Ineffective Action Taken by the Land Government Regarding Housing Supply Crisis
In North Rhine-Westphalia, four major cities - Bonn, Neuss, Cologne, and Düsseldorf - are home to approximately two million inhabitants. However, a recent report by NRW.BANK reveals concerning trends in the housing market.
The report shows that the real wage development was eleven percent in the same period, yet citizens are facing increased costs. Surprisingly, the state government is reducing funding for the construction of rent-controlled apartments. This decision, coupled with the 23 percent increase in re-rented existing apartments, has raised concerns among residents.
Sonja Bongers, Chairwoman of the SPD city council fraction and a member of the North Rhine-Westphalia state parliament, has been vocal about these issues. She argues that the focus on 'problem groups' on the housing market is not reflective of reality. Instead, she highlights the issue of high rents that are taking money away from people for further living expenses and participation opportunities, ultimately affecting the quality of life.
Bongers proposes two potential solutions to combat these issues. First, she suggests unlimited rent control on public land or the establishment of a land fund to combat land price increases. Second, she proposes the establishment of a state housing construction company to promote housing construction and combat the housing shortage in cities.
According to studies by the universities of Frankfurt a.M. and Berlin (FU), these four cities have a housing quota of around 30 percent of net income. In large cities like Cologne and Düsseldorf, approximately 50 percent of the population theoretically has a right to a rent-controlled apartment.
However, it's important to note that no new information has been provided about the state housing construction company, rent control, housing eligibility certificate, housing promotion program, or housing construction. The current status of the state housing company demanded by SPD representative Sonja Bongers is that it is still in the planning or proposal phase and has not yet been fully established or operational.
Bongers also emphasises that the problem of housing shortage and affordable housing affects large parts of the population in urbanized metropolitan areas and further cities of the country. The state government's housing promotion program 2017-2022 plans to reduce the funding rate for rent-controlled apartment construction from 730 million euros annually (2019) to 700 million euros annually (2020).
New rents have increased by 29 percent since 2010, according to the NRW.BANK housing market report 2018. This significant increase in rents is a concern for many residents, and Bongers' proposals aim to address these concerns and provide solutions for the housing crisis in North Rhine-Westphalia.
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