faq
Residential projects promise affordable rents, democratic participation and a lifelong right of residence. But community can also cost time and energy. Is it worth getting involved in the housing project? An overview.
Rents in Germany are at a record level, and the high interest rates are already heralding the next price shock. But there is an alternative: Community housing projects such as cooperatives and rental house syndicates take real estate away from the free market and offer cheaper housing.
What are communal Housing projects?
Community housing projects offer an alternative to living in a nuclear family or single household. The idea: Groups organize and design their housing needs together and independently. Private and shared spaces are often combined with functional architecture.
For example, the individual residential units can be slightly smaller. Additional communal space such as a roof terrace, a hobby room, a sauna or a spacious garden is possible.
What’s special is that the properties are often owned collectively – neither external landlords nor individual residents own the house alone. Instead, ownership is formally transferred to a cooperative or similar entity. The tenants thus become their own landlords. Since the corporations are not profit-oriented, the apartments can remain affordable in the long term.
What differences are there between the projects?
There are two widespread project forms in Germany: housing cooperatives and the tenement syndicate. Housing cooperatives are one of the classic project forms with more than 2,000 locations nationwide. Members, who are often future residents, first purchase shares in the cooperative. This shared capital can be used to make a down payment on a building loan, which is then paid off over the long term using the rental income.
Co-determination is firmly anchored: all cooperative members, regardless of their financial participation, have the same voting rights in the general meetings. Cooperative shares carry fixed interest and are paid out if you leave.
The tenement house syndicate, in turn, is a solidarity group in which over 180 house projects are organized across Germany. The residential ownership of the projects is each transferred to an independent GmbH. All roommates are automatically co-partners and can have a democratic say.
Unlike cooperatives, roommates are not required to contribute equity. Membership is possible regardless of your wallet. To finance the project, the group collects direct loans from friends, family members and other supporters until there is enough equity for construction loans. As with cooperatives, the direct and construction loans are repaid over the long term through rents.
Why is living in the projects cheaper?
The rental house syndicate and the cooperatives do not have to make any profits from the rental income. Rather, they base their rental prices on the real costs that arise for financing a residential building. For new buildings, the “cost rent” only includes the repayment of loans and interest, additional costs and the creation of reserves for maintenance work. Once the building loan is paid off, rents can fall even further.
Who is it worth it for? communal Housing projects?
Starting a community housing project is complex. Many years can pass before the groundbreaking takes place. “You need a lot of resources, a lot of know-how and contacts with architects. You also have to deal with complicated financing issues,” explains Sebastian Schipper, a professor at Goethe University Frankfurt who researches communal living. For many working people, parents or caring relatives, working on a new housing project is therefore difficult to implement.
In contrast, the work required for established residential projects can be significantly lower. The houses have already been built and responsibilities and organizations have been largely clarified. However, the waiting lists for existing cooperatives and other established projects are usually very long. It can take years before membership is possible and an apartment becomes available. The following applies to all communal housing projects: Membership makes sense if you have long-term plans to live in one place and do not plan to move frequently.
How does the current construction crisis affect the projects?
Exploding construction costs and high interest rates are also putting a strain on community housing projects. As a result, many initiatives are on the brink or are struggling to be financed. Some new building projects had to be abandoned in the planning phase.
Where construction is still taking place, future tenants will have to expect significantly higher rents. But it’s not just new construction projects that are suffering from this development. Existing cooperatives are also affected: rents are rising here because operating costs, maintenance expenses and modernization measures have become significantly more expensive. Although rents are currently increasing in communal housing projects, the increase should be lower in the long term than on the open market.