Society and Contribution to Urban Development

Community Development and Contribution to Infrastructure

Disclosure

In recent years, neighborhoods have increasingly become the focus of the real estate industry and urban planning. Quality of living is increasingly being linked to the neighborhood level. People want to feel good about their surroundings and identify with where they live. A balanced mix of rented apartments and condominiums, the integration of small businesses, attractive open and communal spaces, the availability of local suppliers, modern transport connections, good educational facilities, and social and cultural facilities – the interplay of all these factors promotes diversified and vibrant neighborhoods. This is an aspect that is also becoming increasingly important to tenants. In this way, the real estate industry is also partaking in urban development and is able to contribute its own expertise to the design processes through direct contact with tenants.

Neighborhoods bring together stakeholders with different interests, including through varied ownership and tenant structures. In order to feel at home, many people want to be involved in decisions that will have an impact on the environment around their homes. Participation measures are therefore becoming increasingly important to strengthen acceptance for community development and the associated, often long-term, measures. Our experience shows that participation processes can achieve even better results by incorporating new and varying points of view and by integrating them into decision-making processes. The complexity and probability of not being able to fulfill all stakeholder wishes equally also increases.

Focusing on the neighborhood level makes it possible to align urban development specifically with social and ecological needs and to exploit synergies. Innovative solutions that enable buildings to be networked together are especially important if climate protection targets are to be achieved. Social cohesion can only be achieved by looking outside of one’s own front door and towards the neighborhood.

Our Approach

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. We are convinced that a livable neighborhood strengthens tenant loyalty and increases the value of residential properties. In 2020, we analyzed our portfolio structure with this in mind and placed even more focus on the neighborhood concept with the innovative strategic approach B2Q (Business to Quartier [the German word for neighborhood]), with the aim of ensuring the most efficient management possible and being able to continuously improve the quality of our portfolio in the interests of our customers and our company. The analysis showed us that over 70% of the portfolio of Vonovia in Germany is located in neighborhoods. This amounts to around 600 neighborhoods, each with an average of around 430 apartments. In our view, the development of these interconnected portfolios offers a great deal of potential for shaping construction and society and contributing to sustainable community development. Vonovia neighborhoods are always aligned with clear climate protection requirements (see section Energy-efficient Modernization and Carbon Reduction in the Portfolio) and social compatibility (see section Living at Fair Prices).

Community development projects require an intensive examination of local conditions, i.e., the character and tenants of the neighborhood. But each neighborhood is different and has different requirements and faces different challenges – e.g., access to education may be lacking, or the neighborhoods lack cultural institutions, or there is no interaction between the different age groups. For this reason, we identify the individual needs of tenants, cities and our partners for each neighborhood and determine which goals we want to achieve and how we can implement them economically.

Derived from this, we develop a coordinated neighborhood-specific infrastructure that combines structural design, climate protection and social offerings. Our climate protection goals will only be within reach when we take a systematic neighborhood approach. Here in particular, a holistic approach is needed to develop neighborhoods in line with our climate plan (see section Carbon Reduction in the Property Portfolio/Energy-efficient Modernization). This type of neighborhood approach opens up entirely new scope for us, for example, for expanding our range of services or testing new technologies such as sector coupling (see section Renewable Energies and Energy Mix). We are creating new living space in conurbations through densification and adding extra stories (see section Sustainable Construction and Refurbishment).

We also take responsibility for designing our neighborhoods. We are expanding the infrastructure to meet local needs. To achieve this, we are creating space for local suppliers, medical services or educational institutions, social facilities and services, and creative artists (see section Inclusion, Diversity and Social Cohesion). Modern mobility options such as the creation of a charging infrastructure for e-mobility (see section Renewable Energies and Energy Mix), car sharing options, or the expansion of parking spaces for bicycles are also important parts of community development that must be considered from the outset. Vonovia also designs residential environments, playgrounds and green spaces in such a way that they strengthen participation and urban coexistence, enhance the quality of living and are also sustainable from an ecological perspective (see section Biodiversity).

As a matter of principle, we want to implement community development projects in such a way that the acceptance of construction measures and other projects increases. We therefore actively involve our tenants in the associated intensive coordination processes (see section Involvement and Participation). We also cooperate with authorities and other municipal and social institutions and exchange ideas with political representatives. Through discussions with the stakeholders involved, we gather experience and incorporate it into our concepts. Only if our ideas and concepts are supported by everyone can we implement them successfully and promote value creation.

Organizational Focus

Community development projects are planned and managed on a decentralized basis via the regions. The regional managers for the West, North, East and South regions are responsible for the respective projects and implement them along with their regional managers.

