Consideration: Heritable Building Right vs. Property Purchase / Renovation

And I do not accept the calculation that after 35 years you are at a loss. Then you shouldn’t lease cars either.

That’s exactly why people usually don’t lease a car as a private person!

Something fundamental: most of the people here want to get out of renting and into their own property. Because 1. they don’t want to finance the owner’s property but want to build their own assets. And 2. they simply want to have the feeling of living on and in something of their own and accordingly have the power to decide.

In my view, that cannot simply be argued away.

But: if it is virtually unavoidable and the leasehold land is not practically paid off through the lease after 20 years, leasehold is a good option to get what you dream of.

With the disadvantages that exist. But we all have disadvantages. Our purchased plot is also not optimal. But overall, we like it very much. You have to live with that and be able to make arrangements.

The topic of heritable building rights ground lease is currently making the rounds in many municipalities and is basically the attempt by the communities to do at least a little something against the steadily rising and eventually unaffordable land prices; therefore, I would expect that this will increase even more in the future. But if you save the difference between the hypothetically financed purchase price and the ground lease every month, you will end up with a nice sum, which may then be roughly comparable to otherwise acquired ownership of the land. I don’t find that so bad.

The topic of Erbpacht heritable building rights is currently circulating in many municipalities and is basically the attempt by communities to do at least a little something against the steadily rising and eventually unaffordable land prices,

In the "Hofreiter thread" ;-) a Berlin initiative for the reprivatization of housing stocks through expropriation was mentioned today. Yes, municipal housing management cannot completely avoid getting involved in public services, and ultimately it only makes sense when viewed as a whole, that is, without considering rental apartments and building plots separately. Silverware cast onto the market will later backfire on the public sector. And after all, the church has been setting an example for centuries: not to sell anything that can also be leased. However, one must differentiate here: what the municipality already has in its property assets, it will lease more wisely than sell – but what it would still need to acquire itself, it cannot "buy at purchase and lease at sale," because then the business administration faction would again feel confirmed in their prejudice that the economics faction will never understand anything about managing resources. Although public budgets have nowadays been modernized in terms of business budgets through double-entry accounting, in terms of asset budgets they remain genetically cameralistic. Unfortunately, this is a real problem even if little Fritz does not understand it.

The topic of Erbpacht hereditary building rights is currently circulating in many municipalities and is basically the attempt by communities to do at least a little against the steadily rising and eventually unaffordable land prices. In this respect, I would expect it to increase even more in the future. But if one saves the difference between a hypothetically financed purchase price and the leasehold every month, in the end one will have a nice sum together, which may then be roughly comparable to the otherwise acquired ownership of the land. I don't find that so bad now.

Hmm... but the statement only applies if the municipality sets the leasehold rent cheaply. I have already written further above: if the municipality demands such a high leasehold rent that the current value of the land is paid off as rent after 25-30 years, the difference between the hypothetically financed purchase price and the leasehold quickly becomes negative.

Public budgets must follow the principle of economic efficiency. In other words: to extract the greatest possible profit from public property. That is why there are open bidding procedures when selling. Or the highest possible lease income without having to sell the family silver.

This works "excellently" here in the area. The treasurer is happy. The young family without a big wallet less so.

In very rural areas, it usually works differently: here one has to do everything to encourage young families to come back/stay. Which ultimately pays off again for the municipality.

So all the better if in the OP’s case the municipality offers a low leasehold rent, although presumably enough interested parties queue up and would pay higher prices.

Hmm... but the statement only applies if the municipality sets the ground rent at a low rate.

Which statement from the full quote? Even if the municipality charges a high interest rate, it still retains control over the properties, and the fact is that this initially results in a lower monthly burden than with a financing.

Besides: working economically does not mean making the maximum possible profit, and incidentally, the municipality also has a social responsibility, and even in NRW they are increasingly moving away from highest-bid procedures. That just has to be desired accordingly by the city council.

Hmm...the statement only applies if the municipality sets the ground lease interest rate cheaply. I already wrote earlier: if the municipality demands such a high ground lease that after 25-30 years you have paid the current value of the land as rent, the difference between the hypothetically financed purchase price and the ground lease quickly becomes negative.

That's about 3-4% return. Compared to a daily savings account, that is a lot, but otherwise not. A stock investment in standard values expects this order of magnitude in dividends. The rental property with the famous 20 years' rent also falls within this range. Value increases are additionally expected by the investor in both cases. In this specific case, we have 1.5% on 60% of the standard land value. The return for the municipality in this case is below 1%. And first of all, you have to get a plot at the standard land value... in our case, we are about 40% above the SLV even though the municipality, according to municipal council protocols, practically sells the plots at cost price (<5€/sqm buffer).