Number of social housing units in Germany continues to decline – despite multi-billion euro program

Social housing units are built or modernized with state subsidies and must generally be rented out at favorable conditions for 20 or 30 years as a result. When the period expires, rents can rise by up to 20 percent within three years. Since particularly large numbers of social housing units were built in the 1990s, a corresponding number are currently falling out of binding.

As the Pestel Institute notes in its "Social Housing Monitor 2026," social housing units account for only a good seven percent of all rental apartments in Germany. Nationwide, there were around 1.05 million registered social housing units at the end of 2024 – by the end of 2025, there were about 20,000 fewer.

North Rhine-Westphalia is particularly affected: According to federal government data, the stock at the end of 2025 was just under 400,000 social housing units. In NRW alone, around 180,000 apartments will fall out of binding over the next ten years. Last year, around 8,000 new social housing units were built in NRW, but at the same time more than 26,000 apartments and residential home places dropped out of the subsidy program.

Situation in North Rhine-Westphalia

Matthias Günther of the Pestel Institute emphasized in a WDR interview that politicians had in the past focused primarily on demand-side subsidies: "In der Vergangenheit hat sich die Politik auf die Subjektförderung konzetriert, also einzelnen Haushalten über das Wohngeld geholfen", so Günther.

Left Party MP Caren Lay criticized the federal funds as insufficient. "Diese Mittel braucht es jährlich - gerade jetzt, wo der private Wohnungsbau stockt", she said. Lay also stated: "Bis zu einer Million Wohnungen würden fehlen."

Political reactions

Federal Construction Minister Verena Hubertz wants to counter the trend with a package of measures. By 2029, 23.5 billion euros are to flow into social housing construction at the federal level. In addition, she announced that approval procedures would be deregulated in order to speed up construction.

The federal government also extended the occupancy binding in 2025 in order to counteract the loss. However, total housing construction output in Germany fell in 2025 to 206,600 completed units, according to the Federal Statistical Office – a decline of 18 percent or 45,400 apartments compared to the previous year. This is the lowest figure since 2012.

Subsidies in NRW

According to its own figures, the state of North Rhine-Westphalia is providing 2.4 billion euros for subsidized housing – more than ever before. To maintain the stock alone, however, experts say around 20,000 new social housing units would need to be created in NRW each year – in fact, only just under 2,000 per year have recently been newly built or preserved.

Overall, a structural problem becomes apparent: demand for affordable housing is growing, while at the same time the stock of social housing units is shrinking. The federal government is relying on deregulation and higher subsidies; whether these can reverse the trend, however, remains uncertain.

The debate over affordable housing thus remains on the political agenda. The Left Party and social welfare associations are calling for significantly higher investments, while the federal government and the states are counting on bureaucratic relief and existing subsidy instruments. What is clear is that, according to the Pestel Institute's assessment, the problem cannot be solved by demand-side subsidies such as housing allowance (Wohngeld) alone.