Short History of the German Thrift and Home-Ownership Movement

The German thrift and home-ownership system came into being in the wake of World War I as a self-help movement designed to assist in overcoming a twofold distress situation: a dire need of housing and a dearth of house-building funds. Owing to the complete interruption of house-building and house-preservation works during the war and the immediate post-war period, and further owing to the influx of people from the ceded territories, the uncovered demand for housing in Germany had accumulated to an estimated 800000 units by the end of 19231. Commercial private-sector house-building was unable to meet this demand because the interest rates on the required mortgage loans, once war and inflation had made havoc of the capital market, were so high that the resultant rents would have been well out of the financial reach of broad strata of the population.