Solidarity Transfer

Solidarity Transfer: A permanent construction site

The principles of the solidarity transfer are clear and simple: existing house projects pay into a common pot, the Solidarity Fund, from which new house projects are supported during and beyond the start-up phase. Its implementation, however, is complex, especially since tax issues have to be taken into consideration. This is why the solidarity transfer is a permanent construction site in terms of organization, with several elements existing side by side.

Solidarity contribution

Between 1992 and 2002, the tenants of the older Syndikat projects were paying 25 cents per square meter of floor space/month into the Solidarity Fund. Since then, the form of the contribution has been modified: each project that has successfully purchased its house starts with a contribution of 10 cents per square meter of floor space/month, which increases annually by 0.5% of the previous year’s base rent (exclusive of utilities). If the base rent exceeds 80% of the average rental fee in the immediate area, the increase of the solidarity contribution can be suspended. The Solidarity Fund is a special fund that is administered by the Mietshäuser Syndikat. In previous years, it has been used to finance the Syndikat’s initial contributions in new house LLCs as well as the costs of infrastructure and joint public relations work. Moreover, it has sometimes been possible to make loans to close short-term funding gaps.

Further forms of Solidarity Transfer

Besides the solidarity contribution, there are a number of other forms of solidarity transfer between house projects: for example, an established, older project may increase its credit volume or offer a “lending and endowment agreement” in order to bridge funding shortfalls that occasionally occur when a new project purchases a house.
Older projects sometimes also assume individual tasks, for example, the receipt and management of direct loans or, better yet, even entire project partnerships. The transfer of know-how from old to new projects is invaluable and fundamental. The Solidarity Transfer adds an important new aspect to this concept.