...Funding Needs to Increase: A lack of investment in social housing means that Germany is ill- prepared for the sudden increase in demand from the influx of refugees. Investment in real estate will need to increase. About EUR5.2bn was invested by public companies owned by the Bund and the Laender or municipalities in 2014, out of EUR10bn in the real-estate sector as a whole and more investments will be required to comply with the rising demand. This may lead to higher capital-market funding and a greater demand for ratings. Responsibility of the Laender: Social housing has been the responsibility of the Laender since the federal reform of 2006. The Federal Republic (the Bund) is committed to support this with an annual amount of EUR518.2m until 2019. The distribution among the Laender follows a specific formula based on the Laender's VAT (Umsatzsteuerschluessel). These transfers are earmarked for investment purposes and give the Laender some leeway, meaning that the proceeds are not necessarily...
