Frankfurt: Why the city shouldn't buy enough apartments - a financial expert explains.

Frankfurt: Why the city shouldn't buy enough apartments - a financial expert explains.

It is paradoxical: Anyone who buys an apartment building in Frankfurt in so-called environmental protection areas must, among other things, assure the city that they will not leave the property empty. If the buyer is not willing to do so, until two years ago the city was able to purchase the property itself via a right of first refusal. But that wasn't a guarantee that the living space would then be used, as the poor condition of a house in the Bockenheim district shows. In this case, the environmental protection only protects the standstill. However, there are still politicians who believe that the city cannot acquire enough apartments from private owners. You are following a wrong path.

Renovation backlogs and vacancies are not a recent problem, but also occur in properties that have belonged to the city for a long time. The municipality is no better landlord than a private owner. Quite the opposite: she is overwhelmed with managing her properties. This has various causes. Given the enormous school construction program, there is hardly any personnel capacity for smaller renovation tasks. In addition, the structure of a public administration is not particularly well suited to the management of housing. Skilled workers with real estate experience are difficult to attract to public service.

And because money is always tight and rent increases are difficult to implement politically, a significant maintenance backlog quickly accumulates. If a general renovation is due, the funds must first be applied for through a lengthy process. If there is any doubt, the priorities will be set differently.

The problem has been known for years. It is therefore right that the four-party alliance in Frankfurter Römer is now drawing the conclusions and wants to transfer the management of the city's apartments to a company organized under private law. It is obvious that politicians are primarily thinking about the municipal ABG Holding with its more than 50,000 apartments. But the implementation will not be easy. The company must act economically and is not the “bad bank” for neglected apartments that no one else wants to take care of.

Nevertheless, with its expertise, ABG is the right partner to get the city's housing stock back on track. Perhaps the city itself will also meet all the demands it makes of private owners and landlords.

Source: According to a report from www.faz.net