How does Germany find living space again? The construction and real estate industry discussed with Chancellor Scholz at a crisis meeting. The government has a plan that some people wouldn’t have believed it had.
The federal government wants to stop the ongoing crisis in housing construction with an economic stimulus program for home builders and the real estate industry. Lower environmental standards, tax advantages, less bureaucracy and a higher climate bonus should ensure that more is built in Germany again. The construction and real estate industry is positively surprised: the package can actually make a difference, she says. Environmental and social associations, however, were disappointed on Monday.
Why is Germany not making progress in housing construction?
There has been a lack of living space in this country for years, especially in metropolitan areas. Prices shot up due to low supply in both the rental and purchase markets. The traffic light government has therefore set itself the goal of creating 400,000 new apartments per year. But she has missed this goal for years.
Meanwhile, even planned projects are being canceled, families are giving up their dream of owning a house because of high costs, and companies are going bankrupt. The main problem is the building interest rates, which have risen sharply since the start of the Ukraine war. Where less than one percent was required two years ago, today it is four. Added to this are high inflation and high material costs. Fewer and fewer private individuals can afford their own property – even though purchase prices have recently fallen more sharply than at any time since 2000.
How is the federal government trying to counteract this?
She brought together politicians, local associations, the housing and construction industry, trade unions, churches, environmental, consumer protection and social associations. On Monday they met for the second time in the Chancellery. However, two associations boycotted the crisis summit out of disappointment with the crisis measures taken so far.
What kind of crisis measures are these?
The federal government, especially Construction Minister Klara Geywitz (SPD) and Economics Minister Robert Habeck (Greens), who is responsible for renovations, are trying to counteract this with funding programs for builders and tax advantages for companies. Before the crisis meeting, they presented a new package of measures with 14 points.
Companies should be able to refinance their investments more quickly through new depreciation options. The climate bonus for replacing old, fossil heating systems should be increased and also extended to housing companies.
Chancellor Olaf Scholz (SPD) sees a key instrument in serial construction: a house that has its basic structure approved in one district should also be allowed to be built in the same way elsewhere without major procedures.
What about funding for private builders?
The federal government is planning to reform the subsidies for new construction for families with little income. There were only 104 applications here in the first two months. The construction industry particularly criticizes the income limit of 60,000 euros. Now this limit is to be raised to 90,000 euros. The loan amount is also increased.
There will also be a new program for the purchase and renovation of an older house. However, details are not yet known.
What role does climate protection play?
A crucial one, because the building sector is one of the biggest problem children here – because of fossil fuel heating, poor insulation and old windows. Government funding is therefore usually linked to building or renovating your house in a climate-friendly way. But that makes the projects expensive. The federal government is now moving away from tightening energy standards for new buildings. She wants to forego the so-called EH40 standard for the time being. This is possible because more climate-friendly heating systems will soon be installed in many places, says Economics Minister Robert Habeck (Greens).
Is the 14-point program the required “oomph” for housing construction?
In any case, the construction and real estate industry is positively surprised: they did not expect the federal government to offer such a surcharge, associations revealed on Monday. “We assume that we can at least halt the decline,” explained the construction industry association and the Central Real Estate Committee. What is missing is a concrete interest rate reduction program – and a commitment from the states to actually get involved in serial construction, for example. “Today we have only achieved that the federal government is halfway doing its schoolwork. States and municipalities still have to take action,” they emphasized.
The German Federation of Trade Unions, however, criticized the lack of improvements in terms of tenant protection and social housing. “The catastrophic situation for many tenants will not improve.” Environmental associations fear that abandoning tougher environmental standards will torpedo climate protection.
Source: Stern
