How to solve Germany's housing crisis

Olaf Scholz' government thinks it can solve the housing crisis by throwing more money at the problem. A combination of deregulation and higher taxes would be better.

Photo by Hernan Lucio on Unsplash

The Scholz government titled its coalition agreement 'Mehr Fortschritt wagen,' meaning 'Daring to make more progress,' and it didn't hold back on the ambition of its promises.

Regarding housing, the agreement pledged the construction of 400,000 homes annually, a quarter of which were supposed to be social housing.

Given that the record number of apartments built in any year this century is 306,000, that was a pretty swaggering target.

Through a massive increase in home construction, Germany would tackle the outrageous rents being demanded by landlords in an ever-tighter housing market... or that was the plan,

Could the government genuinely accelerate construction to the extent that, in effect, a city the size of Kassel would be built in addition to current construction every single year?

The short answer is - no, it couldn't.

Given what we know now, Scholz's team should have given the more humble promise of merely trying to maintain the rate of building that…