Saxony receives millions for social housing construction – can we build now?

Saxony receives millions for social housing construction – can we build now?

In the coming years, the federal government will significantly increase its funding for social housing. As part of the planned measures, Saxony could expect an additional 25 million euros next year. This reports n-tv. However, the Bundestag's approval of the cabinet plans is still necessary before the money can flow into the Free State.

From 2025, Saxony will receive a total of 149.5 million euros in federal funds. Of this, around 50 million euros are to be made available from state funds. The Königstein key will be used for distribution, which means for Saxony that an increase to almost 75 million euros is expected at the beginning of 2027. For 2028 and 2029 the sum could even be over 99 million euros.

Business challenges

The discussion about social housing is not new. The left-wing faction sharply criticizes the current situation in Saxony, where only 2,141 social housing units were built between 2017 and 2024. It states that at least 11,095 new units are urgently needed. A problem that is clearly visible to everyone is that the currently available federal funds, which could soon be used up by rising construction prices, cannot come close to covering the need. The L-IZ highlights that 3,450 subsidized apartments are needed in Leipzig every year, while only around 10% of this number are realized.

The left-wing faction led by Juliane Nagel is therefore calling for a comprehensive reform of social housing funding. This should adapt the funding rates to the rising construction costs, take into account the asking rents and secure the socially connected apartments in the longer term. One proposal also calls for funding to be given primarily to municipal and non-profit housing companies in order to ensure permanently affordable housing.

Outlook on federal funding

The federal government plans to continually increase funding for social housing in the coming years. A total of 4 billion euros is planned for 2026, 5 billion euros in 2027 and 2028 and even 5.5 billion euros for 2029. However, these figures are linked to corresponding co-financing from the federal states. Saxony must therefore provide 30% to utilize federal funds, which is at least under discussion.

The Left has already called for co-financing to ensure that the further requested federal funds are actually invested in social housing. It remains to be seen how the Saxon government will respond to the challenges and whether the hoped-for funds can actually flow into the urgently needed projects.