(Bloomberg) -- Berlin won a 240 million-euro ($267 million) loan from the European Investment Bank that will help fund the construction of more affordable housing in one of Europe's hottest markets.
City-owned housing company Gewobag will use the money to build 2,000 apartments by 2023, according to a statement Tuesday. The loan is a boon to Katrin Lompscher, Berlin's head of urban development and housing, who is trying to lift the burden on tenants by freezing rents for five years and imposing upper limits tied to the age of properties.
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“Our loan to Gewobag brings more financially accessible and greener homes to many people in Berlin,” said Ambroise Fayolle, EIB vice-president responsible for Germany.
A property boom that doubled rents over the past decade prompted the attempt by Lompscher and Berlin's left-leaning government to keep a lid on housing costs. Critics have said that the only way to address growing demand for affordable housing is to build more homes.
Lompscher hopes that the city can increase the amount of apartments that are built each year to around 20,000, partly through companies her department controls. Gewobag owns around 70,000 homes and, according to Tuesday's statement, will add around 15,000 properties to its portfolio in the medium term.
To contact the reporter on this story: Andrew Blackman in Berlin at ablackman@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Iain Rogers
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