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DW
2 days ago
- Business
- DW
German housing crisis: government plans construction boost – DW – 07/28/2025
Germany has a desperate shortage of affordable housing. The government now plans to take a "crowbar" to construction law to help get more homes built at "turbo" speed. "Building and housing is the social issue of our time," Germany's new Construction and Housing Minister Verena Hubertz told public broadcaster ARD in May when she announced her plan to help ease the shortage of affordable housing. With the cabinet set to present its 2026 budget proposal on July 30, spending on housing is one of the focal points. In a country where it can take longer to get approval for a development project than it does to actually build it, Hubertz said she wanted to give local authorities a "crowbar" to circumvent labyrinthine urban planning laws. That crowbar, labeled "Bau-Turbo" (construction turbo), is a new paragraph (§ 246e) to be inserted into the German Building Code. If the legislation is passed in the fall, municipalities will be able to approve construction, change-of-use and renovation projects that deviate from the provisions of the Building Code if those projects are for the construction of new residential buildings. Planning applications will also be automatically approved after two months unless vetoed by the municipality. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Building regulations vary between each of Germany's 16 states and among municipalities, resulting in an ever-growing patchwork of rules governing everything from the number of electric sockets per room to the shape and color of roofs. The Construction Ministry estimates its legislative amendment, to be passed by the Bundestag in the fall, will save companies, citizens and local authorities around €2.5 billion ($2.9 billion) annually. Tim-Oliver Müller, the managing director of the Federal Association of the German Construction Industry (HDB), said he welcomed the government's plans but warned that housing construction "would not pick up again overnight." "The law alone will not result in a single new apartment, but it will make it easier for local authorities to approve them," Müller told DW. He said a "melange of crises" has hit Germany's construction industry, largely as a result of Russia's full-scale invasion of Ukraine, rising energy prices, the increased cost of materials such as concrete and steel, inflation and a jump in interest rates from below 1% to between 3% and 4%. Müller is convinced that the new changes to the law would not reduce quality standards — for example, those regarding fire safety and structural integrity, which remain in place. The new legislation is "purely a creation of possibilities, for example, with regard to building extensions or changing the designation of land from commercial to residential, something that was not previously possible," Müller explained. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Environmentalists have expressed concern about easing planning regulations because they fear green spaces will be built on as new development projects are waved through with less time for local residents to object. "Only with green spaces can we buffer [heatwaves]. Because these green spaces provide active cooling," Stefan Petzold from the nature conservation association NABU told ARD. Another person concerned about hot air is Matthias Günther, the head of the Pestel Institute, which researches areas like the economy and housing for the public and private sectors. He described the new legislation as "a lot of hot air" that will "not achieve anything in the short term." "Additional paragraphs and sections will be added to the Building Code, creating more bureaucracy. Some things will require the municipality's consent, and, especially when it comes to building, they often have problems getting a majority because there's always someone who doesn't want it," Günther told DW. He says that Germany really needs an economic stimulus package for housing construction starting in the fall, accompanied by a loan program with interest rates fixed at 2% for the next 20 years. "The city would essentially pass on its more favorable credit conditions. It wouldn't cost that much. Everyone I talk to says that if they could get financing at 2% then they would start building again," economist Matthias Günther believes, adding that a similar scheme had already proven successful in Poland. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The desperate lack of housing is one of the main reasons why rents have been exploding in big German cities, says Bernard Faller from the Federal Association for Housing and Urban Development (VHW). More than half Germany's population lives in rented accommodation, the highest share in the European Union. While Germany has some of the strongest tenant protection laws in the world, Faller said those laws serve to protect existing tenants and work against those who want or need to move, particularly young people and large families. "The problem remains the same: there are too few homes to meet demand," he told DW. The construction turbo plans are a "very exciting experiment," according to Faller. "Until we come up with something better, and I can't think of anything better, the key to easing the overheated housing market, to curbing rising rents, is for more affordable housing to be built," he said. According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), Germany will need approximately 320,000 new homes every year until 2030. The previous federal government, which lost its majority in the February 2025 election, promised to build 400,000 homes annually. But by 2024, that figure was just 251,900, 14.4% down on the previous year. The new coalition of the center-right bloc of Christian Democrats and Christian Social Union (CDU/CSU) and center-left Social Democrats (SPD) is planning to boost the Construction Ministry's budget for 2025 to €7.4 billion in 2025 from €6.7 billion the previous year. This money will be invested in the construction of social housing — subsidized apartments for low-income families, projects for climate-friendly construction, turning commercial areas into residential areas and promoting homeownership for young you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter, Berlin Briefing.
