We need more and affordable housing in the urban centres. How can we accomplish this?
Firstly, through the incentive of private housing construction.
Every landlord has to generate a gross yield of around four to five percent to ensure that building is worthwhile with all the opportunities and risks involved. Because the owner also bears the risk of vacancies and damage. Otherwise, nobody will build anymore and logically there will be fewer flats. Rent caps must not be allowed to strangle new construction. Its costs need to be lower. Buyers in the Netherlands pay much less than in Germany because all the expenses for estate agents, notaries and the land transfer tax are much lower. This is exemplary.
In Berlin alone, 180,000 new flats could be built on the roofs of car parks, supermarkets or administrative buildings without new building land. But all this is bound to fail because of age-old building regulations. The law set maximum building heights and the distance to the neighbour too low, as was common practice 30 years ago. Regulations have not been adapted to citizens’ needs for affordable housing.
We also need more social housing. Not simple mass quarters, but convenient and amenable homes for hundreds of thousands of people in big cities.
“Pools on the roofs, social housing as beautiful as palaces, yet very reasonable rents: Living in Vienna is something special,” wrote the “Tagesspiegel” in Berlin on March 11, 2019. 220,000 flats are owned by “Wiener Wohnen”, the largest property manager in Europe. No other city in the world has so many public flats. 62 percent of the inhabitants live there. The city concludes unlimited contracts. Tenants pay only between five and nine euros per square meter. Those who want to move into a flat may not earn more than € 46,450 net per year. But those who earn more money later can continue to live there. Vienna is diligently building more flats and developing a new quarter, the Urban Lakeside Aspern. It is directly connected to the centre by underground. The new buildings there have saunas in the basement and a pool on the roof as well as terraces and gardens.
We talked to the Prime Minister’s Head of Forward Planning. He explained the megacity’s public housing: 78 percent of Singapore’s citizens live in well-equipped state flats with a 99-year lease. The Housing and Development Board helps them with the financing.
This is how social housing should work.
Proposals:
- Singapore and Vienna are role models in social housing construction for all cities worldwide.
- Every city should plan new districts with their own high-rises and rent them out cheaply.