In Germany the term ‘social housing’ is rarely used and legal texts generally refer to ‘publicly subsidised housing’ or ‘housing promotion’, which represents about 5% of the national housing stock. Today public intervention in housing policy in Germany is not linked to specific providers, but entails public subsidy of any kind of housing providers in exchange for the use of a dwelling for social purposes (enforcing income ceilings and lower rents) on a temporary basis.

It should be noted that social housing is, since 2006, entirely a competence of the Lander (provinces), which have implemented different programmes and funding schemes. Local authorities are in charge of ensuring affordable accommodation for those unable to secure adequate housing themselves, while the federal state remains responsible for housing allowances to individual households and rent regulation.

The institutional non-profit sector was dissolved in 1989, and at the same time extensive assets owned by municipalities were transferred to private market-oriented owners. Today providers of publicly subsidised housing include municipal housing companies and cooperatives (which constitute the traditional non-profit sector) as well as private landlords, commercial developers and investors with a variety of shareholders. From a legal point of view, all housing companies are considered market actors, although municipal housing companies act according to local policies and housing needs.

It is very difficult to give a comprehensive picture of the financial mechanisms for social housing provision because municipalities and provinces have a great deal of responsibility for housing policy and therefore there are no centralised records and because funding programmes have evolved over time.

In general, public subsidies (grants or tax relief) cover the gap between the perceived rent and cost rent. Public subsidies decrease progressively and at the same time the rent increases. At the end of the amortization period (typically 20 to 40 years for dwellings newly built with public subsidies, and 12-20 years for renovated dwellings) the dwelling can be let or sold at market rates.

In practice though, municipally owned companies often continue to operate the units as de facto social housing in terms of rents and access. Housing allowances are also available for people below certain income ceilings, notwithstanding whether they rent or own their house.

The target groups are defined by the legislation as households who cannot secure themselves with an adequate accommodation and need support. The policy supports in particular low-income households as well as families and other households with children, single parents, pregnant women, elderly, homeless and other needy persons.