Elsevier

Land Use Policy

Volume 107, August 2021, 105481
Land Use Policy

The cooperative urban land development model in Germany - An effective instrument to support affordable housing

https://doi.org/10.1016/j.landusepol.2021.105481Get rights and content

Highlights

  • Since the 1990s several German cities have developed and established cooperative urban land development (CULD) models.

  • Neoliberal changes in housing policy were pinpointed as the explanation for the late adoption of such inclusionary policy.

  • Real-world examples are presented on the implements and the economic effects of CULD model in the case of Berlin, Munich and Stuttgart.

  • Local CULD are flexible municipal policy instruments to achieve socially equitable land use and has transferability to prosperous urban regions.

  • The land use values increase of CULD refinanced the desired urban development goals and offer affordable housing stocks for socially mixed cities.

Abstract

Several international studies have already mentioned various policy instruments to promote the sociallymixed housing policy that supports many cities to achieve inclusionary housing goals. One of the greatest challenges facing cities in Germany is the current housing shortage, especially of affordable housing and the provision of adequate social infrastructure. The main causes are the strong influx into the cities and the rapidly rising land prices. To solve these problems several German cities have developed and established cooperative urban land development (CULD) models. This study aims to review inclusionary housing policy and present a firm introduction on a land development policy instrument CULD that supports among other targets the creation of affordable housing in Germany. It includes a description of this model that has social, economic and planning goals.

Our research approach relies on a content analysis incorporating related literature, city documents and practical projects. Under the CULD system, the increase in land value through public planning and development measures is used to cover the entire development and infrastructure costs. Furthermore, landowners or investors benefitting from urban planning are legally committed to provide a certain quota (e.g. 30%) of their developed property for social housing as well as to ensure socially mixed city districts. There has been some debate on whether this arrangement can produce a sufficient stock of affordable housing. In this article, we argue that local CULD models are powerful land management instruments to achieve socially equitable land-use, and increase the potential to transfer land in such a manner that it can enhance the prosperity of the urban regions. They can utilize the land value increase through urban planning and public infrastructure, for refinancing expenditures of urban developments, and can provide a sufficient stock of affordable housing to local residents to create social mix in cities. In this way, CULDs can make a significant contribution to the economic and social objectives of sustainable urban development.

Introduction

Strategic development plans for urban land often seek for solutions to meet requirements regarding the supply of affordable and especially social housing that otherwise may not be provided by the private sector. Several criteria (low income, persons without income in household etc.) must satisfy the access to social housing. However, there are broader target groups that each require affordable housing. Hence, a more flexible housing policy is required. With more flexibility and more supply of affordable housing for the larger number of people who are in principle eligible for social housing allocation, can benefit from the social housing supply. From the point of social fair urban development, two goals are the focus of attention: The first is to provide a quantitatively sufficient supply of affordable apartments for all types of low income households and the second is to achieve socially mixed residential areas. This article deals with approaches that use municipal sovereignty to draw up development plans to ensure the social benefit and improvement of the development project in cooperation with landowners. In this way deals and contracts can be struck between the city authority and landowners to meet the local demand for affordable housing. Several international studies have already considered various policy instruments to promote socially mixed housing. Many states and cities have adopted the so-called “inclusionary housing policies” latest since the 1970s that have been well researched (Calavita and Mallach, 2010, Sunikka and Boon, 2003; Ruys et al., 2007; Gurran and Whitehead, 2011). Some recent pieces of literatures are critically discussing the issue of spatially inclusive urban space development, where socially mixed affordable housing policy instruments should be revisited for securing the right to the city (Fainstein, 2016; Hartmann and Jehling, 2019; Uitermark and Nicholls, 2017; Uwayezu and de Vries, 2019). However, research so far has insufficiently addressed how trajectories and practices of inclusionary housing policies take shape and to which extent these contribute to the goals of sustainable urban development. Hence, there is a need to evaluate to which extent locally adopted instruments are effective when aiming for affordable housing.

