New urban development funding - simpler, more flexible, greener

Almost 1 billion euros in federal funding for urban development and social integration in neighbourhoods in 2020

The federal and state governments have jointly developed a new structure for urban development funding from 2020: A total of €790 million will be available in three (instead of the previous six) concentrated urban development funding programmes. In addition to the funding requirement of climate change/climate adaptation, including urban greening, the possibility of stronger inter-municipal cooperation has also been added.

A further 200 million euros are available in the "Social Integration in the Neighbourhood" investment pact. This will enable the municipalities to press ahead with the expansion and refurbishment of their social infrastructure.

Federal Minister of the Interior Seehofer signed the corresponding administrative agreements today. Federal funding for urban development and social integration will thus be stabilised at a high level.

Federal Minister of the Interior Seehofer: "We are streamlining our funding structure. This will make it easier for cities and municipalities to implement their projects. In addition, climate protection will become a funding requirement. Urban development funding without climate protection will no longer exist in the future."

The following federal-state urban development programs are available for the 2020 funding year:

  • "Living Centres" to promote inner development and historic city centres (300 million euros),
  • "Social cohesion" to promote coexistence in neighbourhoods (EUR 200 million),
  • "Growth and Sustainable Renewal" to adapt to demographic and structural change and to design liveable neighbourhoods (290 million euros),
  • "Investment Pact for Social Integration in the Neighbourhood" (200 million euros).

The administrative agreements will enter into force as soon as all federal states have countersigned.

The urban development funding provided by the federal and state governments triggers considerable follow-up investments. For the year 2020, it is assumed that the total investment volume triggered by the funding will be around 12 billion euros, and the expected gross value added will be around 14 billion euros. The subsidies also support the small and medium-sized local economy to a large extent: approx. 36 percent of the expected construction volume remains in the municipality itself, another approx. 48 percent in the region with a radius of 50 km. The construction industry benefits from this with 71 percent of the implemented investment funds.

Source: PM of the Federal Ministry of the Interior, for building and homeland (BMI) from 19.12.2019

Keywords: DE-News, Funding, Quarters, Settlements, Housing policy