in the old Germany. Today, there are only 1.5 million in all Germany. Every year, 100,000 of them lose their rent ceiling and hardly any new affordable units are built. The need today is far greater than in 1987 on account of the low-income trend, the low upper-rent limits for Hartz IV recipients, the significantly higher energy costs and rent explosion in the population centers. Since 2014, the number of homeless in Germany has doubled to 860,000. Investors go unpunished when they force modernizations with criminal methods. They also go unpunished for the abuse of raising rental prices on tourists.
The Great Coalition admitted its 2015 rent brake did not control the rents. Quite the contrary! Interior minister Horst Seehofer, CSU, with German chancellor Angela Merkel, CDU, is preparing a “Housing Summit” in the chancellor’s office for September 21. The Advisory Board of the German economics ministry published an expert opinion with the misleading title “Social Housing Policy.” Professor Friedrich Breyer from the Thurgauer Economic Institute at the University of Konstanz is in charge. The institute is sponsored by a Swiss bank.
A neoliberal confession
The 38 professors on this board summarized their neoliberal creed. Social housing accomplished nothing and should be ended. The rent brake changed nothing, cannot be improved and should be rescinded. “Market interventions are counter-productive.” Release or deregulate the market! Then the conventional demand that is even counter to the market: Increase the housing subsidies!
The Great Coalition wants to help some higher-paid to apartments of their own. The distribution of modernization costs will be lowered from 11% to 8% per year. Seehofer’s
proposals to “de-bureaucratize” permissions were applauded by the FDP. The causes of the state of emergency lie deeper; it is the result of three decades of privatization mania. The CDU/ CSU/ FDP government under Helmut Kohl abolished nonprofit housing cooperatives in 1988. Accelerated by the SPD/ Green government under Gerhard Schroeder, the state, territories and local communities sold hundreds of thousands of public apartments to brutal investors.
In 2012, the SPD Baden-Wurttemberg government sold 21,500 apartments. In 2013, Bavaria (CSU) sold 33,000 apartments. Now, Seehofer pretends to bail renters out of the housing crisis. In the meantime, capital organizers like Black Rock combine highly profitable companies. Vonovia is at the top with 400,000 rentals.
The Vienna example is different
Alternatives are possible in the middle of capitalism. For a long while, Vienna was an influx city. In 2017, the average rent was half the average rent in Munich. That was possible because only a third of the apartments in Vienna are subject to the free market. Vienna has over 900,000 apartments, 220,000 are direct public housing units, 200,000 are nonprofit housing enterprises and the rest have public rent ceilings. No apartments were sold. With foresight, the Vienna Housing Fund buys up possible development land… So land speculation is prevented. Vienna does not pay subsidies to renters like the German housing subsidy. Rather, all money is invested in “object promotion,” in building affordable apartments. Now, German politicians make pilgrimages to Vienna and are amazed.
What absurdity! The German government, territories and local communities proudly announced a 50-billion euro tax surplus in the first six months of 2018. The German state can take credits at zero-interest. In 2015, Matthias Gunther from the Pestel Institute made the obvious market-conforming proposal: the state should buy Vonovia. This would cost 20 to 22 billion euros. In this way, 400,000 apartments would be under public authority. Today, Black Rock & Co will not sell its cash cow after the Vonovia initial public offering. Still, expropriation could be possible on account of the national emergency, the anti-social conduct and compensation according to the German Basic Law. This could begin with a state blocking minority of 25 percent…
Investors profit with mail-box firms… Modernization costs are shifted to the renters. Nonprofit housing companies as in Dresden should be reestablished. The German real estate agency sold property to investors. That should change. Properties should only be sold when social housing is built…
Affordable housing is a human right
Secure and affordable housing is one of the universal human rights. Some politicians have a catch-up need here. They constantly demand observance of human rights in distant countries but put up with the housing emergency here… The local communities issue millions of housing vouchers – but do not have the necessary housing. The constitutional state must be helped to its feet.
Current governments lack insight. Housing initiatives are launched in many cities like Berlin, Frankfurt/ Main, Dresden and Osnabruck. In impoverished Germany after the 1st World War, local communities built hundreds of thousands of nonprofit apartments. Pressure from below was crucial.
RELATED LINKS: Subject promotion and object promotion
Norbert Haring, The market will not stop the rise of rents
Andre Holm, Renters pay the bill for failure of the market and the state
Tom Krebs, “More market is not the solution”
Tom Krebs, “More public housing is economically sensible”
Together against the rent Madness!