Territorial Inequalities and Social Housing in Germany: Between Centralization and Decentralization?

Affordable housing - or the lack thereof - has become one of the major social and political issues of our time. Around the globe, the problem appears to be similar: increases in household incomes have largely lagged behind the skyrocketing prices for rent, especially in metropolitan areas and larger cities. Housing is a universal right, however. It is enshrined in the European Social Charter (revised version, Article 31) and in many national constitutions. There are various instruments governments may use to support lower-income households to meet housing costs. Social housing is the central one. The idea is to use public funds for providing reasonably priced housing. In Germany, the constituent units (Länder) play an important role in social housing policy. As a consequence, the policy area is characterized by both territorial inequalities and arrangements that aim at reducing them. Since the beginning, social housing has oscillated between centralization and decentralization. Immediately after the end of World War II, with almost half of the housing units either destroyed or severely damaged (Blumers & Werner 1979, p. 17), social housing became a national challenge. The constitution defined social housing as a concurrent power, based on which the federal government enacted the First and Second Housing Act in the 1950s. As a result, social housing became a “federally funded building programme” (Droste & Knorr-Siedow 2014, p. 183). The Länder still had a decisive say as they implemented the federal government program. In the course of the 2006 federal reform, social housing became an exclusive power of the Länder. The goal was to revitalize social housing by allowing Länder governments to tailor regulations to the specific needs of their constituency (Kiehle 2021, p. 1034). In 2019, however, the federal government gained the authority to set national standards by providing conditional grants. This paper investigates these changes in the distribution of authority over social housing from the perspective of territorial inequalities. More specifically, we examine whether a stronger or weaker role of the federal government leads to less or more differences in the provision of social housing across the federation. We thus compare different instruments used to address territorial inequalities: federal regulations, unconditional funding, and conditional grants.