Modern housing policy or the separation of instruments

After II World War a subsidy system called 1. Förderweg was implemented in West-Germany to cope with the challenges of housing shortage after and due to the war. In the late 80ties of the last century this policy was left behind. During the first decade of this century public housing policy was based on the conception `Germany is built´and therefore there is no need to build new dwellings. After the GFC and the forthcoming European development, heavy capital inflows, low interest rates, and advantages within the common currency Germany experienced a relatively strong growth and with rather inflexible rents in the housing stock a felt shortage of affordable housing. Although migration is the dominant political topic, housing policy is becoming important, again. This paper based on a report for the Bundesverband der Deuschen Wohnungs- und Immobilienunternehmen (GdW) identifies possibilities of effective housing policy by separating the three main instruments of housing policy, the subsidy of the demand, the purchase of rights for housing, and the subsidy of the supply.