Housing costs have increased in Germany. Especially in major cities and metropolitan areas, prices for purchasing homes and renting apartments have gone through the ceiling. Exacerbating matters, in 2006 the federal government turned over the housing agenda to the states: this brought construction to a nearly complete standstill.

But cities and communes also prefer to invest in infrastructure projects. And construction is more expensive than ever before. In the year 2000, the cost per m2 for an apartment in a multi-unit dwelling was €?2210. In 2014 it had risen to €?3080.

So it’s no wonder that a chasm has opened up between supply and demand of affordable housing. The first question that must be addressed is: What makes housing so expensive?