The City Council met: How Leipzig will continue to struggle to keep up with the demand for affordable housing in the coming years

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Leipzig is growing. Even now, at a time when the Free State of Saxony is once again forecasting a decline in population figures. There are many reasons for this. Young people, in particular, are moving into the city. But this has consequences for the housing market – an issue that has now also caught the attention of the BSW parliamentary group. After all, this is an issue that affects every voter: anyone looking for an affordable flat of the right size in Leipzig will struggle to find one. And the figures published by the Planning Department confirm this.

“The city administration estimates that, for the period 2025 to 2030 – assuming a constant amount of living space per inhabitant – there will be an additional need for around 17,500 flats. After deducting the housing that can be created from the existing stock (around 2,000 flats), this would result in a need for 15,500 new-build flats. Of these, 6,900 new subsidised flats would be required during the period in question. This is in line with the city’s funding strategy for applying for grants from the Free State of Saxony,” stated the City Planning Office, citing the figures the city is working with. Or intends to work with.

Because the city simply cannot secure the 1,200 to 1,300 subsidised flats per year mentioned here. The funding provided by the Free State is sufficient for half that number at best.

Application for affordable housing rejected

Nor has the Free State really made adequate provision, as Juliane Nagel (Die Linke), a member of the Leipzig State Parliament, noted on 4 September.
On that day, in the Infrastructure Committee, the CDU, SPD and AfD recommended that the State Parliament reject the motion tabled by The Left faction entitled ‘Housing must be affordable – create more social housing and do not let federal funds lapse’ (Parliamentary Paper 8/4162
).

The Left Party parliamentary group wants to step up the construction of social housing and therefore proposed renewing the funding guideline for “Restricted-rent accommodation”. Furthermore, the Free State should make full use of the federal funds for social housing construction, which are set to increase in 2027 and 2028. In the government’s draft budget for 2027 and 2028, 473.6 million euros are earmarked for this purpose, compared with the 281.3 million euros in the current two-year budget.

“It is encouraging that the federal government is transferring more money for social housing construction. But even that will not meet the demand,” noted Juliane Nagel, her parliamentary group’s spokesperson on housing policy.

“The rent and housing crisis has long since spread beyond Saxony’s major cities. In many smaller municipalities, too, the burden of rent is now enormous. That is why we are pushing for social housing construction, so that as many people as possible can find affordable accommodation. It is good that the state government is meeting our demand and intends to co-fund the additional federal funds for social housing construction.

The pace so far has been sluggish: in 2025, only 421 social housing units were completed using funding from the state’s guidelines on rent-controlled housing, nearly 400 of which were in Leipzig. However, around 1,300 new social housing units are needed there every year. The situation is similar in Dresden. On top of this, other local authorities also face tight housing markets and need funding.

What is needed, however, is not just higher grants, but also different funding conditions. For instance, construction cost grants would need to be regularly adjusted in line with price trends, the rents to be charged would need to be capped at the level of accommodation costs, and longer rent control periods would need to be introduced – at least 40 years instead of the current 20. The Saxon funding framework for social housing construction must be revised. This was also emphasised during the expert hearing in the Infrastructure Committee
.”

When families have to compete with single-person households

And this funding amount, which remains too low and is tied to far too short a commitment period, naturally has consequences for Leipzig. There is a particular shortage of available flats in the affordable sector, whilst the housing shortage, on the other hand, is fuelling the rise in rents.

“There is no way for the city to increase the housing supply in the short term. However, the city supports low-income households and families by providing advice and helping them access subsidised housing, and is implementing local measures to expand the housing stock in line with demand,” stated the City Planning Office in its response to the BSW enquiry.

Furthermore: “As outlined in the publication by the Office for Statistics and Elections, the declining supply can be attributed to various reasons. One key reason is dynamic population growth: this growth, coupled with corresponding demand, means that available flats are snapped up more quickly and are no longer available on the market. Consequently, supply is growing more slowly than demand.”

In particular, there is a shortage of larger (affordable) flats for families. This was an issue that particularly interested BSW city councillor Eric Recke when he raised the matter at the council meeting on 3 September.

However, Thomas Dienberg, the councillor responsible for building and housing, could not really tell him anything more than what was already stated in the response from the City Planning Office: “The fact that the supply of housing for families is too low has already been taken into account in the Housing Policy Concept, and, amongst other things, the objective has been set to create, in particular, large flats for families in new-build projects. These housing needs are communicated to investors during consultations on building projects. When creating rent- and occupancy-controlled housing, priority is given to creating accommodation for households of four or more people, alongside that for single-person households.”

After all, it is not only families who are searching ever more desperately for flats. In Leipzig, there are also an increasing number of single-person households, a proportion that is growing even more rapidly. And so, according to Dienberg, investors are deciding, first and foremost, to meet the huge demand for studio flats.

The surrounding area isn’t really the problem

And when households in Leipzig can no longer find a flat, they logically look in the surrounding areas. This is an issue that the LVZ recently brought to the fore again. With a four-year delay, as the City Planning Office noted: “Migration between the city and its surrounding areas is not a new phenomenon. With regard to the neighbouring districts of Leipzig and Northern Saxony, net out-migration peaked in 2022. Since then, migration losses have decreased.

Families moving to the Leipzig hinterland are likely often doing so with a view to buying their own home, particularly as land prices are lower in the Leipzig hinterland and home ownership becomes more affordable than in Leipzig. However, other individual reasons for moving usually come into play as well. In this respect, from the city’s perspective, it is less a case of displacement and more a matter of individuals realising their housing aspirations in the surrounding area.”

A bold theory, said Recke. But Dienberg himself pointed out that it is, of course, only a theory. Even though public surveys confirm that it is often families who are fulfilling their dream of owning their own home in this way – a dream that is becoming increasingly difficult to realise in the densely populated urban area.

But Dienberg’s answers also highlighted just how limited the city’s scope is for regulating the housing market. The city is, of course, trying to do so through its own housing association, LWB. But the figures show that the subsidies provided are simply not enough to meet the constant new demand for affordable housing in Leipzig.