Housing shortage

The affordable housing gap is a socio-economic phenomenon characterized by the scarcity of affordable housing relative to the demand for it. This disparity is linked to social, racial, and economic inequality, and disproportionately affects households with lower incomes. The insufficiency of suitable affordable housing options can lead to negative outcomes for both families and communities.

In 1990, the housing shortage in western Germany was estimated at around 1 million homes. There have been unexpected shifts in the population and its social habits, including the arrival of 750,000 German speaking immigrants in 1989 alone, a divorce rate of 130,000 a year, young single people entering the market, and an unexpected demand for bigger homes from smaller households. In the current decade alone, the number of over-60's in Germany will rise by three million to 15 million. In the first half of the 1980's the official estimate was for a 500,000 growth in the number of private households by the end of the decade, whereas the actual rise was 1.7 million -- almost all single people -- bringing the total to 27.4 million. By comparison the number of housing completions had fallen to their lowest levels for years: 177,000 in 1988 compared with 714,000 in 1973. Additional reasons for the housing shortfall are land shortages, prolonged planning procedures, green issues, and putting a priority on leisure space, and high interest rates which reduce the ability of new homeowners to take on a mortgage and make short-term money deposits a more attractive investment than property.