The federal budget freeze is also affecting housing construction in Munich. The Association of Bavarian Housing Companies (VdW) reported on Tuesday that a total of 561 planned apartments in the state capital and Augsburg were at risk. The reason is that the state development bank KfW has stopped a funding program for cooperative living that was only launched in 2022.
Apart from that, the association fears that further housing projects will also be shaky. In the new Munich district of Freiham, land for 525 cooperative apartments is about to be put up for tender. “How things will continue in view of the KfW program stop is anyone’s guess,” said association director Hans Maier.
Through the funding program 134, the KfW granted low-interest loans of up to 100,000 euros per household, which could only be used to purchase cooperative shares for an owner-occupied apartment. “With immediate effect, in coordination with the Federal Ministry of Housing, Urban Development and Construction (BMWSB), no more applications can be submitted in the product “Promotion of Cooperative Housing (134)” and all existing applications can no longer be accepted,” it says KfW website.
If these KfW loans are missing, Maier believes that many interested parties can no longer afford to join a housing cooperative. The head of the association criticized the funding stop for cooperative living as a “devastating signal.” The main members of the VdW are cooperatives, municipal housing associations and other companies oriented towards the common good. The budget freeze is the result of a recent ruling by the Federal Constitutional Court, which limits the federal government’s financial scope for new debt.