Social Housing in the Growth City of Ingolstadt

Ingolstadt is a city without any particular focus on developing or providing social and affordable housing.  Outside of the typical funding mechanisms available to those willing to develop affordable housing, the city has no real plan.  Even without a a solid strategy, the city continues to develop a decent number of affordable units in comparision with other cities in Germany.

Ingolstadt is a smaller city with a population of around 125,000 people. I picked this city to study because it is a good example of a high growth city with a dynamic development taking place in the way of population growth. In 1989 the city population stood at nearly 100,000 people. Between 2000-2009 , the population grew at a rate of over 7.5 on average. Very few cities of 100,000 or more saw this type of population growth during the same period.  A lot of the growth can be attributed to the automobile industry with Audi employing around 32,000 people alone in 2010.

In Ingolstadt, the creation of high quality and attractive housing is more important than that of affordable or cheap housing.   Even the non-profit world is developing around 100 new units built per year at a cost of 9 euro per sq meter on average cold rent. The building rate for one and two bedroom homes is relatively high when compared with other cities in Germany. The price levels in Ingolstadt for rent or comparatively high to other cities across Germany.   It stood at 8.5 euro per square meter. This is not far from the city of Koln.   Despite the high rates of construction in Ingolstadt the prices continue to climb. The economic growth and population increase is putting continuing pressure on the housing market. The average rent offering in the city increased on average 14.7% between 2005-2010. In the upper third of the rental market, the prices increased a stunning 21% in the same time period.  The building focus continues to be on increasing the supply in hopes that it will bring down the overall costs.

Despite the high rent costs and the increasing population, the social housing units in the city still make up around 11% of the total market. That is relatively high in comparison with many other cities in Germany. Despite the total percentage of social housing units in the city, the overall rate of social housing as a percentage is declining. In 2000, the total number of social housing units in the city stood at over 15% of the total stock. The reduction in the number is not surprising as many other German cities are suffering from similar issues of social contracts expiring. Like the other cities, the number of new units being built cannot keep up with the decline. The low number of permits issues for affordable housing units in the early 2000’s became a problem as the population began to rise. In 2008 and 2009, those new affordable units being built doubled and tripled respectively. The recent rate of production put Ingolstadt at one of the highest rates of funded affordable housing in the country. The number compared to the overall construction activity is still low. For example is the construction of 3,001 new market rate units in between 2005-2009. That is compared to only 312 affordable units funded by the state being completed.

The municipal owned building company is the central instrument for Ingolstadt’s low income housing policy. Beyond this, there is no housing policy strategy or concepts. However, a procedure concept that will also place a focus on creating building land for high value residential space is on the drawing board. State subsidies are the exclusive instrument for subsidized residential construction. The housing subsidies are used intensely which puts the city in the upper range of cities with approval rates for new building per 1,000 residents. Another actor in Ingolstadt for the development of social housing is a nonprofit called St. Gunekar-Werk Eichstatt. Non-profits make up a key part of the social housing stock especially for households with extremely low income. They provide over 6,500 units or half the funded units using state funding. The average rent in these units is around 4.50 euro per square meter which is much lower than the average rental price being offered on the open market. The continuing population climb and low unemployment rate will continue to put a strain on the number of affordable housing units available in this town. The job of these non-profits to provide high quality low cost housing will continue to be difficult.

Information for this post came from the Bundesinstitut Fur Bau Stadt undd Raumforschung