In future, around 1,000 social housing units with a 100-year rent control are to be built in Hamburg.
This is intended to protect tenants in publicly funded apartments from excessive rent increases for this unusually long period of time.
In addition, the sale of municipal apartments and residential land in the Hanseatic city is to be fundamentally ruled out in the future.
The red-green city hall coalition agreed on this in almost two years of negotiations with two popular initiatives, as the SPD and Greens parliamentary groups announced on Wednesday.
The agreement should therefore be brought to the citizenship in the next few weeks.
"In return, the popular initiatives have promised to end the referendum process," it said.
The housing industry called the agreement a "dramatic wrong decision" and demanded additional funding.
The two initiatives were launched around two years ago with a total of around 28,400 signatures under the motto "No profits with land and rent".
They wanted to prevent the sale of urban land in Hamburg and stimulate the construction of affordable apartments.
In principle, land owned by the city should only be awarded within the framework of heritable building rights.
They were supported by tenant associations.
"The most important cornerstones of a social and sustainable Hamburg housing policy are now being secured in the long term," said SPD parliamentary group leader Dirk Kienscherf.
"A sell-out of urban areas is ruled out in the long term." In addition, the agreements created "long-term rent control of a duration previously unknown in Germany".
The chairman of the Greens parliamentary group, Dominik Lorenzen, said: "We guarantee a hundred-year social commitment for at least 1000 new apartments per year, in combination with a rental price development linked to inflation and wage levels." Attorney Marc Meyer from tenants help tenants spoke of a great success that "in the future, 1,000 subsidized apartments per year will no longer automatically fall out of all ties after 20 years."
However, housing associations in the north doubted that the compromise reached with the popular initiatives would have the desired effect.
"Instead, it significantly endangers the construction of subsidized and privately financed apartments on the city's land," says a joint response from four associations.
"With 100-year rental price controls at a level below the average of the rent index, financing over the entire period cannot be carried out in a calculable manner without public subsidies." Subsidies in social housing currently run for a period of 30 years.
"From today's perspective, finding a financing institution that will finance the period after these 30 years with low rental income is difficult if not impossible," say the associations.
"It will be difficult to find reputable builders for such concepts." In this context, the housing industry also refers to the significantly increased construction costs and the effort that landlords will have to face with the climate-neutral conversion of the housing stock.
The second building block of the agreement with the popular initiatives is the anchoring of a public welfare-oriented land policy in the Hanseatic city's constitution.
"We are still suffering from the sell-off of urban real estate from the CDU government times," said Finance Senator Andreas Dressel (SPD).
"In this respect, it is a correct and important update of our new social land policy that we put a stop to the sale of urban land together with the popular initiative in the constitution in large parts." It should no longer be as easy as possible to frivolously sell the city's "silverware" property as an object of speculation.
More Hamburg will be preserved for future generations.”