Housing support must be stepped up: rents have been rising rapidly for some time now, even in the areas surrounding Leipzig and Dresden

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It will not be enough, even though the Saxon Ministry for Regional Affairs announced on 13 July: “From with immediate effect, 199.3 million euros is available in Saxony for new grants for the construction and modernisation of social housing. That is over seven million euros more than last year. This funding will enable around 740 new social housing units to be built in Dresden and Leipzig over the next few years. It will also allow around 1,600 existing flats across the Free State to be modernised and rented out as affordable housing on a long-term basis.”

“There is one thing above all that helps tackle the housing shortage in major cities: building more again,” explained Minister of State Regina Kraushaar. “With funding from the federal government and the Free State, we are providing a clear incentive for investors who wish to create affordable rental accommodation in tight housing markets.”

200 million euros sounds like a lot. In fact, social housing is one of the largest areas of funding in the Free State. The state government even intends to expand this funding further in the coming years. According to the government’s draft proposal for the 2027/2028 biennial budget, presented on 30 June 2026, funding for social housing is set to rise from 281.3 million euros in the current biennial budget to 473.6 million euros. This is made possible primarily by higher allocations from the federal government. The state’s share of co-financing would rise from 67.2 to 111.8 million euros.

Nevertheless, this is still not enough new social housing to counteract the massive rise in rents in the major cities – and even in their surrounding areas.

Rapid rise in rents is also affecting the surrounding areas

This is highlighted by Juliane Nagel, spokesperson on housing policy for the Left Party faction in the Saxon State Parliament.

A yet-to-be-published empirica report commissioned by the state government (see plenary minutes of 25 June 2026, p. 40) shows that the problem of rapidly rising rents is spreading to the outlying areas of the cities of Dresden and Leipzig. According to the report, local authorities such as Schkeuditz, Rackwitz, Radeburg and Heidenau are experiencing a high rental burden: In these areas, people are forced to spend too large a proportion of their income on housing costs. A similar picture emerges from the annual questions on rent trends tabled by Juliane Nagel, the housing policy spokesperson for the Left Party parliamentary group (most recently Parliamentary Paper 8/3981).

“Excessively high rents are placing a burden on many people, not only in Dresden and Leipzig, but also in the surrounding districts. An ever-increasing proportion of Saxony’s housing market must be regarded as under strain,” states Juliane Nagel.

“Consequently, we must also expand social housing and protective measures such as the rent cap. The market does not create affordable housing – the state must do so. We are pleased that the government is meeting our demand and drawing down the additional federal funds for Saxony, as shown in the draft 2027/28 twin-year budget. However, these funds must be put to use in construction. This requires new funding conditions: for instance, the grants must be adjusted to reflect the rise in construction costs, and longer rent control periods must be introduced, as we have demanded (Parliamentary Paper 8/4162).“

The Left in Saxony genuinely sees the solution solely in the creation of affordable housing – that is, in property-based funding that lowers rent levels.

“Subject-based funding – that is, social benefits such as housing allowance or accommodation costs – is used to finance the profits of property developers. This logic must be broken,” demands Nagel. “We want to build up a non-profit housing sector. This is possible if the money that currently has to go towards individual support can instead be channelled into property-based support. Nevertheless, we oppose the federal government’s plans to cut housing benefit. I am putting a question to the state government on this matter (Parliamentary Paper 8/7498). As long as people are unable to afford their rent, this support is urgently needed.”