The urban development report 2020 provides numerous facts and figures relating to all aspects of urban development in Germany and to the challenges faced. It takes stock of the wide-ranging engagement of the German government to promote local authorities and indicates options for future urban development.

790 million euros in government support for urban development

The German government is a reliable partner for local authorities in the field of urban development. Since 2018 it has provided about 790 million euros a year to promote urban development. The funding is spread across three programmes: social cohesion, vibrant centres, and growth and sustainable urban renewal. 
To this sum must be added the significant federal funding for affordable housing, social cohesion, municipal infrastructure, mobility and climate action. As part of the economic recovery and crisis transformation package and the future package to address the consequences of the COVID-19 pandemic, the German government has significantly increased its funding for inner cities, rehabilitation and climate action.

Five key statements from the report

Cities are attracting more people

For about 15 years more and more people have been moving into cities. With almost 900,000 new inhabitants, they account for nearly half of the rise in Germany’s population overall (figures for the period 2014-2018). Almost 90 per cent of the population of Germany live in a town or city; one third of them in a major conurbation with a population of 100,000 or more.

Because of the rapid growth, the demand for affordable housing in these urban conurbations cannot be met in full by building new housing in the short term. Small and medium towns surrounding major conurbations are also growing. They are relieving some of the pressure on the cities because many families with children are moving out of the cities into the surrounding area, where more building land is needed. This trend has been reinforced by the COVID-19 crisis. Only about 10 per cent of people in Germany live in rural communities.

The government is supporting housing construction

Supplying everyone with appropriate housing is a central goal of urban development policy. Thanks to the 2019 amendment to the German Basic Law or constitution, since 2020 the German government has again been able to provide long-term financial assistance for social housing construction. This financial assistance is tied and may only be used to build social housing. A sum of one billion euros a year is earmarked for this up to 2024.
About 310,000 families with children are currently receiving assistance under the German government’s Baukindergeld programme, which aims to help families with children buy or build homes. The German government is providing a total of 9.9 billion euros for this programme.

To create additional housing, the German government is helping local authorities to activate land for building. The Bundesländer (federal states) and local authorities can, for instance, draw on unused property that belongs to the German government or to the Deutsche Bahn railway company, and sell it at affordable prices to private housing construction companies to build social housing. In November 2020 the German government also launched legislation to mobilise land for building. It is currently making its way through the two chambers of the German parliament, the Bundestag and the Bundesrat.

Cities fit to live in everywhere

In all towns and cities, whatever their size and wherever they stand, people should be able to live well. Small and medium towns in less densely populated areas are important centres that generate livelihoods and sustain businesses. 

Economic transformation and an ageing population is resulting in empty housing in some towns and cities, and to more affordable rents. Here, new migrant families with less income can still find accommodation.
The increasing changes brought about by digitalisation and climate change are increasing the workload of local authorities. One of their responsibilities is to maintain or renew old town centres such that they can assume other functions. Good, environmentally acceptable transport links must be put in place inside and between municipalities. More green spaces in urban areas and open spaces are important for healthy living. 

Social cohesion is being fostered

Under the provisions of the social cohesion programme, the German government is fostering investment in neighbourhood centres, community centres, education facilities, libraries and multi-generational housing. For migrant families with lower incomes, childcare, schools and after-school activities are being developed. Federal funding hit a record level of 200 million euros a year in 2020. The consistently high level of funding over recent years is a confirmation that the government attaches a great deal of importance to this programme. By the end of 2019, more than 500 local authorities had received about 1.9 billion euros.

Socially acceptable climate action in housing stock

Climate action is important in all urban development programmes. Cities and local authorities applying for funding are required to realise climate change mitigation or adaptation to climate change measures. 

Climate action requires significant investment in buildings. Nevertheless, rents and owner-occupied properties are to remain affordable. Increased support for the energy-related refurbishment of properties not only eases the burden on owners. Tenants also benefit because their heating costs are lower. Property owners may only pass on some of the costs of modernisation work on rented properties to their tenants. In this way, the costs are shared fairly. More housing allowance and reductions in the renewable energy levy further ease financial burdens.