Social Issues

Within the context of the statutory requirements in the Non-financial Declaration, social issues include the following material topics: “Neighborhood development and contribution to infrastructure,” “Fairly priced housing,” “Homes that meet tenant needs and action in response to demographic change” and “Customer satisfaction and service quality” – see materiality matrix.

Neighborhood Development and Contribution to Infrastructure

Vonovia offers people a home in its neighborhoods. The company’s aim is for them to be able to find a good neighborhood in which they feel comfortable and which brings different generations together. With this aim in mind, Vonovia develops infrastructure that is tailored to suit the individual challenges of each neighborhood, is geared toward the needs of the tenants and combines structural design, climate protection and services to meet social needs. Vonovia’s neighborhoods are designed to comply with clear climate protection requirements. They use innovative concepts to offer a good platform to counter the challenges associated with megatrends and reduce CO₂ emissions. Vonovia designs its residential environments and green spaces to strengthen participation and urban community life and to be sustainable from an ecological perspective.

Vonovia attaches a great deal of importance to the development of contiguous groups of buildings, as they offer considerable potential for the company to make its mark in terms of both structural and social measures and for making a contribution to sustainable urban development. More than 70% of Vonovia’s portfolio is located in areas that make up neighborhoods. It is precisely in areas like these that Vonovia can shape our tenants’ living environments and adapt to the individual challenges associated with a particular neighborhood. Vonovia is equally committed to ecological and social aspects and to promoting social interaction in the local community. It uses various instruments and cooperation initiatives to achieve this, e.g., by making premises available, establishing services, neighborhood meet-ups and day care centers hand-in-hand with cooperation partners that focus on the greater good. With regard to its neighborhood approach, Vonovia has developed the innovative B2Q (Business to Quartier [the German word for neighborhood]) perspective and introduced a toolbox that is being developed further in the Vonovia Academy.

The long-term viability of neighborhood development starts with responsibility for the people in the neighborhoods and is put into practice in Vonovia’s innovative strength – cost-effective, technologically focused, sustainable, climate-friendly and social. Neighborhood development calls for complex teamwork and extensive innovative knowledge of all employees to ensure successful implementation on location. This is why Vonovia has come up with plans for the establishment of a Neighborhood Academy, which aims to transfer specific skill sets and innovative knowledge for successful and forward-looking neighborhood development. The Academy’s program in cooperation with the real estate business school Europäisches Bildungszentrum der Wohnungs-und Immobilienwirtschaft (EBZ), includes modules featuring practical case studies and training content.

Vonovia has also endowed a professorship at the EBZ Business School – University of Applied Sciences in Bochum focusing on the topic of “Neighborhood Development and Living.” Professor Jan Üblacker, a renowned urban sociologist and social scientist, has assumed the professorship endowed by Vonovia, firmly establishing the neighborhood perspective in the curriculum for the EBZ students.

In 2020, there were 14 neighborhood development projects in the operational implementation stage across Germany comprising approx. 8,000 residential units as part of the neighborhood development investment program. These include various key components, such as energy-efficiency refurbishments, the construction of new homes and measures to design an appealing residential environment – supported by additional social services, urban development aspects and necessary infrastructure measures. These projects generally run for a period spanning several years. The investment volume reported refers to the expenses associated with these measures in the fiscal year under review.

Vonovia takes both financial and social criteria into account when assessing neighborhoods. This is a process involving city and municipal authorities as well as our tenants in order to jointly develop solutions for the neighborhood.

Neighborhood development is planned and managed on a decentralized basis via the regions. The CRO is the Management Board member responsible for the operating business. We are increasingly using our own neighborhood developers for on-site implementation. This allows us to address any specific issues as and when they arise.

The investment and participation formats are also the responsibility of, and are managed by, the regions, just like Vonovia’s social commitment. This approach is supplemented, also from a quality assurance perspective, by centrally managed supporting measures via corporate communications.

Fairly Priced Housing

Vonovia meets the basic human need for housing with an offering that is geared toward the individual. As a result, our tenants are at the center of our corporate activities. Vonovia adapts its offering to reflect changing and varying housing requirements to ensure that it responds to different needs and living circumstances.

The fundamental challenge involves safeguarding our supply of housing at fair and transparent prices while at the same time achieving a climate-neutral housing stock. Climate protection is a cost-intensive business, particularly in the building sector. A sensitive approach is required in order to strike a balance between moderate rent increases and climate protection measures, innovations to reduce costs and a suitable funding environment. This is why, particularly with modernization projects, it is key to bear in mind what individual tenants can actually afford in order not to end up losing customers. After all, one aspect that is of fundamental importance to us is being able to offer our tenants the prospect of being able to stay in their homes in the long term.

In light of the above, a moderate and transparent rent policy is a fundamental prerequisite for Vonovia. We work in collaboration with city and municipal authorities to offer subsidized and independently financed homes for people on low incomes. Our rental prices are based on the usual local rents and – if available – on the qualified rent indices. Regarding modernization measures, the company has entered into a voluntary commitment that caps the modernization costs that can be passed on to tenants at € 2/m².

