Urban Renewal in Saxony: A Need for a more Problem-orientated Allocation of Subsidies!
in: Wirtschaft im Wandel,
Currently, the political discussion of urban renewal in East Germany focuses more and more on new strategies to solve the problems of urban decline and vacancies on the housing market. Since 2001, the demolition of housing has been subsidized with approximately one billion Euros. Critics of this strategy argue that the continuation of demolition leads to a fragmentation of cities and a loss of urban functions. Therefore, they suggest to focus more on revitalization of residential quarters and to allocate more subsidies to improve neighbourhoods as well as residential amenities to lower housing vacancies.
This article argues that on the one hand, the overall housing vacancy-rates cannot be lowered with the current instruments of urban revitalization. Even though, there is a chance to attract citizens from the periphery of cities. This means to redistribute housing vacancies instead of an overall reduction. On the other hand, this strategy needs to be clearly focused on selected cities in which a potential of immigration exists. However, empirical results from Saxony suggest a different picture: The allocation of subsidies for urban revitalization shows no identifiable pattern. Therefore, the author proposes to refocus the policy of urban redevelopment.