The Behaviour of Large Housing Portfolio Owners in Growing and Declining Regions and its Political Implications

"The rental housing market plays an important role for the German housing supply. More than 40 % of the rental housing is provided by professional housing companies. Most of them are owned by the public sector. These companies face different development patterns of the housing market ñ and consequently different patterns of the development of cities and neighbourhoods. The paper draws on the situation in the German state of Hesse, which includes all types of regions between the boom region around Frankfurt and the Northern part with a strong decline in population. In a first chapter a forecast of housing demand of the Institute for Housing and Environment differentiated for counties, building types and number of rooms is presented. A central challenge for the owners is the fact that demand is shifting between the market segments even in equilibrated housing markets with low requirement for new space. It is important to remark that more small households do not cause a higher demand for small flats. The second chapter analyses different strategies of the market players ranging from disinvestment to the upgrade of old dwellings from lower to higher market segments. The paper concludes with a discussion of the implications for housing policy and urban planning. The parallel patterns of growth and decline lead to the remarkable situation that the administration has to provide subsidies for construction and demolition at the same time.""