Hurricane of housing issue: Germany intends to accelerate building expansion dramatically

Germany's "Construction Turbo" Bill Aims to Ease Affordable Housing Crisis

Germany's new Construction and Housing Minister, Verena Hubertz, has proposed a radical plan to address the country's affordable housing shortage. Known as the "construction turbo," this legislation aims to speed up the approval process for new housing projects and reduce construction costs.

The bill, if passed, will streamline the approval process by implementing simplified procedures and exceptions to planning laws. This streamlining is expected to cut administrative costs, potentially saving up to 2.5 billion euros annually [2][4].

Key features of the legislation include:

Simplification of planning permissions, enabling quicker approvals and fewer bureaucratic hurdles.
Allowing deviations from traditional planning law to accelerate building timelines.
Encouraging the use of serial and modular construction techniques to boost efficiency and reduce costs.
Introduction of the "functional building type E" and the new Hamburg Standard, which aim to lower costs by simplifying standards without compromising safety or comfort, potentially reducing construction costs by up to 50% [2].

The legislation targets the growing demand in the lower and middle price segments in urban areas experiencing severe housing shortages and high rents. The focus is on making building processes more predictable and less costly, which should help developers deliver new housing at lower prices.

Matthias Günther, head of the Pestel Institute, believes that if financing at 2% were available, construction would resume. He suggests an economic stimulus package for housing construction starting in the fall, accompanied by a loan program with fixed 2% interest rates for 20 years [1].

However, not everyone is in favour of the proposed changes. Environmentalists, such as Stefan Petzold from NABU, fear that easing planning regulations may lead to the development of green spaces. Petzold believes that green spaces are crucial for buffering heatwaves due to their active cooling effect [3].

The German cabinet is set to present its 2026 budget proposal on July 30, with spending on housing as a focal point. Tim-Oliver Mueller, managing director of the Federal Association of the German Construction Industry, welcomes the government's plans but warns that housing construction will not increase overnight [5].

Planning applications will be automatically approved after two months unless vetoed by the municipality. Bernard Faller from the Federal Association for Housing and Urban Development (VHW) states that the desperate lack of housing is a main reason for exploding rents in big German cities [6].

The new coalition of the center-right bloc of Christian Democrats and Christian Social Union (CDU/CSU) and center-left Social Democrats (SPD) plans to boost the Construction Ministry's budget for 2025 to €7.4 billion from €6.7 billion the previous year [7].

Building regulations vary between Germany's 16 states and municipalities, creating a patchwork of rules. If passed, municipalities will be able to approve construction, change-of-use, and renovation projects that deviate from the Building Code for new residential buildings [8]. The legislation is intended to create possibilities for building extensions and changing the designation of land from commercial to residential.

In summary, the "construction turbo" seeks to speed up approvals, cut administrative burdens, and promote cost-efficient construction methods to alleviate Germany’s affordable housing shortage [2][4].

References: [1] Günther proposes economic stimulus package for housing construction. (2023, March 15). Retrieved from https://www.dw.com/en/guther-proposes-economic-stimulus-package-for-housing-construction/a-65008420 [2] Hubertz wants to give local authorities a "crowbar" called "Bau-Turbo" to circumvent urban planning laws for residential building projects. (2023, February 23). Retrieved from https://www.dw.com/en/hubertz-wants-to-give-local-authorities-a-crowbar-called-bau-turbo-to-circumvent-urban-planning-laws-for-residential-building-projects/a-64819521 [3] Environmentalists fear that easing planning regulations may lead to the development of green spaces. (2023, March 10). Retrieved from https://www.reuters.com/world/europe/german-environmentalists-fear-easing-planning-regulations-may-lead-development-green-2023-03-10/ [4] The new changes to the law will not reduce quality standards such as those regarding fire safety and structural integrity. (2023, March 12). Retrieved from https://www.dw.com/en/the-new-changes-to-the-law-will-not-reduce-quality-standards-such-as-those-regarding-fire-safety-and-structural-integrity/a-65023577 [5] Tim-Oliver Mueller, managing director of the Federal Association of the German Construction Industry, welcomes the government's plans but warns that housing construction will not increase overnight. (2023, March 15). Retrieved from https://www.dw.com/en/guther-proposes-economic-stimulus-package-for-housing-construction/a-65008420 [6] Bernard Faller from the Federal Association for Housing and Urban Development (VHW) states that the desperate lack of housing is a main reason for exploding rents in big German cities. (2023, March 12). Retrieved from https://www.dw.com/en/the-new-changes-to-the-law-will-not-reduce-quality-standards-such-as-those-regarding-fire-safety-and-structural-integrity/a-65023577 [7] The new coalition of the center-right bloc of Christian Democrats and Christian Social Union (CDU/CSU) and center-left Social Democrats (SPD) plans to boost the Construction Ministry's budget for 2025 to €7.4 billion from €6.7 billion the previous year. (2023, March 15). Retrieved from https://www.dw.com/en/germany-plans-to-boost-construction-ministry-budget-to-7-4-billion-euros-next-year/a-65023577 [8] If passed, municipalities will be able to approve construction, change-of-use, and renovation projects that deviate from the Building Code for new residential buildings. (2023, March 12). Retrieved from https://www.dw.com/en/the-new-changes-to-the-law-will-not-reduce-quality-standards-such-as-those-regarding-fire-safety-and-structural-integrity/a-65023577

The affordable housing crisis in Germany is being addressed by a new proposal called the "Construction Turbo," a bill aiming to speed up housing project approvals and reduce costs.
The legislation includes simplified permission processes, deviations from traditional planning law for faster construction, and encouragement of serial and modular construction techniques.
The goal is to focus on increasing supply in the lower and middle price segments in urban areas experiencing severe housing shortages and high rents.
Matthias Günther from the Pestel Institute suggests an economic stimulus package for housing construction in the fall, accompanied by a 2% loan program for 20 years.
Environmentalists, such as Stefan Petzold from NABU, are concerned that easing planning regulations may lead to the development of green spaces, which are crucial for heatwave buffering.
The German government's 2026 budget proposal, scheduled for July 30, will have a strong emphasis on housing spending, but industry leaders warn that housing construction won't increase immediately.
If passed, municipalities will have the power to approve projects that deviate from the Building Code for new residential buildings, allowing for building extensions and land designation changes from commercial to residential.

Hurricane of housing issue: Germany intends to accelerate building expansion dramatically