The Chief Rental Officer (CRO) is the Management Board member responsible for operational 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 regions are also responsible for managing the investment and participation formats, as well as corporate citizenship and philanthropy. This approach is supplemented by centrally managed supporting measures via corporate communications, including from a quality assurance perspective.

Objectives and Measures

Our goal is to create housing that meets people’s needs and is worth living in. To this end, we carry out neighborhood development projects in cooperation with cities and municipalities and initiate further projects every year with the aim of improving the infrastructure, realizing integrated energy concepts and dealing with urban development issues.

In concrete terms, this means, depending on demand:

• Creating affordable housing through vertical expansion, densification and new constructions
• Implementing modernization in a socially responsible manner
• Optimizing the energy requirements of our portfolio
• Thinking about and designing the residential environment in an integrated way, including recreational areas, playgrounds, and holistic mobility concepts
• Integrating local suppliers (in Berlin even setting up a weekly market), daycare centers, doctors and social and cultural offers
• Promoting dialogue with tenants and stakeholders in order to encourage acceptance and influence

Community Academy as an Important Building Block
for Implementing the Neighborhood Strategy

These complex tasks require teamwork and extensive innovative knowledge. This is why Vonovia has designed a community academy in cooperation with the European Training Center for the Housing and Real Estate Industry (EBZ) in Bochum. Our employees will be responsible for community development projects in the regions. The aim is to use modules, practical case studies and training content to provide them with specific skills and innovative expertise for successful and future-oriented community development. The training content includes:

• Knowledge about the structure of neighborhoods
• Stakeholders and their role in the neighborhood
• Technical approaches to solutions and future developments
• Communication and participation

In the future, the community academy will be a central building block for implementing the neighborhood strategy. At the same time, it serves to carry ideas that arise from the community academy into the company and thus contribute to further development.

The scientific foundation for the topic of community development is being expanded by a professorship endowed by Vonovia at the EBZ Business School – University of Applied Sciences in Bochum. Professor Jan Üblacker, a renowned urban sociologist and social scientist, has taken on the professorship endowed by Vonovia, thereby firmly establishing the neighborhood perspective in the curriculum for the EBZ students.

In Austria, we set up community development schemes where necessary, which will support every new neighborhood until its structures have been fully established. We also support social and technical infrastructure through financial contributions.

In 2020, there were 14 community development projects in the operational implementation stage across Germany, comprising approximately 8,000 residential units, as part of the community development investment program. These include various key components such as energy-efficiency refurbishments, constructing new homes, and measures to design an appealing residential environment. These are supported by additional social services, aspects pertaining to urban development and necessary infrastructure measures. These projects generally run for a period spanning several years. In 2020 Vonovia invested € 42.3 million into 14 community development projects.

Another aspect of community development projects is the promotion of modern mobility concepts such as e-mobility. For example, e-charging stations give our customers the opportunity to switch to an electric car, and car sharing options allow them to do without their own car altogether. This not only has a positive impact on the climate, but also reduces costs for our customers and strengthens their relationship with Vonovia. In 2020, our measures in this regard included:

• Reducing car parking spaces and installing bicycle parking spaces and bicycle garages for e-bikes
• Expanding car and bike sharing services (including for e-vehicles)
• Providing connections to public transportation
• Promoting electromobility, e.g., by installing charging stations for cars and e-bikes

According to our internal specifications, charging stations must always be pre-installed when modernizing existing buildings or constructing new buildings. Around one third of our new construction projects completed in 2020 already feature charging stations. On average, each newly built apartment currently has 1.7 parking spaces for bicycles, and the closest public transport connection can be reached on foot in 3.4 minutes.

The residential environment plays a particularly key role in the community development measures implemented by Vonovia. New green spaces and playgrounds as well as socially designed community centers outside the buildings can create real added value for tenants. Particularly in urban environments, the issue of spaces for relaxation is becoming an increasingly important factor in terms of how people assess quality of life. We make a positive contribution to social development through projects such as establishing community gardens. In 2020, we were able to establish wildflower meadows and insect habitats in numerous locations.

Community Development (in Germany)

Planned for 2021

• Continuing the segmentation of our portfolio into neighborhoods and developing additional corresponding neighborhood strategies
• Continuing (or completing) community development projects according to plan, with further community development projects already planned, e.g., in Bielefeld and Hanover
• Investment volume of around € 85 million (projection) for community development in Germany
• Inclusion of further projects into planning according to our systematic approach, i.e., taking into account our climate plan, societal goals and opportunities for infrastructure, mobility and residential environment design
• Commissioning a concierge system in Dortmund-Westerfilde
• Continuing to establish the Vonovia community academy and the endowed professorship
• Commissioning of 30 publicly accessible charging stations for e-mobility as well as a further three car sharing locations
• Implementing tenant requests for privately rentable wallboxes at rented parking spaces