There is too little construction going on in Germany – but money from the state cannot be the only solution, says the federal government. Bad news for the crisis-ridden construction industry.
The crisis-ridden construction industry cannot count on additional financial aid from the federal government for the time being. Both Construction Minister Klara Geywitz and Finance Minister Christian Lindner made it clear at the Construction Industry Day in Berlin that the budget is simply too small for this. Instead, permits should be issued more quickly and regulations that make construction more expensive should be abolished.
Due to higher loan interest rates and expensive building materials, the industry has been in crisis for two years. Companies are complaining about a lack of new orders and cancellations of projects already planned. In 2022 and 2023, only around 295,000 apartments were completed each year. The traffic light government had actually set itself the goal of building 400,000 apartments per year.
Scholz: “We need to build more and differently”
Chancellor Olaf Scholz therefore sees an urgent need for action. “New construction on a large scale” is necessary, said the SPD politician. “We need to build more and build differently.” He does not want conditions in Germany “where first residents with low incomes and then increasingly women and men with middle incomes are literally pushed out of the cities.”
Construction Minister Klara Geywitz stressed the importance of the construction industry in times of a weak economy: “Germany has a problem with economic growth and if the construction industry does not start growing again, then overall economic growth will not either.” However, the industry should not rely solely on state subsidies. Only specific funding programs for infrastructure and things that do not pay off on their own are possible. “But we actually have to set ourselves the goal of making it possible for private investments in Germany – and they are huge – so that we can build again in a freely financed and profitable manner in the foreseeable future.”
Lindner relies on private investments
Lindner also relies on private investment instead of public funding. The majority of investments in housing construction must be made by private hands, said the FDP leader. Public infrastructure, however, i.e. bridges, railways, roads and digitalization, is the state’s responsibility. Sufficient funds must be made available here. In order to relieve the burden on the construction industry, already high standards for energy efficiency, noise protection or fire protection should not be increased any further. In addition, the state should not tighten tenancy law beyond the rent cap.
Chancellor Scholz also suggested that companies could build more apartments for their employees again. “That has somehow gone a little out of fashion and I hope that things will change a little,” said Scholz. The federal government has just introduced tax advantages with the new non-profit housing system. “Now all that’s needed is for many companies to come up with the idea that this might have something to do with HR (human capital).” On Wednesday, the cabinet made tax advantages possible for socially oriented companies that offer apartments at below-market rents.
Source: Stern