DW
4 days ago
- Business
- DW
Housing crisis: Germany plans 'turbo' construction boost – DW – 07/28/2025
Germany has a desperate shortage of affordable housing. The government now plans to take a "crowbar" to construction law to help get more homes built at "turbo" speed. "Building and housing is the social issue of our time," Germany's new Construction and Housing Minister Verena Hubertz told public broadcaster in May when she announced her plan to help ease the shortage of affordable housing. With the cabinet set to present its budget proposal for 2026 this Wednesday (30.7.2025), spending on housing is one of the focal points. In a country where it can take longer to get approval for a development project than it does to actually build it, Hubertz said she wanted to give local authorities a "crowbar" to get around labyrinthine urban planning laws. That crowbar labeled "Bau-Turbo" (construction turbo) is a new paragraph (§ 246e) to be inserted into the German Building Code. If the legislation is passed in the fall, municipalities will be given the opportunity to approve construction, change of use and renovation projects that deviate from the provisions of the Building Code if those projects serve the construction of new residential buildings. Planning applications will also be automatically approved after two months unless vetoed by the municipality. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Building regulations vary between each of the 16 states and among municipalities, which has resulted in an ever-growing patchwork of rules governing everything from the number of electric sockets per room to the shape and color of roofs. The Construction Ministry estimates its legislative amendment, to be passed by the Bundestag in fall, will save companies, citizens and local authorities around €2.5 billion ($2.9 bn) a year. Tim-Oliver Müller, the managing director of the Federal Association of the German Construction Industry (HDB), said he welcomed the government's plans but warned that housing construction "would not pick up again overnight." "The law alone will not result in a single new apartment, but it will make it easier for local authorities to approve them," Müller told DW. The construction industry has been hit by a "melange of crises," he said, largely as a result of Russia's full-scale invasion of Ukraine, rising energy prices, the increased cost of materials such as concrete and steel, inflation and a jump in interest rates from below 1% to between 3% and 4%. Müller is convinced that the new changes to the law would not lead to a reduction in quality — standard regulations, for example, with regard to fire safety and structural integrity,which remain in place. The new legislation is "purely a creation of possibilities, for example, with regard to building extensions or changing the designation of land from commercial to residential, something that was not previously possible," Müller explained. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Environmentalists have expressed concern about the easing of planning regulations because they fear that green spaces will be built on as new development projects are waved through with less time for local residents to object. "Only with green spaces can we buffer [heatwaves]. Because these green spaces provide active cooling," Stefan Petzold from the nature conservation association NABU told . Another person concerned about hot air is Matthias Günther, the head of the Pestel Institute, which conducts research on areas like the economy and housing for the public and private sectors. He described the new legislation as "a lot of hot air" that will "not achieve anything in the short term." "Additional paragraphs and sections will be added to the Building Code, creating more bureaucracy. Some things will require the consent of the municipality and, especially when it comes to building, they often have problems getting a majority because there's always someone who doesn't want it," Günther told DW. He says that what Germany really needs is an economic stimulus package for housing construction starting in the fall and accompanied by a loan program with interest rates fixed at 2% for the next 20 years. "The city would essentially pass on its more favorable credit conditions. It wouldn't cost that much. Everyone I talk to says that if they could get financing at 2% then they would start building again," economist Matthias Günther believes, adding that a similar scheme had already proven successful in Poland. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The desperate lack of housing is one of the main reasons why rents have been exploding in big German cities, says Bernard Faller from the Federal Association for Housing and Urban Development (VHW). More than half of the population of Germany lives in rented accommodation — the highest share in the European Union. While Germany has some of the strongest tenant protection laws in the world, Faller said those laws serve to protect existing tenants and work against those who want or need to move — particularly young people and large families. "The problem remains the same: there are too few homes to meet demand," he told DW. The construction turbo plans are a "very exciting experiment," according to Faller. "Until we come up with something better, and I can't think of anything better, the key to easing the overheated housing market, to curbing rising rents, is for more affordable housing to be built," he said. Germany will need approximately 320,000 new homes every year until 2030, according to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR). The previous federal government, which lost its majority in the February 2025 election, had promised to build 400,000 homes a year. But by 2024, that figure was just 251,900 — 14.4% down on the previous year. The new coalition of the center-right bloc of Christian Democrats and Christian Social Union (CDU-CSU) and center-left Social Democrats (SPD) is planning to boost the Construction Ministry's budget for 2025 to €7.4 billion in 2025 from €6.7 billion the previous year. This money will be invested in the construction of social housing – subsidized apartments for low-income families, projects for climate-friendly construction, turning commercial into residential areas and the promotion of home ownership for young you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter, Berlin Briefing.
