19.–23.01.2022 #immcologne

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In times of scarce living space

Company-owned flats are experiencing a comeback

VW’s company-owned flats

Volkswagen Immobilien was founded in 1953 as a subsidiary company. Today, the number of rental properties is at around 9,300 flats. Photo: Volkswagen Immobilien GmbH

Thorsten W. is coming home from work. He lives in a block of flats in the west of Cologne. The flat is freshly renovated, 62 m2, with two rooms, a kitchen, hallway, bathroom and a balcony that has a view of the countryside. He needed almost ten minutes to get back from the Kölner Stadtwerke, who are both his employer and landlord. He moved to Cologne from Regensburg especially for his job. He was able to avoid the stressful search for a flat as well as getting an estate agent. His employer even dealt with the move itself. And Thorsten W. has received some looks of envy with his basic rent of €450.

Trend with a win-win character

A lot of people are now in the same situation as Thorsten W. According to a survey conducted by the Berlin-based consultants RegioKontext, the trend is going back towards company-owned flats. Employers and employees benefit here in equal measure.

Advantages for employers

  • Especially companies that have to pay according to collective agreements increase their appeal with company-owned flats. Because affordable living space is becoming ever scarcer.
  • Company-owned flats especially make it easier for employees from abroad to get started in a new firm.
  • The employees identify more strongly with the company.

Advantages for employees

  • Company-owned flats are usually close to the workplace. That means a short journey to work and more free time.
  • Living space is currently scarce and expensive. It’s saves an enormous amount of stress when one doesn’t have to look for a flat.
  • From barbecue dinners to helping connect a dishwasher – team spirit can also grow after working hours.

Why company-owned flats went out of fashion

A lot of people are now in the same situation as Thorsten W. According to a survey conducted by the Berlin-based consultants RegioKontext, the trend is going back towards company-owned flats. Employers and employees benefit here in equal measure.

After a boom from the post-war period to the 1970s, the demand for company-owned flats gradually declined in the 1980s. The property market was relaxed and rents moderate. And as a result, housing companies were closed and property was sold. However, the situation has been changing since the mid noughties due to increased urbanisation. Rents have been continuously going up especially in cities since then and whoever is looking for a flat often needs a lot of patience as well as an extensive willingness to compromise. For a number of years now, old stocks of company-owned flats have been being modernised and new residential units built – for example, by the following three companies.

Stadtwerke München’s company-owned flats

Munich city council decided to give preference to those applicants who also offer company-owned flats when allocating commercial space. Photo: Stadtwerke München

Example 1: Stadtwerke München

Munich is the city with the most strained property market in Germany. Affordable living space is an extremely scarce commodity here. However, not only applicants have to battle with the high rental prices, but companies like Stadtwerke München (SWM), too. As an employer that is bound to collective agreements, the municipal works can’t keep up with private enterprise when it comes to salaries. To attract new employees, new ideas have to be thought up – or old ones have to be updated. This is why SWM has set the goal of increasing the number of company-owned flats from the current number of around 1,000 to 3,000 by 2030.

Moreover, SWM wants to take the pressure off the property market in Munich a little with its company-owned flats. As the focus is not on profit, rents are based on the local rental index and are therefore significantly lower than the price of new rental flats in some cases. The allocation of the apartments is governed using a list of points, which takes into account factors such as the social status or the income of the employees. If someone retires, they can still continue living in their company-owned flat.

Example 2: Stadtwerke Köln

Stadtwerke Köln’s company-owned flats

In the course of renovation work on buildings from the 1960s and 1970s, the Bonner/Mertener Strasse residential complex was also successfully modernised. Photo: Stadtwerke Köln

Wohnungsgesellschaft der Stadtwerke Köln (WSK) is also experiencing an increasing number of inquires as a result of the current state of the property market. From 2013, the old stock was was renovated and new builds were added. From well below 50 per cent in the meantime, more than 85 per cent of the flats have now been allocated to the company’s own workforce again. Alongside the advantages that have already been mentioned, there is another according to WSK: around 100 tonnes of CO2 are saved every year as a result of the short journeys to work.

Example 3: Car manufacturer as a landlord

VW’s company-owned flats

VW Immobilien’s choice of flats is aimed at a broad target group: from rooms in a shared flat for trainees and interns to lavish five-room flats in new builds. Photo: Volkswagen Immobilien GmbH

Even in more sedate Wolfsburg, rental prices are increasing dramatically, which prompted VW to revisit the topic of company-owned flats. VW Immobilien GmbH, which was established in the post-war period, owned 10,500 flats for a time but parted ways with some properties in the late 1980s due to vacancies. In the meantime, new housing is being built again, for the higher income bracket in particular. Diverse floor plans and high-quality fittings are supposed to serve as an interim solution for people returning from abroad. Employees with middle or low incomes mainly live in the existing properties.

In Ingolstadt, where the VW subsidiary Audi is based, living space is also scarce. Here, the car manufacturer entered into a cooperation with Gemeinnützigen Wohnungsbaugesellschaft Ingolstadt (GWG), who have converted a former office building into one-room flats under the same name. The small flats are rented out fully furnished and include internet and electricity. Compared to other microapartments, however, the prices are reasonable. The Audi contingent in the GreenHouse is reserved solely for employees in training, work–study programmes and other types of qualification measures; the duration they can live there is linked to the duration of the respective training and further education.

A global model of success

It’s not only in Germany that more and more companies are providing their employees with affordable housing. From Asia to America, there are good examples of where this has been implemented in a modern way all over the world. In Japan, the construction of company-owned flats has already entered their language and is called shataku. A culture of social provision developed there after the Second World War, resulting in 78 per cent of companies with more than 3,000 employees offering company housing today.

Draft of Facebook’s Willow Campus

With the Willow Campus, Facebook is planning its own little city – not just with flats, but with shops, offices, a public area and transport connections, too. Photo: OMA

Even in Silicon Valley, the world’s core for the IT industry, companies have to come up with something because the area is one of the most expensive in the world. In the last ten years alone, rents there have risen by an estimated 50 per cent. This is currently a disaster for companies such as Facebook and Google because living space is slowly becoming too expensive even for the well-paid employees and the high prices frighten away potential new staff.

This is why Facebook is planning for the Willow Campus to be its own neighbourhood in direct proximity to the company premises. Apart from 1,500 flats, there are also supposed to be public spaces, shops and offices here. 15 per cent of the residential units should be offered below market value. And Google is also planning to build 300 flats – in a cost-effective, modular design – to satisfy the high demand.

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