Room for Development: Housing and Participation in an Immigration Society

Annual Report 2026

The SVR Annual Report Summary 2026 can be downloaded here.
The press release can be downloaded here.
The seven core messages of the SVR Annual Report can be downloaded here.

For years, housing has been a central issue in social and political debates. But on the housing market in many German cities, demand is growing while supply stagnates. For those who are new to the housing market, either because they are immigrating to, or because they want to move within Germany, accessing affordable housing is a challenge. This is particularly true for low-income individuals and families, and people with a migration background fall disproportionately often into these categories.

In its seventeenth annual report, the SVR investigates the interdependencies between housing and migration. The report reveals the different housing conditions and settlement patterns among people with and without a migration background respectively, and analyses structural contexts and causes of disparity. The annual report also looks at how different population groups live together in neighbourhoods and shows how housing affects integration and participation, especially access to the labour market and education. It sheds a light on the importance of the local infrastructure for how children and young people grow up, especially if they have a migration background – meaning, for example, their access to nurseries and schools, but also to leisure activities, health services and efficient public transport. Finally, based on its findings, the report offers a number of possible integration, migration and housing policy recommendations.

Immigrants and their descendants are not evenly distributed across Germany

The distribution of people with a migration background – that is, of immigrants and their descendants – is uneven across Germany.  As a proportion of the population as a whole, the figure is highest in the city-states (Hamburg, Bremen, Berlin) and the (former) industrial centres of western Germany, and lowest in the eastern federal states. Differences in regional distribution are linked to the reason for migration, the period of first entry to Germany and the relevant legal framework conditions.

People with a migration background are more likely to rent their homes and less likely to be home owners compared to people without a migration background, although there is a trend towards parity with increasing length of stay and among the second generation.

The neighbourhood is a place of participation and social interaction

The neighbourhood is where people live, and it is also a place of social interaction. This is where residents access the social infrastructure, and this is where contacts and interactions between different groups happen. But the neighbourhood is only one of many factors which influence the integration and participation of migrants and how people live together in an immigration society (see figure).

Immigration transforms the social environment, and thus, the neighbourhood. In terms of where residents come from, neighbourhoods are becoming more diverse. Some neighbourhoods are home to an above-average number of (new) migrants. In contrast to what is often assumed, such districts do not in themselves hinder integration. Places of arrival are very important for newly immigrated people in particular, offering resources that can facilitate their integration. But this does not mean that neighbourhoods characterised by immigration automatically create opportunities for integration

Neighbourhoods where poverty and immigration coexist can become problematic. In certain neighbourhoods, this entanglement of poverty and immigration can significantly impact residents’ chances of participation. It can also make social coexistence more difficult, and in the worst-case scenario, trigger a downward spiral. These neighbourhoods can and must be actively managed. They must be prioritised in social and integration policy interventions, and in urban development.

Social segregation is growing: rich and poor live among themselves

If the urban population is unevenly distributed in terms of specific societal markers, this is described as segregation. Ethnic segregation – meaning the spatial concentration of immigrants and their descendants – is low in Germany in international comparison, and is decreasing overall. Hardly any urban districts in Germany are dominated by a single nationality. In major cities, it is more typical to find many migrants from a variety of different countries living in the same neighbourhood.

But at the same time, social segregation – the spatial concentration of individuals based on income groups – has increased. This means that rich and poor tend to live among themselves. This is in part linked to increased immigration into poorer neighbourhoods or municipalities. New immigrants tend to be in a worse economic position shortly after their arrival.

Lack of affordable housing is a barrier for international skilled workers

The lack of affordable housing can make it difficult to recruit and retain international (skilled) workers from abroad, which Germany needs as a result of demographic changes. A need for support in finding housing has been identified by international skilled workers as an urgent priority. In addition, half of all skilled workers report that they have experienced discrimination on the housing market.

This means that for companies who want to recruit and retain skilled workers from abroad, the availability of affordable, attractive housing locally is key if they wish to remain competitive employers. But at the same time, immigrating skilled workers can put additional pressure on the housing market, meaning that prices increase while the supply of affordable dwellings decreases. Employers can help here, too. For example, they can collaborate with housing developers or work with housing associations in order to create homes for employees.

The housing of refugees is subject to special legal requirements

The housing situation of refugees differs from that of other migrant groups. Where and how they are accommodated is regulated by law during the asylum process. That means that initially, they have no say in where and how they live. The law stipulates different types of accommodation depending on what stage they have reached in their claim. Unless an exemption applies, refugees cannot choose their place of residence even after their claim has been granted.

• They are allocated to the federal states according to the “Königstein formula” (Königsteiner Schlüssel), which is based on tax revenues and population size. Once assigned to a federal state, they are housed in state reception centres. Subsequently, they are assigned to a specific local authority which from then on is responsible for providing them with accommodation. Distribution within the federal states is generally also based on a quota system.
• While their claim is being processed, refugees are generally housed in collective accommodation by the municipalities.
• If their claim is recognised, refugees are then bound by the “positive residence rule” meaning that they are bound to a federal state (and/or a specific town or district) for up to three years.