Creating Appropriate Living Space and Affordable Rents
The situation on the German housing market did not change in 2018 and housing demand continues to significantly exceed supply – particularly in metropolitan areas. This has resulted in rising rents and housing shortages. At the same time, construction of new buildings lags behind housing demand, particularly in metropolitan regions, despite a greater amount of construction being completed. Vonovia aims to counter this trend and to offer affordable homes, first and foremost through efficient processes and economies of scale, and to alleviate the situation on the housing market through the construction of new homes. This is the only way to lessen the pressure on the housing market. Vonovia is therefore continually investing in the expansion of its portfolio through new construction and acquisition, and offers conditions that in some cases – such as in Berlin – are significantly below the standard local comparative rents for newly constructed homes.
The housing market is also still undergoing a transformation due to demographic changes. On average, the population in Germany is aging and the number of one-person households is increasing. These developments are posing considerable challenges for the housing industry, particularly when it comes to providing homes that meet the needs of tenants. Vonovia intends to tackle these challenges with new constructions and by converting existing stock, e.g., changing the size of apartments and conducting senior-friendly apartment conversions.
The fact that awareness of the housing problems has noticeably increased in recent years also plays an important part here. Surveys suggest that the prevailing opinion is that policymakers have made the wrong housing policy decisions in the past and that they are still doing too little to combat the problem. This shortage of housing and the development in property prices/rent that this entails has created a subjective sense of inequality that pervades all sections of society, with political decision-makers under increased pressure to rectify the situation. Vonovia acts between the political and social spheres in this tense environment, although the political framework is having an ever greater impact. We respond to these developments by forming individual agreements with some cities and municipalities, which enables us to continue offering affordable homes.
Establishment in the Organization 103-2
The planning of new apartment construction either takes place via the BUWOG companies’ development departments or the technical service. They are also usually in charge of expansions and conversions. In the field of portfolio and rental management, rent is calculated in coordination with the regions and hardship management processing.