Struggling with Skyrocketing Housing Costs - Social Housing Crisis in Thuringia
Escalating hidden expenses - Shortage of social housing persists - Escalating expenses due to inadequate affordable housing become more prevalent.
Live, breathe, and brace yourself - tenants across Thuringia are about to face a major financial blow as ancillary costs creep up, prompting a potential crisis in social housing. According to the Thuringian Housing Industry Association, these costs may soon match the price of cold rent, dramatically increasing rent for many Thuringians.
"If nothing is done, we're facing a significant ancillary costs crisis," Frank Emrich, the association's director, told the German Press Agency at a recent conference in Suhl. Currently, the average cold rent for the cooperative and communal housing companies represented by the association sits at 5.63 euros per square meter per month. Coveting half of tenants in Thuringia, these housing companies play a significant role in the region.
Ancillary costs, however, prove to be another story. While averaging 3.16 euros per square meter, these costs show significant regional disparities, largely influenced by energy price differences between providers. In Gera, for instance, warm ancillary costs run an average of 1.36 euros per square meter, while Sonneberg experiences 2.33 euros. Overall, the warm ancillary costs for the apartments represented by the association come out to an average of 1.68 euros per square meter.
This escalating problem has the housing companies scrambling to explain the inevitable increase in ancillary cost prepayments to renting tenants. They've been aiming to reap the best energy prices possible through high consumption and focusing on building insulation and heating control, but they admit that it's an uphill battle.
Around 90% of rented apartments, as claimed by the association, are already energy-renovated. Despite burdened ancillary costs, there seems to be no notable increase in the number of tenants falling into arrears, a silver lining that should not be overlooked. This positive trend might be partially due to state support for a portion of the tenants.
Reliable estimates by the association director foresee a need for about 150 million euros in annual state funding to build or renovate the minimum required 1,000 social housing units to combat the declining number of such units in Thuringia. The disbursement of funds appears to be slow and bureaucratic, limiting the current state funding to 70 million euros.
Construction costs and rents in Thuringia's major cities have surged to around 4,500 euros per square meter, making affordable rents unattainable at these prices. While initiatives for middle-income housing are gaining support from the housing companies, more action is necessary to address the growing problem of social housing affordability.
The Thuringian Housing Industry Association represents a total of 234 companies, including 185 housing associations responsible for approximately 265,000 apartments in Thuringia.
"The escalating ancillary costs in Thuringia's social housing could potentially be mitigated through community policy, focusing on vocational training in energy-efficient technologies to optimize building insulation and heating control. Such initiatives could help housing companies to secure better energy prices, thereby reducing ancillary costs."
"Given the predicted annual need for 150 million euros in state funding to build or renovate 1,000 social housing units, exploring alternative financing options, like partnerships with industry and business, could accelerate the process and provide sustainable solutions for affordable housing."
