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“We will find enough developers”

Housing construction in Germany is in a crisis – and the construction industry sees the Greens as partly to blame.

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“We will find enough developers”

Housing construction in Germany is in a crisis – and the construction industry sees the Greens as partly to blame. In Hamburg, too, the party is met with resentment, and it's not just about topics that have been discussed at federal level and that have long been decided, such as heat pumps and green roofs. Leon Alam worked for the Hamburg Greens on the new model of green urban development policy and explained how landlords should be held more accountable.

WELT AM SONNTAG: There was a lot of criticism after you passed the motion to realign green housing policy at the party conference - among other things because of the requirement that 50 percent of the apartments in certain projects should be socially funded in the future. Were you surprised that the headwind was blowing so hard?

Leon Alam: Housing is the crucial social issue in our city, which is why we are dealing with it so intensively. But it is also a very complex issue involving different actors with different interests. It is clear that our proposals will also be viewed critically. Due to the current situation, in which rents are constantly rising and in which the ancillary costs are exploding due to the energy crisis, we have decided to gear our housing policy even more towards affordable housing. We see that there is a danger that more and more people in Hamburg will no longer be able to afford the city. I wasn't surprised that this didn't meet with absolute approval everywhere.

WELT AM SONNTAG: The companies in the free housing industry say it would hardly be worth building apartments in Hamburg if the requirement for social housing was raised from one third to half. Do you think you will find enough prospects from the construction industry?

Alam: I believe that with the right design of the funding conditions, we can even create a stabilizing effect in housing construction. Because that's what players in the construction industry tell us: part of the construction will be financed securely through subsidized housing. However, this presupposes that there is adequate funding. The target is that subsidized housing can be calculated with a fixed yield of four to five percent. If that is achieved, then I assume that we will find enough property developers who are interested in building under these conditions.

WELT AM SONNTAG: You seem so sure. Are there already similarly high requirements elsewhere in Germany?

Alam: Yes, there are many examples. One is Munich. With the local social land regulation, there is a requirement of 60 percent subsidized apartments on private land. Housing construction hasn’t collapsed there.

WELT AM SONNTAG: When will there be enough social housing in Hamburg?

Alam: The number is determined by demand and we see that 40 percent of Hamburg's residents are entitled to subsidized housing. 30 percent in the first and ten percent in the second funding channel. We have to say that we are a long way from meeting this requirement. And there you need both the new building and the existing pillars to ensure that there are enough subsidized apartments.

WELT AM SONNTAG: In order to get social housing, you want to extend ties and buy new stock. But you also want to rededicate so-called exemption areas – despite criticism of the idea. Why?

Alam: These are areas in which subsidized housing is released for people who are not entitled to subsidized housing because the aim was to promote a social mix. It is now the case that more than 40 percent of Hamburg's residents are entitled to subsidized housing. Honestly, there is no longer any risk of social segregation. The accusation that mistakes from the 1970s are being repeated is unfounded.

WELT AM SONNTAG: Let's leave the topic of social housing. What do you want to do to make rents more affordable overall?

Alam: In addition to the construction of new housing, which housing cooperatives and Saga are supposed to do more as cheap landlords, our leverage at the state level is frankly limited. It is important that the federal level creates the conditions. For example, the cap limit has to be lowered further and the index rents have to be reformed because inflation and rising consumer prices are causing these index rents to explode and are not covered by the rental price brake. In general, the many loopholes in the rental price brake must be closed. Because otherwise we'll talk about the rental price brake and there are too many ways to circumvent it.

WELT AM SONNTAG: Do you have an example of such a loophole?

Alam: There are several, such as furnished living. To put it bluntly, this means that I put a bed and a table in an apartment and then I am no longer bound by the rental price brake, but can instead take imaginary prices. That is not what the legislature wants, but it does happen in practice. We need to set clearer guidelines. Another example is temporary leases. They are also deliberately used to circumvent the rental price brake. A third problem is that there are many rental contracts in Hamburg in which the rents have long been above the rent index. These are also not covered by the rental price brake.

WELT AM SONNTAG: Let's move from the tenants to the owners. The landlords should be able to pass fewer costs on to the tenants. But then fewer landlords are likely to renovate or modernize.

