Around one billion euros in old debts at housing companies

The Saxon housing industry is still burdened with old debts from the GDR era amounting to a good one billion euros. Of this, 596 million euros are owed to the companies of the Association of the Housing and Real Estate Industry and 435 million to the housing cooperatives, according to a minor question by MP Juliane Nagel (Left Party). The Left Party faction is calling on the federal government and Saxony to launch a debt relief initiative.

Leftists see injustice

"Even 36 years after state unification, injustices remain. These include the old debts of the municipal and cooperative housing companies in the East," said Nagel. They were the result of an "unprecedented act of enrichment by West German banks". "To this day, these legacy debts prevent investment and, in the worst case, housing has to be privatized." Since 2010, the public sector in Bavaria has lost at least 3,000 municipal apartments.

Example Mecklenburg-Western Pomerania

Nagel referred to the actions of the red-red state government in Mecklenburg-Western Pomerania. The state provides 25 million euros annually to relieve local authorities and the municipal housing industry of liabilities. "Such a debt relief fund would also immediately help to make the housing stock in Saxony fit - for barrier-free, age-appropriate conversions, for family-friendly floor plan changes and, above all, for energy efficiency upgrades."

Debt from GDR times was still valid

At reunification, the loan obligations of East German housing companies were classified as still valid. Many companies had to take on large debts during the GDR era, particularly for the construction of new prefabricated buildings. Until the end of 1993, the banks had suspended debt servicing on the initiative of the federal government, as it could not be serviced due to the low rents. Since then, interest and repayments had to be made on the loans, even if the apartments were permanently vacant.