January 20, 2016 / 1:49 PM / 4 years ago

Germany must double housing spend to address refugee influx, says minister

* Housing budget already doubled last year to 1 bln euros

* Minister says it should be 2 bln euros

* SPD politician’s stance not agreed with finance minister

BERLIN, Jan 20 (Reuters) - Germany’s construction minister said on Wednesday the government needed to double its spending on public housing if it is to address a drastic accommodation shortage aggravated by a record influx of refugees.

More than a million people arrived in Germany last year, most fleeing war and poverty in Syria, Afghanistan and Iraq in Europe’s biggest refugee influx since World War Two.

With many sleeping in makeshift accommodation in local halls, gymnasiums and tents, there are growing concerns about how to house them permanently, as thousands continue to arrive each day.

Construction Minister Barbara Hendricks, a member of the Social Democrats (SPD), the junior partner in Chancellor Angela Merkel’s coalition, said government funding, which was already doubled last year to 1 billion euros annually between 2016 and 2019, must be doubled again to 2 billion euros a year until 2020.

Hendricks’ proposal, which would cost 5 billion euros until 2020, has not been coordinated with Finance Minister Wolfgang Schaeuble, a member of Merkel’s Christian Democrats, a finance ministry spokesman said, adding that internal talks on the federal budget were ongoing.

Even before the refugee numbers started to increase sharply last summer, there was an estimated lack of 800,000 affordable flats.

Nearly 290,000 new flats are due to be built this year, but experts say this is not enough to meet demand from the rising numbers of refugees and a growing urban population which mean that more than 400,000 new flats are needed annually.

Hendricks and Schaeuble have already agreed to introduce tax incentives for private investors who build new apartments in some city areas in the next three years.

The federal states have yet to agree to the plan which would let investors reduce their tax bills by deducting around a third of their costs over three years as long as they build in areas where local authorities say the housing shortage is most acute.

$1 = 0.9176 euros Reporting by Michael Nienaber and Matthias Sobolewski; Editing by Robin Pomeroy

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