Local Germany
25-06-2025
- Business
- Local Germany
'Bau-Turbo': How Germany wants to solve the housing crisis
Anyone who's lived in Germany, especially in cities like Berlin, Munich and Frankfurt, knows how stressful the housing search can be. With rents (and property prices) shooting up in recent years, finding a place to live has become increasingly difficult. It is particularly hard for newcomers and foreign residents trying to settle in Germany. READ ALSO: Rents soar in Germany's biggest cities despite the rent brake As the demand for housing continues to outpace supply, the crisis is getting worse. Now, the German government, a coalition of the conservative CDU/CSU and the Social Democrats (SPD), has unveiled a new set of proposals aimed at slashing red tape, accelerating construction timelines and getting more homes built faster. The draft law, which is part of the coalition agreement, is being called the 'Bau-Turbo' – or 'construction turbo'. If approved it will mean that local authorities can allow temporary deviations from building planning regulations. The key aim is to streamline approval processes for new developments. Will it help existing renters? The SPD's Verena Hubertz, Minister for Housing, Urban Development and Construction, said the new law could result in cutting planning times for construction projects in Germany by years. "An average of five years becomes two months planning time," she said. "This creates living space where it is needed – because every home counts." The new rules may have implications for local projects such as the Berlin government's controversial proposals to build homes on the former airfield-turned-park Tempelhofer Feld. The plan also extends rules against converting rented flats into owner-occupied homes, especially in busy city areas. "We are extending the protection against conversion and thus strengthening the rights of tenants," Hubertz said. The draft law has been welcomed as "a huge step forward" by the Federal Association of German Housing and Real Estate Companies (GdW). But there are doubts it will bring about a real turnaround in terms of affordable housing. According to Lukas Siebenkotten, President of the German Tenants' Association (DMB), the plans could even have negative effects for tenants who already pay expensive rents and whose flats are located in neighbourhood protection areas. "If the 'construction turbo' suddenly also applies in protected neighbourhoods, a new floor could be built there, including a lift – and the costs could then be passed on to the other tenants." Advertisement He also pointed out: "Nowhere in the 'Bau-Turbo' does it say that it's about affordable housing." Urban researcher Sebastian Schipper from the University of Frankfurt shares his concerns. "It is unclear whether the amount of new space created by the 'Turbo' will be enough to have a noticeable effect," he said. "Moreover, 'Bau-Turbo' or not, it would take years before any possible price effects in new construction become visible, because building takes a long time." Why is Germany doing this? Germany's housing shortage has reached critical levels. The previous government pledged to build 400,000 new apartments per year. But in 2024, only around 250,000 were completed. Construction companies blame the slowdown on rising interest rates as well as the increasing costs of materials and bureaucratic hurdles. Meanwhile, the cost of renting has risen significantly despite rent controls. A recent report from the Ministry of Construction found that asking rents in the 14 largest German cities went up by an average of almost 50 percent since 2015. Advertisement Berlin has been hit hardest, with rents in the capital having more than doubled in the past 10 years. An increasing number of German residents are having to pay more in rental costs. According to the research institute DIW, the proportion of "overburdened households", i.e. those who spend more than 40 percent of their net household income on rent, has tripled since 1990, from five to 14 percent. Experts advise that no more than 30 percent of the household net income should be spent on rent. REVEALED: Where buyers can find the most property for sale in Germany What's next? The agreed measures are expected to be voted on by the German parliament (Bundestag) in autumn this year. If all goes to plan, the new rules could be implemented by early 2026, with a formal review in 2027. But some changes, for instance around digitalisation, could take effect sooner, depending on individual states.
Time of India
18-06-2025
- Business
- Time of India
Germany clears bill to expedite housing construction by cutting red tape
BERLIN : The German government approved on Wednesday a draft law that aims to speed up the construction of housing units, which has tapered amid a wider property market crisis, by cutting red tape that often ensnares projects for years. The number of apartments built in Germany dropped sharply last year, falling 14.4% from 2023 to 251,900 - far below the previous government's goal of 400,000 apartments a year - as Germany's property sector recovers tentatively from its most severe slump in decades, which began in 2022. Residential building permits, an important indicator of construction activity over quarters to come, were up 4.9% in April, the second month of gains in construction planning, according to federal statistics office data on Wednesday. Germany's new government has not set a concrete goal but Chancellor Friedrich Merz named affordable housing as a key social issue, telling the parliament that "building, building, building" is how he plans to make housing more affordable. Under the bill, municipalities in Germany can streamline the approval process for residential buildings by allowing more leeway on development plans, which often take several years to be put together. Construction will now be automatically approved if the municipality does not vote against it within two months, according to the bill. The aim is to build more quickly, increase urban consolidation and more easily add storeys to apartments or homes, said Construction Minister Verena Hubertz . "We obviously don't throw all the rules out the window," she said. "But we do want to tackle them pragmatically and more quickly." Speaking alongside Hubertz at a news conference, Finance Minister Lars Klingbeil said the government also plans large-scale investments in new affordable housing, adding that key figures in draft budgets set to be presented next week would reflect that drive. "With the 500 billion euro special fund, we have also created the necessary conditions for more investment," said Klingbeil.
