German building savings banks have strongly criticized the plans put forth by Federal Finance Minister Lars Klingbeil for creating a state-owned “Federal Company for Affordable Housing”. Industry leaders described the project, as reported in the “Handelsblatt”, as detached from reality and warned that it risks setting false expectations among citizens and families.
Stefan Siebert, CEO of LBS Süd and chair of the annual industry event, expressed deep skepticism regarding the proposed state-run housing company. He questioned the necessity of establishing such a broad, federal entity given the numerous existing municipal housing developers. According to Siebert, young families might mistakenly assume that the state will, going forward, guarantee access to sufficient affordable housing-a notion he called “illusory”.
Klingbeil originally proposed in April the creation of a federally owned company designed to act as both a developer and lender for housing projects. However, the building savings banks doubt its financial feasibility. Siebert assessed that achieving any noticeable impact on the housing market would require the federal government to commit enormous amounts of capital. Consequently, they view the plans as more of a “political pipe dream”. Instead of this scheme, they argue that political focus should be on facilitating private investments and easing the overall housing construction process.
