In Germany, the number of social housing units has almost halved since 2007, falling from 2.3 million to just 1.05 million. This represents a decline of around 48.6 % – meaning that almost one in every two social housing units has been lost in less than two decades. ​ It is only since the late 2010s that the decline has not been quite so steep, but there is still no sign of a genuine recovery in the housing stock.​

Why the number of social housing units is falling

A key reason lies in the system itself. Social housing units are subject to a fixed-term commitment; once this expires, owners can let the flats at market rates. Year after year, tens of thousands of flats are released from this commitment – significantly more than are being added through new-build projects.​
Added to this are high construction costs, rising interest rates and strict regulations, which make many projects uneconomical. Construction costs for new-builds alone have risen by 45.7 % since 2019 (by comparison, consumer prices rose by 21.4 % over the same period, GdW). The target set by policymakers of 100,000 new social housing units per year is far from being met; according to the GdW, only 27,000 new flats were completed in 2024. ​

When a million social housing flats are not enough

Whilst the stock is shrinking, demand is growing. According to calculations by the Pestel Institute (“Social Housing Monitor 2026”), there is currently a shortfall of around 1.4 million flats in Germany. Around half of the more than 23 million tenant households would be eligible for a housing entitlement certificate (WBS), yet in reality only around one million such flats are available nationwide.

The consequences are also evident on the private market: by the end of 2025, asking rents had risen twice as fast as general inflation, whilst the number of property listings fell significantly (GREIX Rent Index). In major cities such as Munich, Frankfurt and Cologne in particular, this is putting pressure not only on low-income earners, but also on young people, students and apprentices who are moving out of their parents’ homes and looking for their first flat of their own. Added to this are older people who wish to move into smaller, accessible flats and find that these are often more expensive than their previous homes.

Hamburg as a positive example, Saarland as a warning sign

The infographic highlights the regional differences: in 2024, Hamburg had 4,264 social housing units per 100,000 inhabitants, the highest figure of any federal state. In Saarland, by contrast, there were only 82 social housing units per 100,000 inhabitants in the same year – a fraction of Hamburg’s provision level.​

For years, Hamburg has been regarded as a model for an active social housing policy. The city continuously promotes the construction of new housing, retains ownership of its municipal housing stock and is thus able to counteract the decline in social housing to some extent. In Saarland, however, the situation is different. One reason for this is a comparatively very short tenancy commitment period of just 10 years; in other federal states, a commitment period of 25 years is the standard (vdk Saarland).

What the future might hold

There is currently much debate in Germany about the housing crisis, yet the most important buffer in tight markets – social housing – has been eroded over the years. The few positive exceptions, such as Hamburg, show that political decisions can make the difference between a city where social housing forms a stable foundation and a market in which affordable housing becomes a scarce resource.