Three million senior living apartments needed by 2030 – Pestel Institute

Germany is facing demand for three million apartments suitable for the elderly to either be built or rebuilt by 2030, as the country becomes “really old” and increasingly impoverished in old age, according to a new study published by the Pestel Institute on behalf of the country’s building materials trade association, the Bundesverband Deutscher Baustoff-Fachhandel (BDB), and presented at the recent BUILDING trade fair (BAU-Fachmesse) in Munich. Affordable living space in particular is becoming scarce, and not only for the elderly.

The Hanover-based Pestel Institute is a private research organization which specializes in analysing subjects relating to housing and regional development, demography, sustainability and climate protection.

The problem is most acute in the cities, where every ninth inhabitant is living in an overcrowded apartment, according to Germany’s Federal Statistics Office. The rate of overcrowded apartments by "people at risk of poverty" in Germany in 2017 was 7%, with single parents being particularly affected by overcrowding (19%).

While this sounds bad, Germany’s housing shortage is still relatively low on a European comparison. In Poland, Hungary, Latvia, Bulgaria and Romania, over 40% of the population live in overcrowded apartments. According to the Federal Statistical Office, the EU average was 16% (in 2017).

However, overcrowding now can develop into a bigger problem. The researchers make the assumption that the proportion of senior citizens who depend on state support for their livelihood will increase from the current 3% to 25-30% over the next twenty years. No reliable figures currently exist for the total number of dwellings that are suitably barrier-free for these seniors.

Smaller apartments are often much more expensive today than the apartments in which people have lived for decades. According to economics researcher Matthias Günther, many senior citizens are facing being forced not only to leave their homes, but even to move out of their cities.

Verena Bentele, president of the social association VdK, said recently to the German Press Agency that for many pensioners it’s becoming a real struggle to pay the rising rents. “Only 5% of all older people are now living in apartments suitable for the elderly, while half of the 592,000 people receiving housing benefits are already over 65”

Rising rents along with falling real pension levels are leading rapidly to many pensioners being no longer able to afford their homes any longer, says the BDB. The need for much more affordable low-barrier housing to be built is becoming critical, together with widespread conversion of existing homes.

The study shows that from 2035, about 24 million people in Germany will be in the 65+ age bracket – about 6 million more than today. There must be a much stronger focus on building for the elderly, the report urges.

Stefan Thurn, the BDB’s president, said that a large part of the required senior citizens apartments will realistically have to be created by converting existing apartment. “German is facing a new construction decade of renovation for the elderly”, he said.

The researchers say that around €50 billion in investment will be required for age-appropriate conversion and modernization by 2030. The state must aggressively support this "gray housing conversion", with researcher Günther believing that this can only be achieved effectively with direct subsidies.

In its study, the Pestel Institute concludes that at least €500 million euros per year in subsidies are required for barrier-free construction and conversion to obviate the need for the clearly more expensive - and often not required - stationary care in a special care home, said Günther. On average, it costs around €16,000 to convert a home to be barrier-free. Stationary care is about €8,500 euro more expensive per year than ambulatory care, the study shows.

The study’s authors make a strong plea to offer affordable senior living in cities, where the elderly can continue to live in their neighbourhoods and retain their social links. For low-income households who do own property, there is a greater need for strong housing advice, particularly in rural areas. New forms of housing, such as community living, should also be experimented with, and policymakers at all levels need to address the problem a lot more urgently, urged the researchers.

Old age poverty is tenant poverty

Meanwhile, a separate new study from the Pestel Institute in Hanover comes to the blunt conclusion that old age poverty in Germany is largely tenant poverty – of being burdened with rent with little other incoming coming in. The study was commissioned by the Verbändebündnis Wohneigentum, the Alliance of Associations for Home Ownership.

The study examines how housing costs in tenant households have risen particularly strongly in the past 20 years, and are now twice as high as in owner-occupier households. It also shows how the savings ratio in owner households clearly outstrips that among those living as tenants.

The rate of home ownership has been static if not slightly falling in Germany for years, with only 44% of Germans owning their own properties in 2018. In 2010 it was actually 1.3% higher. Especially in the age group 25-40 the rate of home ownership has fallen steadily since 2002, an age group which numbers about 4.1 million tenant households, who could be building wealth in the form of property. Even the baby-boom generation of now 40-60 year olds, numbering about 3.1 million households, have a realistic prospect of owning property.