Over the past decade, many German cities have introduced a so-called “Cooperative Urban Land Development Model (CULD)” i.e. Modelle Kooperativer Baulandentwicklung (Drixler, et al., 2014). This strategy pursues similar objectives as the inclusionary housing approach (i.e. social mix to prevent segregation, affordable housing, and recovery of infrastructural costs). The concept has been discussed since the 1990s, first for passing the costs of building land development to the property owners and later to solve the problem of affordable housing (Koetter, 2014, 2018). In particular, a survey of local authorities found that a common set of urban development problems, namely high land prices, scarcity of improved building land, affordable housing shortage, arising cost of land improvement, increasing demand for housing because of increasing urbanization, are often the driving forces behind the adoption of CULD (Dransfeld, 2009). Efforts are being made to disseminate the positive experiences and successful strategies of these models to as many municipalities as possible through guidelines (Koetter et al., 2020). Various policy debates have considered the impacts, specifically the advantages and disadvantages of CULD (Drixler et al., 2014; Koetter, 2018). This paper answers two research questions: (1) Did the neoliberal changes in housing policy contribute to the introduction of inclusive housing in Germany? (2) What are the potentials of the CULD model to promote and finance the construction of affordable housing and socially mixed neighbourhoods? Therefore, some insights could be highlighted on the strategies in German cities that have nearly been neglected in scientific discussion until now. In their seminal book, Inclusionary Housing in International Perspective, Calavita and Mallach, (2010) pointed out that “Scandinavian countries and Germany tend to use inclusionary housing sparingly if at all”.

In order to answer the research questions, we examine the CULD model according to its social, economic and planning targets. As a method, we use the content analysis approach on the basis of related pieces of literature, city documents and practical projects. This paper is organized as follows: Section 2 presents a brief review on inclusionary housing policies in the international and German national context. Section 3 introduces the CULD model by including legal arrangements, implementation process and principles. Practical project cases and exemplary adequacy test in Section 4 show the possible economic burdens and social benefits for city and investors. Section 5 discusses the potentials of CULD to achieve its goals. The article concludes with possible further research scopes in Section 6.

Section snippets

International examples on inclusionary housing

Since the early 1970s inclusionary housing has been employed in the United States to combat the negative trend of ethnic and social segregation. In reaction to the curtailing of federal spending on public housing under the neoliberal Reagan administration of the 1980s, American cities adopted such inclusionary instruments to secure the availability of affordable housing. In some cases, they even strove to delegate the burden of supplying affordable housing to private developers (Calavita et

Objectives and targets of CULD model

The idea and basic functions of CULD are for a municipality to sign an urban contract with potential developers or landowners. In this agreements, the developers agree to bear the entire costs of necessary urban infrastructure facilities, urban planning and other development expenditures caused by the proposed residential development. In this CULD agreements the investors are also committed to creating a substantial percentage of affordable housing. In Germany, affordable housing should serve

Examples of projects realized under CULD

Since its adoption, many housing projects have been implemented under the CULD model. For instance, more than 150 legally binding development plans were created by the city authorities in Munich from 1994 to 2016, during which time more than 40,000 new apartments were built, of which about 14,000 were subsidized. Parkstadt Schwabing in Munich is one such example, where a former industrial site has been converted into an integrated city district with 1500 flats and office space for 12,000

Discussion of advantages and limitations

The CULD model is discussed by following three main targets: social, economic and planning (see criteria in Fig. 1). In the context of social targets, with the commitment to develop a noteworthy share of affordable housing within a newly developed area, the CULD clearly should have a positive effect on the number and quality of accommodation for households with lower incomes. CULD models not only aim to generate affordable housing but also to ensure a robust and socially balanced population

Conclusions: exploring economic and social benefits with the CULD model

The goal of this article was to present the concept of cooperative urban land development (CULD) as applied to affordable housing policies in Germany. Neoliberal changes in housing policy were pinpointed as the explanation for the late adoption of such a model of inclusionary housing. We elaborated on the implementation process as well as the economic effects of CULD. Under this model, the local authorities can implement their desired urban development goals without sacrificing housing

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