In addition, every tenant has the option of raising hardship case objections. Our hardship management team – which comprises employees working at the headquarters and neighborhood managers working on site – looks at each individual case and works with the tenant to find an individual solution. In addition, Vonovia gives people in Germany aged over 70 special vested rights. The hardship management team is also on hand to support our customers here – the aim always being to ensure that people can stay in their homes and that housing remains affordable.

In the context of the coronavirus pandemic, people who are particularly reliant on the security of their own four walls in uncertain times require special protection. This is another area in which Vonovia has guaranteed that nobody will have to lose their apartment if they encounter difficulties paying their rent due to the coronavirus crisis. In 2020, Vonovia helped customers living in around 1,600 apartments facing these very challenges by providing them with individual solutions.

Rent policy is managed on a decentralized basis via the regions. The CRO is the Management Board member responsible for the operating business. The individual measures are planned and coordinated in the Portfolio Management department.

New construction is playing an increasingly important role when it comes to making affordable housing available. This is the only way to respond to the growing demand – particularly in metropolitan areas and in central and urban locations – and take pressure off the housing markets. This is an area in which Vonovia is making a contribution with densification measures and projects to add extra stories to existing buildings.

Homes that Meet Tenant Needs and Action in Response to Demographic Change

Our society is changing – and so are our customers. We adapt our offering in response to changing and varying housing needs. This applies in particular with regard to demographic change. Our aim is to ensure that our tenants are safe and healthy in their homes and can plan their long-term future there. This customized offering allows Vonovia to access as broad a customer group as possible.

In Germany, the demand for senior-friendly housing will outstrip the supply by around two million by 2035. In an aging society, it is crucial to enable a large number of people to live independently in their own homes for as long as possible. Vonovia is also responding to this shortfall by equipping and refurbishing apartments for people with impaired mobility.

Homes that are completely barrier-free, according to German industry standard DIN 18040-2, are only necessary in very rare cases. Rather, a small number of measures, such as the fitting of non-slip flooring or flush-to-floor showers, are often sufficient to significantly increase the level of living comfort in old age. Vonovia has therefore set itself the target of modernizing 30% of its newly rented apartments every year to meet the demands of an aging society. Existing buildings are reviewed for their potential to be converted to make them more accessible on a regular basis. In 2020, 10,300 apartments were (partially) modernized to make them fully accessible.

This systematic focus on senior-friendly extension and refurbishment is Vonovia’s way of responding to the process of demographic change within our society.

In addition to structural measures, the social infrastructure also plays a key role. In addition to special forms of housing, such as senior-friendly apartments, Vonovia also works with cooperation partners that focus on the greater good to offer services and neighborhood meet-ups, for example.

Responsibility for the senior-friendly housing programs lies with the Management Board (CRO). The structure of the refurbishment program is managed centrally and is implemented via the regions.

Customer Satisfaction and Service Quality

We aim to support our customers as partners on an equal footing. As a result, their needs are at the center of our actions. Our customers’ satisfaction with, and appreciation of, our products and services are directly linked to the company’s success in the long term. They expect to have an affordable home offering contemporary living standards, which is why proximity to our customers and making it convenient for them to contact us are key elements of our customer service philosophy.

On site, caretakers and our own craftsmen take care of our tenants’ concerns. This allows us to ensure fast and reliable service. Our multilingual central customer service center, which tenants can contact through a number of different channels, is responsible for all queries relating to lease agreements and consumption and ancillary expense bills, for example.

At the same time, we are working to further develop and improve our customer app, implementing a number of additional self-service functions. We are also launching customer satisfaction surveys and individual surveys that are placed through the app in a targeted manner. In 2021, the app will also be expanded to include a new customer group: prospective tenants. They will then be able to search for an apartment, book a viewing appointment and arrange for the conclusion, and also conclude their lease agreement digitally.

In addition to the customer app, the digital customer portal also offers extended availability and a full range of self-service functions that can be accessed around the clock.

This is reflected in the CSI, the Customer Satisfaction Index, and is an element used in determining Management Board remuneration as a direct, non-financial control parameter. The CSI is determined by means of regular customer surveys. In 2020, the CSI for Germany was significantly higher in a year-on-year comparison. BUWOG Group GmbH in Austria also uses an annual customer satisfaction survey as a tool, although it is not consistent with the CSI. Customer satisfaction is a fundamental benchmark for all business processes at Victoria Park AB as well. The aim is to achieve ongoing positive development in the CSI.

Responsibility for the central customer service center lies with the CRO. While customer satisfaction is assigned to the central customer service center in strategic terms, it affects all customer-facing operating departments and is ensured by each and every Vonovia employee. The design and management of the tenant app and the customer portal are also the responsibility of the central customer service center.