Struggles faced by housing companies in Saxony regarding climate goals and rental costs

In a recent statement, Saxon Minister of Infrastructure, Regina Kraushaar, has brought up several arguments for moderate rent increases in the housing sector. The aim is to generate funds for necessary climate neutrality investments in the Saxon housing industry, which requires an additional 17 billion euros by 2045.

Kraushaar pointed out that the costs mentioned primarily concern operating costs that still need to be covered despite vacancies. After subtracting expenses such as vacancy, amortization, return on equity, and others, only two cents remain for investments in housing cooperatives.

Alexander Müller, director of the Association of Housing and Real Estate (vdw), also supports the idea of a rent increase, considering it necessary. The vdw manages around 310,000 apartments in the Free State, with an average net cold rent of 5.50 euros per month. In comparison, the average net cold rent in a cooperative apartment in Saxony is 5.62 euros.

However, both Kraushaar and Mirjam Philipp, head of the Saxon Association of Housing Cooperatives, emphasized the importance of managing finances carefully to avoid financial difficulties due to the responsibility towards tenants and members.

Philipp stated that housing cooperatives have invested the same amount since 1990, despite the increasing need for modernization and maintenance. In the past ten years, the housing companies have increased rents by an average of 1.9 percent, which is below the inflation rate.

The high vacancy rate is a significant issue for housing cooperatives, costing them around 100 million euros per year. In some places, the vacancy rate is even 20 percent. Around 10 percent of the approximately 300,000 apartments in the portfolio of housing cooperatives are empty.

Despite the higher rents, Dresden and Leipzig still offer cheaper rents compared to other major cities in Germany. Rent increases, if implemented, could potentially increase rents for tenants by two to three euros per square meter, depending on the required investment.

Kraushaar also acknowledged the psychological aspect of rent increases, emphasizing that the goal is to find a balance between the need for investments and the ability of tenants to afford the rent. She has informed herself about problems in the housing industry in rural areas and will continue to work on finding solutions to address these challenges.

Unfortunately, no specific search results were found providing detailed information on which organizations in Saxony collectively own over 300,000 residential units or the average monthly net cold rent per unit. This information remains to be gathered and will be crucial in understanding the current state and future direction of the Saxon housing industry.

Struggles faced by housing companies in Saxony regarding climate goals and rental costs