From the end of the 1960s, publicly subsidized rental housing was based on a significantly higher interest rate for equity and debt capital than is the case today when calculating cost rents.
At present, a maximum return on equity of four percent can be applied; at the same time, senior mortgage rates are below four percent and currently even below 3.5 percent.
Since it can be assumed that the owners of the subsidized rental apartments will no longer pay the original interest rates, the cost rents would have to be adjusted downwards. This could create scope for financing the energy refurbishments of these portfolios, which were essentially completed before the 1. Heat insulation ordinance of 1979 have arisen.
This could also significantly mitigate the maximum eleven percent annual allocation of investment costs to rent that has been possible to date. Overall, the resulting rent would also be below the cost rent at that time
Preliminary remark of the state government:
For housing that has been built by 31. December 2002 due to II. If the property has been subsidized or is deemed to have been subsidized, the cost rent (average rent in accordance with the German "Covenants") is usually taken into account when the funds are approved. § 8 a stipulated. A change only occurs if the total cost, funding, or ongoing expenses have changed and a different approach is mandated in the profitability calculation.
The return on equity in cost rent is calculated in accordance with the Ordinance on Housing Calculations Under the Second Housing Act (Second Calculation Ordinance – II. BV) settled as follows:
The lessor may be charged interest at the rate of 4 percent on the portion of the lessor's own work that does not exceed 15 percent of the total cost of the construction project; interest may be charged on the portion of the lessor's own work that exceeds this rate
(a) an interest rate equal to the market rate for first mortgages, provided that public funds are made available before 1. January 1974 have been approved,
(b) in other cases, an interest rate of 6.5 per cent.
Modernization of publicly subsidized rental housing can lead to an increase in the average rent if the granting authority has approved the inclusion of the costs of modernization, the associated financing funds and current expenses in the profitability calculation (§§ 1 WFNG, 8 a (3) 4 a (1), 11 (5) to (7) II. BV). However, approval for modernization depends on various conditions, u. a. Of the affordability of the increased average rent for the eligible group of people. A rent increase of 11% of the modernization costs incurred per year, as provided for in general tenancy law for privately financed apartments, does not exist in cost-based tenancy law.
The landlord is not obliged to take advantage of a more favorable interest rate after the granting of public funds (freezing principle § 4 paragraph 1 II. BV). However, if he z. B. agreed on more favorable interest rates as part of a debt restructuring, then he is obliged to include the reduced cost of capital in the economic efficiency calculation (§ 1 WFNG, 8 a paragraph 3 4 a paragraph 1, 23 paragraph 1 II. BV). Lowering the interest rate on borrowed funds then leads to lowering the average rent.
On the other hand, an increased interest rate of a borrowed funds may lead to an increase in the average rent if it is based on circumstances for which the landlord is not responsible (§§ 1 WFNG, 8 a paragraph 3 4 a paragraph 1, 21 paragraph 1, 23 paragraph 1 II. BV), z. B. in the case of higher interest rates on public construction loans by NRW.BANK. However, the principal amount cannot exceed that resulting from the interest rate on the borrowed funds at the market rate for first mortgages (currently between 3.15% and 4.27%) at the time of the principal increase, with the result that the landlord must bear the interest burden in excess of the market rate itself. In this respect, a higher interest rate can limit the scope for investment in energy-related measures.
1. What volumes of loans have been made available through the then Wohnungsbauforderungsanstalt des Landes Nordrhein-Westfalen (Wfa) in the individual years since 1965 at the respective interest and repayment rates for the purpose of social rental housing construction (please specify by year)??
The subsidy volume (net commitment capital) of apartments with rent control from 1965 to 1979 that are still in the loan administration of NRW.BANK, currently amounts to three billion euros. Funding was provided either through the approval of construction loans or a combination of construction and expenditure loans.
Both types of loans are subject to a maximum annual interest rate of 6%. Repayment amounts to 1% per annum for construction loans and 2% per annum for expenditure loans. The remaining capital of the loans currently amounts to 1.8 billion euros. The subsidy volumes for the individual years are listed in Annex 1.
2. For which of these loans has interest and/or principal been suspended or forgiven?
In the case of the previously mentioned loans, gradual increases in interest rates have been implemented up to 1999. Since the additional burden from an interest rate increase can be passed on to the cost rent, the interest rate increases were limited in a socially acceptable way by two parameters (capping amount and rent ceilings). Since 2000, interest rate increases have been suspended. This means that interest rates were frozen at the levels reached in 1999. The current average interest rate for each funding vintage can also be found in Exhibit 1. It is also noted that the interest rate on development loans as of 1. January 2010 in the Act on the Promotion and Use of Housing for the State of North Rhine-Westphalia (WFNG NRW) has been newly regulated. On this legal basis, the Managing Board of NRW.BANK decided to raise the interest rate on 1. January 2011 to implement another interest rate step. However, these interest rate increases are only applied up to a cap of 4% p.a. In addition, the scope for interest rate increases is limited by law by a cap of 0.05 euros per square meter of living space per month and rent ceilings differentiated by building age classes and rent levels in a socially acceptable manner. Repayment has not been suspended at any time.
3. For which of these loans have cost rents actually been adjusted to reflect changes in equity and debt interest rates in the meantime?
The requested overview cannot be given, because the requested data are not collected. Rather, landlords of publicly subsidized rental housing are required by law to make their own changes to the economic efficiency calculation and cost rent in accordance with the relevant regulations in the event of a change in the cost of capital. The cost rents are reviewed by the responsible authorities on a random basis as part of the inventory and occupancy control or on the basis of specific complaints from tenants (§ 25 WFNG NRW i. V. m. No. 15 of the housing use regulations).