German housing subsidies fuel rent increases, cuts loom

Germany's state spends 28 billion euros annually on housing subsidies, including Wohngeld and accommodation costs, which paradoxically drive up rents. These subsidies, known as subject funding, support 1.2 million households with Wohngeld and 2.8 million households through accommodation costs covered by federal and state governments. The Merz government is now cutting these aids. Critics argue the system is the most important yet dumbest instrument of German housing policy, as it prevents homelessness but inflates rents. The article questions what a more sensible alternative would be.