Getting Bonn building: providing affordable housing in a growing city

About the Affordable Cities blog series and #BetterUrbanHousing
People living in cities across the world are facing the effects of the housing affordability and cost-of-living crisis. OECD Champion Mayors recently endorsed the new “OECD Brussels Blueprint for Affordable cities and Housing for All” at the Brussels Urban Summit where they shared innovative solutions to tackle these challenges and drive more inclusive economic growth. They continue to drive efforts that shape a more affordable, equitable and resilient urban future. www.oecd-inclusive.com/champion-mayors/

Creating enough affordable housing is one of the greatest challenges facing the City of Bonn. Due to its attractive location and strong economy, the population of the City of Bonn has increased by 17.1% since 1991, from 286,869 inhabitants to 335,975.

For this reason, the city administration set up a project group, “Subsidised Housing in Bonn” which presented its findings in 2021. It set an ambitious goal: a maximum of 30% of disposable income should be spent on rent. Because only then do people still have sufficient means to live life to the full and participate in society. As a growing, attractive city, we must make it possible for people with lower incomes to live here and participate in our community.

Bonn is one of the cities in Germany where people have the highest average burden of rent. This is offset by public housing subsidies, which provide an incentive for developers to offer high-quality housing at affordable rents. In Bonn, there are currently around 10,000 apartments that are subject to such rent controls and allocated to eligible households. However, the supply of affordable housing is being threatened due to the continuous loss of housing from the system of rent controls. If the current trend continues, there will only be just under 4,300 of such apartments by 2030. This is far too few to meet the rising demand.

The Bonn Building Land Model

It is therefore my goal to take concrete measures to counteract the loss of housing.

One approach to this is the “Bonn Building Land Model”. This sets binding quotas for the construction of publicly subsidised housing. The objective of the Bonn Building Land Model is to create more affordable housing throughout the city and to ensure that developers contribute to the follow-up costs of the social infrastructure.

The “Bonn Building Land Model” creates a framework for urban development contracts, establishing clear and transparent expectations for all stakeholders involved in the planning process. At the heart of this is a requirement for planning beneficiaries to undertake to allocate 40% of the gross floor area of new residential developments to affordable housing and to make a contribution to childcare places in daycare centres (for projects with eight to twenty residential units with 850-2,100 square meters of gross floor area). The “Bonn Building Land Model” also applies for planning permissions for more than 20 residential units or 100m² of gross floor area of housing. For these larger projects, 50% of the residential developments must be allocated to affordable housing.

Getting more from municipal land

Another approach to creating more affordable housing is the new “Leasehold Model”. Under this model, city-owned land is generally leased out at a reduced rate. The lowered rate provides a major incentive for the construction of affordable housing, and the city also receives the right to access the land in the longer term.

Another component to support affordable housing is the introduction of the “Special Market Price”. This provides incentives to developers to compensate for revenues foregone by providing publicly subsidised housing on municipal land. At the same time, plots of land are only allocated subject to a 30-year fixed rent and occupancy period.

Providing affordable housing is one of the most essential tasks of our time

The creation of affordable housing remains a challenge for the entire city. Our goal is to increase the stock of publicly subsidised housing in Bonn from the current 6% to 15% in the long term. This will require the joint efforts of the federal government, the state of North Rhine-Westphalia and the City of Bonn. In the future, this will involve building up rather than out to reduce land use.

As Mayor of Bonn, I am also committed to socially just, climate-neutral urban development – a cause I am promoting in numerous bodies, such as the German Association of Cities and the Council for Sustainable Development. We will also look to ensure a good social mix in the neighbourhoods to prevent segregation and distribute available living space more equitably among people’s needs. Together we will build a better Bonn.

In Bonn, as in other large cities, we are facing the challenge that additional and, above all, affordable living space is urgently needed – at the same time, resources must be conserved on the way to climate neutrality. There is therefore great potential in the renovation and better use of residential buildings. For this, the municipalities need the support of the federal government so that the necessary financial and human resources are available.

Mayor Dörner

About the OECD Champion Mayors Initiative
Created in 2016, the OECD Champion Mayors for Inclusive Growth Initiative is a global coalition of mayors who meet on a regular basis to share their experience in the pursuit of inclusive growth in cities. Since its inception, over 100 different mayors from around the world have joined the Initiative, contributing their voice to the global debate, and making major strides in their cities toward youth empowerment, sustainable climate policy and support for SMEs. The Champion Mayors will meet at the Brussels Urban Summit on 13 June to drive change on improving housing affordability and cost of living for residents in their cities.

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