Housing policy of the Federal Republic of Germany: Subsidies of the housing industry, 1950 to 1980.

After the entry into force of major housing policy laws in the first 20 or 30 years of the Federal Republic of Germany (First and Second Housing Act; housing - premium law; Housing Benefit Act; Urban Development Act) the associated support ("subsidies", financial or tax benefits which affect households immediately, indirectly but with importance for their economic live, are accounted as subsidies for housing, this for example includes the promotion of savings capital formation in building societies) contributed significantly until the end of 1980 to the construction of 16,7 million apartments (of which 7.1 million were family homes) and to the modernization of housing stock. Wealth creation was influenced by decisive impulses.
Also direct transfer payments (public, housing premiums, etc.) and tax incentives (property tax reduction, accelerated depreciation under § 7b income tax act, depreciation according to § 82a of the income tax etc.) were made. The volume increased also by other not exactly quantifiable loss of tax revenue resulting from the regulation of the general tax law (including fiscal consequences of the build-owner model). Further losses of tax revenue as a consequence of not contemporary basic values need to be taken into account. “Insofar the research question of the author ‘Subsidies without counter performance?’ should deal with a much discussed problem because one can consider losses of tax revenue and allocation of funds as integral parts conscious political action and not as arbitrary distribution of election gifts. But actually this is a terra incognita. The extent of housing shortage after the Second World War did not leave room for such discussions. Therefor a systematic debate about the distributional effects of housing policy began relatively late, it started when in spite of the high volume of funding disparities in the provision of housing, the financial restrictions the public sector became more obvious.” (Kornemann, a. cit., p. 42 f.).
It is undisputed that the state aid has contributed significantly to the sustainable improvement of the housing situation in the Federal Republic of Germany. The author summarizes the main results of government incentives for equity capital formation and for rent or load reduction as well as for the development of the volume of housing construction in overviews and concludes with a critique of the services and instruments of official housing policy.

Data tables in HISTAT:
A.01 Government support measures for equity capital creation, in Mill. DM (1950-1980)
A.02 Government support measures for Rental or load reduction, in Mill. DM (1950-1980)
A.03 Volume of housing and construction completions, in billion DM (1950-1980)