Government housing benefit reform: Necessary but not sustainable

The housing benefit reform provides much-needed relief for many people. The problem behind it, speculation on the housing market, does not tackle them.

Tenants already spend an average of 40 percent of their net income on housing Photo: Matthias Rietschel/ap

Let’s start with the status quo: rolled up blankets under bridges, tents behind train stations. Only those whose fences are high enough to hide the misery in the cities believe that everyone in Germany can live appropriately. They’ve been exploding for years Rent in Germany. In 2021, 12 percent of renter households spent more than 40 percent of their disposable net income on housing. In other words, the situation was miserable even before the Russian war of aggression and the exploding energy prices.

The federal government is now boasting about the largest housing benefit reform in 57 years. And indeed: It is an urgently needed reform that promises more relief for many people in the acute situation. New is a permanent one heating surcharge and a climate component is introduced for the first time Rent increases after energy renovations to consider. The German Tenants’ Association has been demanding the latter for years.

On average, the reform should lead to a doubling of the housing benefit – that’s not nothing. Two million households should be able to receive housing benefit in the future, so far there have been around 600,000 households. Whether all those entitled to housing benefit also take advantage of this is another matter: So far, housing benefit has been known as a bureaucracy monster.

Despite all the improvements brought about by the reform, it does not reach all of the people who are currently overburdened with housing costs; the starting point is far too precarious for that.

In addition, this reform has another shortcoming: the housing benefit is a government aid measure that helps in an emergency, but does not get to the root of the problem. If you want to permanently relieve tenants, you have to ensure affordable housing and limit the insane rent increases. If the federal government doesn’t do this, they end up subsidizing for-profit property owners.