Housing shortage highlighted

Munich Mayor Christian Ude, who chairs the German Association of Cities, told the Dusseldorf-based newspaper Rheinischer Post that left-over property, vacated by NATO and German Bundeswehr forces in the wake of the Cold War and German reunification in 1990, offered "great potential" for affordable housing.

"The federal government also has a social responsibility for urban development," said Ude, who ends his term as chairman at the association's three-day congress which opens in Frankfurt on Tuesday.

The association's designated head, Nuremburg Mayor Ulrich Maly, said residing in large German cities must not become a luxury just for the country's rich.

Germany, he said, needed a "completely new form" of subsidized housing for disadvantaged residents. The current availability of low interest rates used by real estate investors was not solving the housing problem, including rising rents, said Maly.

Low-income households desperate

This follows a warning from Ude in February that in many cities, including those with universities and flourishing industrial hubs, a "growing number of people are finding it increasingly difficult to find housing."

The situation applied in cities in high-price regions but also more and more to households with limited incomes.

"The situation is a string of cities is dramatic," Ude said, adding that the federal government should also raise housing allowances for families dependent on welfare funding.

Converted land and premises once used by German and foreign military forces must be sold at top market prices under current legislation governing Germany's Institute for Federal Real Estate. Each year, the special agency arranges 3,000 sales of formerly public and military-related properties across Germany.

Mounting local body debts

Many of Germany's local authorities have struggled for years with mounting debts, some running into the billions of euros, partly, they say, because of obligations set by federal legislation to pay welfare allowances to poorer residents out of municipal budgets.

A recent study published by the German government showed that half of Germany's 82-million population owns only one percent of all assets. The richest 10 percent own 54 percent of all assets in Europe's largest economy. Between 14 and 16 percent of people in Germany are classified as living in poverty or facing the risk of impoverishment.

A recent book, "Unsocial" by Stern magazine reporter Walter Wüllenwebers, argues that German society is in "a state of disintegration." German society's upper and bottom layers had "withdrawn into parallel societies" and no longer contributed to funding communal entities, the reporter wrote. The middle class had been left carrying the taxation load, he added.

The municipal association comprises 208 cities as direct members, including Germany's three city states - Berlin, Hamburg and Bremen - as well as 3,200 member cities grouped within local associations. Its head offices are in Cologne, Berlin and Brussels.

ipj/jr (dpa, AFP)