Anticipated infusion of funds for reasonably priced accommodations - Increased finances earmarked for the construction of new social housing projects in prospective planning
In a bid to address the country's housing crisis, the federal government has announced plans to increase funds for social housing construction across Germany. However, the exact amount that Saxony will be required to contribute in co-financing remains unclear.
According to the latest reports, Saxony is expected to receive an additional 25 million euros in federal funds for social housing construction in the coming year. In 2025, this figure is set to increase to 149.5 million euros, with the state's share being around 50 million euros.
The federal cabinet has adopted a draft budget for 2025, with an increase in funds for social housing, totaling 3.5 billion euros for 2025, 4 billion euros for 2026, 5 billion euros for 2027, and 5.5 billion euros each for 2028 and 2029. If these plans are approved by the Bundestag, the additional amount could reach around 75 million euros in 2027, and around 99 million euros in the two following years.
Despite these promising figures, Left Party politician Juliane Nagel emphasizes the need for more attention to the area around Dresden and Leipzig in the creation of social housing. She also demands more money for social housing in Saxony, stating that the state needs many more social housing units than can be financed with the available funds.
Nagel urges the Free State to claim the federal funds by providing sufficient co-financing. According to the Infrastructure Ministry, if states continue to have to provide at least 40% of the federal funds claimed, additional state co-financing of at least 9,964,160 euros would be required for Saxony to receive the federal funds for social housing construction.
It is worth noting that housing cooperatives in Saxony face significant investment needs, estimated at about €17 billion to meet climate neutrality targets by 2045. This figure highlights the scale of funding required in the housing sector, but does not specify any new or additional state funding for social housing construction.
The economic viability of housing companies depends on rent adjustments, and current rents provide very limited surplus for investments. This highlights financial constraints but does not specify funding or co-financing criteria.
As the situation stands, the distribution of funds will continue to be based on the key of Königstein, with the Bundestag needing to approve the plans adopted by the federal cabinet for the distribution of funds.
In light of these developments, it is crucial for the state government to provide clarity on the exact amount of additional funding allocated for social housing construction in Saxony and the requirements for state co-financing related to social housing in Saxony. Consulting official Saxony state government publications or housing ministry announcements may provide the necessary details.
The state government needs to clarify the exact amount of additional funding allocated for social housing construction in Saxony, as this information is essential for housing cooperatives to meet their investment needs. Understanding the requirements for state co-financing related to social housing in Saxony is equally important, as it will determine the amount of co-financing required for Saxony to receive federal funds.
The lack of clarity on these matters could affect the economic viability of housing companies in Saxony, as they rely on a balance between rent adjustments and funding to make necessary investments in social housing construction. Consulting official Saxony state government publications or housing ministry announcements may provide the necessary details to resolve this issue.
