B-Schein- A tool to provide affordable housing in Germany.

Wohnberechtigungsschein or B-Schein for short is a tool/license used by Germany to both fund the development of social housing units and to provide a ongoing subsidy.   The details are confusing so I will attempt to clarify.  Below is an explanation of the B Schein Program.  I will use Hannover as the example city and GBH, the social housing company in Hannover, as the example provider of social housing.

B-Schein– B Schein is one of the major tools for developing and providing social housing in Hannover. It starts with Grundförderung:

  • Grundförderung– There are several layers to this category. First you should know this is ground funding to actually develop a unit. The next fact to understand is there are several layers to the funding.  In the USA, we classify low income households as low income, very low income or extremely low income.  The same words are not used but a similar train of thought it expressed in the funding.  First we will examine B-Schein.  Lets consider this funding level as extremely low income.  That means the ground founding is to develop units for really low income families/persons.
    • For a unit that is 50m2 or smaller, the State will give the GBH €20,000 per unit ground funding for the development.
    • For up to 60m2, the state contributes €18,000 per unit.
    • For larger bedroom sizes of 4 or 5,  the state funds up to €28,000.
    • There is another category called B Schein +20. These are units  for people at the poverty level or up to 20% higher.
    •  The ground funding in this category is lower at €15,000 per unit regardless of size.
    • The affordable housing developer can also develop up to 60% over the poverty level but will not receive any ground funding for the housing unit.

Before I move on to subsidy’s and rent, I will briefly speak about developing affordable housing in Germany.  Developing affordable housing is complex and takes a collection of partnerships, funding sources and ingenuity to happen.  These difficulties may vary from country to country but the overall difficulty remains the same.  Outside of the ground funding, a social housing company will often need to kick in funds of its own as capital.  After that, the company must look to other sources to finance the development.  Some examples include:

  • KFW Loan- This is a bank that was funded originally through the Marshall Fund after World War II. It is a private bank that was established so the government would not have to take on all of the debt of funding housing development. All of the money that comes back out of the program goes back in to continue the funding of affordable housing. This works but sometimes it takes time for the money invested into a project to come back into the fund at a level that enables more funding.
  • KFW Program 153 is for new building for with energy efficient standards.   The standard is 70 Kilowatt hours for the housing. That is considered an energy efficient house while Passive Housing standards is at 55-40 Kilowats. The loans are low interest and what a company receives depends entirely on how much is being built. The max a developer will receive is €50,000 per unit for development purposes.
  • Developments consist of several pools of funding. As written, KFW is one pool, a Federal bank loan at .5% interest for 20 years is another. The social housing company often has to use some of its own capital to make a project work.

 

Everything written about up to this point covers only the development of affordable housing.  Next comes the subsidy.  The state government funds the social housing to keep them operationally affordable after development.  Below is a description of the ongoing subsidy.

Zusatzförderung: The best translation is a monthly subsidy.

  • The monthly subsidy lasts for 15 years for the B-Schein unit and it is €1.70 per m2 with the possibility for an additional €.50 for larger bedroom sizes.
  • The monthly subsidy drops to €1 per m2 for the B-Schein +20 units but also lasts for 15 years.
  • The monthly subsidy for B-Schein units +60 receive €2 per m2 for the first three years and then it drops to €.25 for years 4-10.
  • Sonderförderung: This is special funding that is available for affordable housing units. The amounts differ but here are a few examples. The amounts change depending on the level of poverty the unit is meant to serve.
    • Passivhausstandard: This word means the unit has met a certain passive housing standard that is similar to LEED ratings in the USA. A housing developer can receive an extra 10% for developing to a certain standard.
    • Genossenschaften 500 housing units or less: This special funding is for smaller housing cooperatives which are more prevalent in Germany than the USA. In smaller cooperatives, they can receive up to an additional 10% funding.
    • U.A. rollstuhlgerecht: This is special funding for developing units that are considered accessible. The state will grant an additional €5,000 funding per  accessible unit.
    • Gemeinschaftsraum: The government will grant special funding for common rooms in developments that are for handicapped or mentally handicapped persons. The idea is to help foster social integration. The funding for this type of room is €.50 m2 per month.

Rent for the units:  The rent for social units funded by the Federal State are set by the State with the same policy being followed by the city.  In some sense the idea is similar to the 30% of income rule set by HUD for Public Housing and Section 8.  Tenants will only pay a set rent in most cases.  The difference in the system in Hannover is tenants will pay by m2 instead of an income based program.  Below is a table to help differentiate the amount of rent paid by various categories.

Program Rent Paid Extra Allowed to be charged for Passive House standards Max Rent can be raised over 3 year period Contract Term
B-Schein €5.40 per m2 €.30 per m2 7.5% 15 Years
B Schein +20% €6.50 per m2 €.30 per m2 7.5% 15 Years
B Schein + 60% €7.00 per m2 with Passive House standards 15% 10 Years

 

Administration of B-Schein:

One of the major differences in how affordable housing in Germany is administered vs. the USA is the relationship the city and Federal State play in the programs.  From a strictly operational viewpoint, the city is the agency that has the most active role in qualifying low income families for the programs.  As mentioned, there are several programs that  house families in Hannover.  The B-Schein program connects most directly to the social housing units in Hannover.

  1. A low income must register with the City before having any chance to receive housing or other financial assistance.
  2. The actual process for applying for social housing in Hannover is similar to what anyone in the USA would go through. There is a long form called a (Antrag auf Wohngeld-Mietzuschuss) or an application for housing assistance that must be filled out.
  3. This form would be the same one filled out to apply for Wohngeld (a rental subsidy) or B-Schein (social housing unit).
  4. The form requests the applicant’s personal information including family size, family information regarding the current unit someone is living in, utilities paid, how much money is being earned, the type of health insurance you have and a few other personal details.
  5. Once that process is complete, you will receive one of two types of assistance.

The city must work extremely close with the social housing company to fill empty units.  I am interested in the operational processes between the city and the company.  In my experience, adding additional partners to a process often slows down and complicates workflow.  I will spend more time with staff in 2015 to better understand how this partnership works.

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