Thomas Aigner on the new “Gewerbe zu Wohnen” funding programme
The federal government is taking up a well-known idea: converting vacant commercial buildings into housing. With a total volume of 300 million euros and a maximum subsidy of 30,000 euros per residential unit – capped at 300,000 euros per investor – this step is now to be promoted. In view of the ongoing housing crisis, any impulse that reactivates unused office space is a step in the right direction. Owners also benefit, as many commercial spaces can hardly be rented out anyway. However, the program is not a game changer for the new construction crisis.
Conversion projects are technically complex and extremely cost-intensive. The funding volume provided is mathematically sufficient for just 10,000 apartments – hardly more than a drop in the ocean nationwide. The budget will be exhausted quickly, which is likely to lead to planning uncertainty among investors. Nevertheless, one should not underestimate the enormous symbolic effect of this program!
A real plus for investors is the option for later reconversion. This is the right signal to the market: If owners know that they can react flexibly to future market trends, the risk of such large-scale projects is significantly reduced.
Yield dilemma in Munich
The topic is also already being taken up in Munich. The city wants to use federal legislation directly and, for example, relax requirements for parking spaces. Under certain conditions, the state capital also pays subsidies – but links them to rent control. This is likely to plunge owners of commercial properties into a yield dilemma: Since average office rents in Munich are very high, many landlords are hoping for a renaissance of the office segment rather than investing millions in an expensive renovation – especially if low social rents are demanded in return.
Conclusion: The direction is right, but the volume is far too low in view of the glaring shortage of housing. The important thing now is to take action. Construction must be worthwhile again for the private sector! This will only succeed if we radically streamline building regulations, speed up approval processes, create more building rights and defuse tenancy law.
