Die Förderung von Wohneigentum

In this work, U. Scholten analyzes the German system of subsidies for owner-occupied housing. He shows that the German system is not effective in helping those households who wish to purchase owner-occupied housing, and that the present bonus granted by the German government is an inferior instrument for reducing the cost of owner-occupied housing to a level that is comparable to the cost of rental housing. The same applies to the subsidization of savings in building and loan associations, since the German building and loan system yields a rate of return which usually falls short of the interest rate on the capital market. The author suggests a system of partial deductibility of interest payments to replace the German system of subsidies. This would solve the problems of those potential owners who do not have sufficient capital of their own or the liquidity to pay interest and amortization rates. In addition, he also proposes that the government grant credit guarantees for owner-occupied housing to replace the building and loan associations.