Creating Appropriate Living Space and Affordable Rents
Management Approach
The problem surrounding the availability of affordable housing attracted considerable media attention in Germany in 2019. The question of publicly subsidized housing arises, in particular, in tense housing markets in metropolitan areas. The shortage of housing and, as a result, the development of property prices and rents are creating a subjective feeling of injustice across all sections of society. As a result, policymakers are coming under increasing pressure. Vonovia finds itself caught between the poles of society and politics, as social discussions on affordable housing are shaping the political agenda.
Vonovia sees itself as part of the solution by offering affordable housing for broad sections of our society. Within this context, we are committed to using densification measures in existing settlements, vertical expansion and the development of newly designated building land. In doing so, we use a modular approach to new construction work over and above conventional construction methods. This allows Vonovia to create new living space more quickly. The development business of the BUWOG companies and the expansion of the new construction and conversion projects realized by our technical service are allowing us to forge ahead with our new construction measures on a large scale. Vonovia will offer affordable homes first and foremost through efficient processes and economies of scale, and alleviate the situation on the housing market by building new homes. This is the only way to ease the pressure on the housing markets – especially in metropolitan areas and in central and urban locations.
One aspect that is of decisive importance to us is being able to offer existing and new tenants alike the prospect of being able to stay in their homes in the long term. Nobody should have to move out of a Vonovia apartment due to their financial resources, especially not because of modernization work. This is why we are going beyond our statutory requirements and taking numerous measures to protect the people living in our properties. We are limiting the costs of modernization measures that can be passed on to tenants to a maximum of €2/m2. An active hardship management system supports tenants who are experiencing financial difficulties and finds individual solutions. We offer tenants over the age of 70 a guarantee that their apartments will continue to remain affordable even if the standard local comparative rents change. We have laid all of these aspects out in our voluntary commitments. In collaboration with city and municipal authorities, we offer subsidized and independently financed housing for people on low incomes. In many cities, social charters provide additional protection in this regard. Our rental prices are based on the usual local rents and – if available – on the qualified rent indices.
Establishment in the Organization 103-2
Vonovia’s new construction business, which operates under the BUWOG name, and the technical service plan the construction of new apartments. The technical service is generally also responsible for expansions and conversions. In the field of portfolio and rental management, rent is calculated in coordination with the regions and hardship management processing.