Alam: Of course there must be a regulation that ensures that the costs for landlords are not unbearable. But we experience - as with the furnished apartments - again and again that the apportionment for modernization costs is used as a gateway for rent increases. That's why we're talking about limiting the allocation for modernization costs, but not about abolishing them completely. When it comes to renovations, the aim is to distribute the costs more fairly. Tenants should also continue to bear a share of the renovation costs, but so should the landlords and of course the public sector. Tenants must no longer be overburdened.

WELT AM SONNTAG: But if I have little or no incentive as a landlord, why should I renovate or modernize an apartment? As a consequence, aren't legal obligations necessary? The EU has just set a new framework.

Alam: If we look at the fact that 40 percent of the CO2 emissions from the building sector come from heating, then we can all agree that we have to renovate a lot of existing buildings. Of course, the state is also responsible for this. That is why we have just increased funding for renovations in Hamburg. Of course, we also hear from the landlords and see that we can offer realistic subsidies. But we don't think it's realistic to get by without any additional costs for landlords.

WELT AM SONNTAG: Only a few landlords will voluntarily participate...

Alam: We have passed specific demands on this. From our point of view, it would make sense to approach the refurbishment of existing buildings according to the "worst first" principle. We would start with the buildings that have the worst energy performance because that's where there's the most to gain. We imagine that we start with subsidies, which are then followed by obligations for renovations. On the one hand, there would be a high incentive to carry out the renovations quickly while the subsidy is still available, and also for the buildings where it is needed at the moment. On the other hand, such a step-by-step model would make it very clear and transparent when it is the turn of which building category and when it needs to be renovated in terms of energy efficiency. Because there are only subsidies for the currently worst category, resources and workers would also be used correctly.

WELT AM SONNTAG: Let's stay with the environmental aspects of construction for a moment. In the new guidelines, they also call for houses to be built at least in efficiency house level 40. Do you think it's realistic that this will become the new standard? Or are you endangering the construction of new housing?

Alam: We agreed with our coalition partner on the efficiency standard 40 in new buildings back in 2020, that's in the coalition agreement and that's the line we want to take together. I was surprised that this was again a reason for criticism. Of course, a higher building standard also means slightly higher costs. But if we look at what triggered the already existing construction crisis, then the main reasons are the rising costs of interest and building materials as well as the shortage of skilled workers. We need solutions for this, no question. But I don't think it's plausible that, for example, better insulating wool is the price-driving factor. On the other hand, it is even the case that anyone who looks at the life cycle costs of buildings should have an interest in constructing a building as high quality as possible. And I didn't make that up. The Federal Building Minister, for example, says the same thing: Forgoing climate standards when building is unprofitable for a short time. Perhaps the construction industry still needs a shift in perspective.

WELT AM SONNTAG: Another demand that you decided at the party conference concerns the type of new houses: they should have apartments. Does that mean the end for single-family homes in Hamburg?

Alam: It's not about condemning single-family houses, but about making new, large housing areas viable for the future, such as in Oberbillwerder. We have limited space for housing and need to create as much living space as possible. We can do that with apartments and maybe in the form of terraced houses, but not with single-family houses. There is no question that people will buy land to renovate or build new single-family homes, and it will continue to be possible. But we will no longer create large new districts with single-family housing estates.

WELT AM SONNTAG: According to its own statements, the popular initiative “Hamburg expropriated” has just handed over 18,231 signatures and is already threatening a referendum if politicians do not respond to their demands. What is the position of the Greens on the popular initiative?

Alam: The party took a clear negative stance on the subject of expropriation at the party congress. I share the decision, because expropriations would be a huge cost factor because they only work against compensation. I think we need the money for other things. In addition, it is not foreseeable that such a process would take place without legal chaos or class action lawsuits. But the issue of affordable housing is growing and we need new answers. If an initiative has new ideas, then I can certainly imagine discussions. But both we and our coalition partner say no to expropriations.

Leon Alam has been deputy state chairman of the Greens in Hamburg since 2021. Before that, he was state spokesman for the Green Youth in the Hanseatic city for two years. The 26-year-old is studying political science for a master's degree at the University of Hamburg. Born in Hamburg, he has been with the Greens since 2017. At that time, the AfD had entered the Bundestag, which was a reason for Alam to get involved in party politics. His main focus is in the areas of anti-racism and climate policy, but recently he has also become heavily involved in questions of urban development.

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