| Abstract: | In Germany, in times of extreme low interest rates there is a boom in housing construction, housing demand and housing prices. In order to relieve the housing market, the Federal Government is planning to expand the funding for social housing considerably. Affordable housing has been decreasing in German metropolitan areas in recent years, the same applies to social housing. Meanwhile, the demand for dwellings in the lower and middle price segment is rising, partly due to an increased migration rate. This is why a strong social housing promotion needs to be combined with an effective direct subsidy, such as a dynamic housing allowance. However, the targeting of social housing is highly inaccurate. Thus, it would be better to strengthen housing allowances and to help lowincome households to purchase homes in order to reduce living costs. Nowadays, property credits stabilize the banking sector. However, just a small increase in interest rates could result in a new financial crash. Ever since their foundation, housing cooperatives have created affordable private dwellings and a safe living place for their members. They are able to produce not only tenants but owners of the dwellings. Thus public assistance schemes and subsidies should not exclude housing cooperatives. |
