The nurse in the hospital, the garbage loader from the municipal utility, the police officer – special living space with capped rents is to be created in Munich in the future for these and other workers from the so-called public welfare sector. With a large majority, only against the vote of the FDP, the city council’s planning committee approved a new funding program for the construction of company housing in Munich on Tuesday.
This new building land model is intended to enable public and private developers to develop rental apartments on their land that are tied to a job in areas such as health, supply and disposal, transport and public administration.
In addition to Stadtwerke München (SWM), Stadibau, a Free State housing company for its employees, and Bima, the federal real estate agency, will also take part in the program. All of these – at least indirectly – publicly supported investors already have housing construction projects running in Munich, which can now be developed in the direction of the new concept for factory housing. However, the concept is also explicitly open to private investors.
It is presented as a new variant of socially just land use (Sobon), with which the city gives investors social requirements in return for new building rights. In the so-called “Sobon model for factory housing construction and public welfare,” an upper limit of 15 euros in rent per square meter applies to 70 percent of the apartments, although rents can also be lower if subsidized housing is offered. For the remaining 30 percent, there is an upper limit based on the rent index, which is currently an average of 14.58 euros per square meter citywide, higher in good locations – and which is likely to rise further in the next survey.
With the cap on the rent index, the Sobon specifications for company housing construction exceed, on the one hand, the specifications from the regular Sobon, which, after the last reform in 2021 – to put it simply – prescribes a share of 60 percent subsidized housing and leaves the rest for freely financed marketing. These requirements are not a problem for the public authorities who are already involved in the company housing model, as they are committed to building affordable housing anyway. It remains to be seen whether private individuals will be able to warm up to the model.
On the other hand, compared to the regular Sobon, the factory housing Sobon allows a significantly higher proportion of apartments that are price-reduced but do not have to meet the strict regulations for subsidized housing. This is because many employees in public services – also due to recent good collective bargaining agreements – are above the income limits for subsidized housing. Nevertheless, they cannot afford the rents, which are often significantly more than 20 euros per square meter, which are quoted on the free market in Munich. The city’s new model is intended to close this gap.
Additional funds from the budget are not necessary for the program; funds are being reallocated from the two billion euro “Living in Munich VII” funding program. It is still unclear how many company apartments will be built based on the model.
In its draft resolution, the planning department makes the “assumption” that around 1,000 company apartments will be funded by 2028. With an average apartment size of 70 square meters, the administration calculates an “average funding expenditure” of 217,000 euros per apartment. The report also explains why this support is necessary: A company like SWM wants and should build company housing, but for legal reasons it is not allowed to make losses. The funding program counteracts this.
Simone Burger (SPD) said that the city needed “allies for affordable housing,” “we have therefore already done a lot for cooperatives,” and now we are also supporting companies that build factory housing. Anna Hanusch (Greens) added that they now wanted to “make this program public,” and she also appealed to private companies to increase their involvement in company housing construction, “they can no longer hide.”
Winfried Kaum from the opposition CSU, on the other hand, sees the program as “not a significant step to advance the attractiveness of company housing, but rather an academic and bureaucratic continuation of Sobon 2021,” which the CSU considers to be too strict. In addition, Kaum criticized the rent cap of 15 euros per square meter as too high, “for 70 square meters that’s more than 1000 euros cold, that’s too much for a single nurse.” The CSU/Free Voters faction therefore voted against this upper limit, but overall they gave the model their okay.
Fritz Roth from the FDP agreed that there was a need for company housing in the city. However, he believes the model presented is too complex and the expected return is too low: “1,000 apartments in the next four years, that would be 250 per year, if we’re lucky, for 1,000 people per year.” Addressing the coalition, he said: “You have to think again about whether that’s enough for you or whether you want to go one step further.”
Brigitte Wolf (Left Party), however, raised the question of whether the reallocation of funds would endanger other funding models, for example for cooperatives: “What happens when the budget is exhausted?” An employee of the department replied that such a scenario was currently not to be feared. Wolf also requested an amendment that the right to the company apartment must be retained even after retirement and that there must be a sufficiently long notice period for the rental agreement after termination. According to the administration, such questions are usually regulated in companies through works agreements. However, the city council decided to include Wolf’s suggestion as a note in the minutes of the resolution.