Munich planning department rejects call for 80% affordable housing in exemptions from development plans

Munich's Department of Urban Planning and Building Regulation has rejected a proposal that 80% of new housing created through exemptions from existing development plans should be set aside as subsidised, affordable homes. The proposal was submitted on 26 August 2026 by city councillors Arif Haidary, Katharina Horn, Stefan Jagel, Liliana Parente and Christian Schwarzenberger of the Left Party group on Munich City Council.

In her reply, the city's head of planning, Professor Dr Elisabeth Merk, said the council could not formally vote on the matter. Applying the Federal Building Code and concluding social commitment agreements are day-to-day business that falls to the Lord Mayor, and under the council's rules of procedure, proposals from volunteer councillors may only concern matters for which the council is responsible.

Until recently, when the city granted an exemption from a development plan, 40% of the additional housing had to be tied to subsidised schemes, including income-based support and the Munich Model rental scheme. Because of ongoing shortfalls in state funding and cuts to the city budget, the council reduced this on 17 December 2025 to a requirement of 20% price-capped rental housing. The Left Party's proposal would have quadrupled the current figure. According to the department, there is currently not enough state or city money to raise the quota again in a binding and legally secure way.

The department said the same applies if the city drew up new development plans with an 80% quota linked to urban development contracts. New plans would create planning costs that the city budget cannot currently absorb, and the city's rules on socially equitable land use, which split costs between the city and developers, do not allow an 80% share of subsidised and social housing, partly because cross-financing for schools and nurseries would be lost.

The department also pointed out that the current economic situation and interest rates are weighing heavily on new construction, and that many projects can barely be financed. While it described the aim as understandable in terms of social policy, it said an 80% quota would bring building to a complete standstill in these mostly inner-city locations, where construction costs are high.

If state and city funding for subsidised housing improves and developers can be given firm commitments of support, the department said it would put forward a proposal to return to higher quotas, provided this is workable overall. It added that the general funding conditions for housing schemes would first need to be adjusted to the current budget situation.