Overview of the Publication
The report âAnalysen und Empfehlungen zur Vereinbarkeit von bezahlbarem Wohnen und Klimaschutzâ is an online publication (BBSRâOnlineâPublikation 87/2024) issued by the Bundesinstitut fĂźr Bauâ, Stadtâ und Raumforschung (BBSR), the federal research institute for building, urban and regional development in Germany. It was prepared under the âAllgemeine Ressortforschungâ program for the Federal Ministry for Housing, Urban Development and the Building Sector (BMWSB). The authors include Katja Schumacher, Johanna Cludius, Malte Bei der Wieden, Veit BĂźrger, Katja HĂźnecke, Sibylle Braungardt, Viktoria Noka, Victoria Liste and additional experts from the ĂkoâInstitut and the Institute for Ecological Economics (IĂW). The study investigates the conflict between affordable housing and climate protection in the German building sector and proposes policy recommendations.
Key Instruments Analyzed
Three clusters of policy instruments are examined: (1) COââpricing and revenue redistribution, (2) âFordern und FĂśrdernâ (mandatory standards combined with targeted subsidies), and (3) complementary measures such as energyâperformance certificates, heating optimisation, smartâbuilding technologies and a climate component in housing benefits. The COââprice scenarios use 80 âŹ/t COâ (2025 level) and 155 âŹ/t COâ (2030 level). Redistribution options include a flat climate dividend (70 âŹ/person or 100 âŹ/person) and several sociallyâtiered variants that allocate higher payments to lowerâincome deciles.
Economic Impact on Households
Modeling with the WIRPOL, ModâUmlagen and SEEK tools estimates that the COââprice generates annual state revenue of âŹ10.2 bn at 80 âŹ/t and âŹ13.3 bn at 155 âŹ/t. Climateâdividend costs range from âŹ2.6 bn to âŹ6.4 bn depending on the design. For the lowest income decile, the net effect is an entitlement of âŹ70â105 âŹ/person per year, offsetting COââcosts that represent 0.5â0.7 % of disposable income. Higher deciles experience modest burdens (up to 0.6 % of income) or slight net gains with the flat dividend.
Effects on Rental and OwnerâOccupied Housing
The analysis distinguishes between renters, selfâoccupied owners and private landlords. Renters typically bear COââcosts through the staged costâallocation model, sharing them roughly 50 % with landlords. Modernisationârelated rent increases are capped at 8 % of renovation costs, with a monthly ceiling of âŹ3 / m² (or âŹ2 / m² for lowârent apartments). The âthirdâmodelâ proposal suggests a 10 % costâpassâthrough combined with mandatory uptake of subsidies, potentially reducing the rent impact. For owners, COââcosts are fully internalised, but subsidies (e.g., 30 % of heatingâsystem investment via the BEG programme) improve economic viability, especially for heatâpump installations.
EnergyâEfficiency Measures and Savings
The 65 % renewableâenergy requirement for new heating systems (effective from 2024) and minimum energyâperformance standards (MEPS) are projected to generate significant COâ reductions while delivering average heatingâcost savings of 20â30 % for compliant buildings. The study notes that a 65 % renewableâenergy share, coupled with BEG subsidies, yields a positive net present value for most residential retrofit scenarios, provided that fuel prices remain at or above current levels.
Distributional Justice and Social Protection
Socially tiered climate dividends are shown to protect the most vulnerable households more effectively than a universal payment. Variant II (higher payments to the first two deciles, moderate payments to the next four) reduces net burdens for the bottom two deciles to below 0.2 % of income, while keeping fiscal costs manageable. The report recommends that remaining COâârevenue be allocated to climateâsocial funds, energyâefficiency grants for lowâincome owners, and targeted rentâcontrol mechanisms.
Implementation Timeline and Governance
The study emphasizes that the regulatory framework (building code, heatingâplan law, COââcostâallocation law) provides the necessary legal basis for the proposed measures. It calls for coordinated action among federal ministries, state governments, housing associations and private landlords. Monitoring mechanisms should track COââemissions, housingâcost burdens and the uptake of subsidies to adjust policies iteratively.
Concrete Policy Recommendations
- Strengthen the legal basis for COââpricing and ensure transparent, incomeâadjusted redistribution.
- Adopt the 65 % renewableâenergy heating requirement nationwide and link it to BEG subsidies.
- Introduce a âthirdâmodelâ of modernisationâcost allocation that obliges landlords to use subsidies before passing costs to tenants.
- Expand the climate component of housing benefits and target energyâefficiency grants to lowâincome ownerâoccupiers.
- Promote complementary tools (energy certificates, smartâbuilding tech, personalised energy advice) to increase acceptance and effectiveness. Overall, the publication provides a dataâdriven roadmap for aligning affordable housing with Germanyâs climateâneutrality target for 2045, offering insights that are relevant for policymakers, housing providers and sustainability advocates across Europe.

