The social development bank for Europe

Germany: investing in affordable housing

The CEB is working with the Federal State of Hesse to increase the social housing stock for the benefit of vulnerable groups, including migrants.

Germany social housingDespite a robust economy, a number of financially weak municipalities in Germany have accumulated massive backlogs of capital investment in local public infrastructure in recent years. In addition, Germany accepted nearly 1 million refugees and migrants in 2015, more than any other European Union country, bringing additional challenges for local communities.

Against this backdrop and to address the challenges related to the large influx of refugees, Germany launched an investment programme to support financially weak municipalities, while those operating reception centres for refugees are eligible for increased support.

To reinvigorate public investment at municipal level and to reinforce the impact of the federal investment programme, in September 2015 Hesse launched a complementary state level investment programme, the Kommunalinvestitionsprogramm des Landes Hessen (KIP). KIP is structured around three main components: (1) municipal infrastructure in particular educational facilities, transportation and communication technology (2) social housing and (3) hospitals.

The CEB invests in affordable housing

The CEB’s € 230 million loan to support KIP will promote rented social housing investments in Hesse aimed at providing appropriate dwellings for low-income persons. It will fund the construction, renovation, refurbishing and conversion of buildings and related infrastructure for rented social housing.

In the case of renovation, KIP will ensure that the accommodation comes up to “appropriate living standards” and brings additional benefits through the upgrading of heating systems and thermal insulation to improve energy efficiency and sustainability.

The promotion of affordable housing remains a key priority and social responsibility for the government of Hesse, which is experiencing a declining trend in the social rented housing stock. This trend is due to the large number of units reaching the end of their legally capped rent period, while some older dwellings no longer meet living standard requirements.  

The final beneficiaries are households that have problems accessing the free market. This often concerns families with migrant or refugee backgrounds, persons with disabilities, the elderly, the unemployed, and people on welfare. In 2015, 80 000 refugees arrived in the Federal State of Hesse, compared to 17 000 in 2014.  

Projects in Germany  

In recent years the CEB has financed two programmes in the sector of Housing for low-income persons with NRW.BANK, the public bank of the Federal State of North-Rhine Westphalia both project involve the conversion of buildings into social housing.  

WIBank, the development bank of the State of Hesse, and the CEB successfully cooperated on a € 250 million loan for the construction, renovation and modernisation of school buildings in the State of Hesse.

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