Housing construction day: More money, more apartments?

The goal set by the traffic light coalition for housing construction will also be missed in 2023. The construction industry complains about a lack of funding. The minister sees it differently.

“Dark omens”, “Building permits are crashing”, “Dramatic situation”, “Subsidy chaos”: The headlines of the past few days suggest dark times for house construction in Germany. Of the 400,000 new apartments per year that the traffic light coalition has set itself as a target, only just under 280,000 will be completed in 2023, predicts Axel Gedaschko.

The President of the Federal Association of German Housing and Real Estate Companies (GdW) sees the long approval procedures, shortage of skilled workers and the enormously increased building material prices as the most important reasons: “We have increases of 60 to 70 percent in many areas.” The rise in interest rates, combined with a subsidy fiasco, meant that companies were only able to finish building apartments that could be rented for between €15 and €20 net per square meter.

But hardly any tenant can afford that – which is why a number of projects have been put on hold for the time being. The feared “Gau on the construction site” is likely to dominate the discussions at today’s housing construction day.

The minister is optimistic

Federal Building Minister Klara Geywitz does not see the situation as bleak. The delivery bottlenecks in the past year have largely been eliminated, craftsmen are more available again and government interest rate reduction programs are helping to counteract higher financing costs, emphasizes Geywitz. The SPD politician believes that the gap can still be made up. 800,000 residential units have been approved, but are not finished. And it’s not just because of the expensive money.

“We have to produce more with the same number of people on the construction sites, otherwise we simply won’t be able to clear this construction backlog,” says Geywitz. Even in 2021 with the lowest interest rates, under 300,000 apartments were still completed. “That means we not only have to promote, we also have to standardize: serial pre-production, digitization – to then come up with the numbers we need.”

Like Geywitz, the liberal coalition partner also relies on standardized construction and accelerated approval processes. The federal states should standardize their procedures, demands FDP faction leader Christian Dürr. He also hopes for the initiative of private builders, who need to be made easier to invest in new construction projects.

Construction industry calls for further funding programs

The traffic light politicians are remarkably cautious in view of the demands from the construction industry to fill up the subsidy pots. Construction Minister Geywitz considers the billion-euro programs that have already been decided to be sufficient.

And Dürr is also committed: “Against the background of the federal budget, which will be tight enough for all the important things that we do in education and in defense, I am very much against putting new money in the shop window.” What is there should be easier to access. “And on the other hand, we have to follow the regulations ourselves so that construction doesn’t become more expensive.”

The construction and housing industry, construction union and tenants’ association – all organizers of the housing construction day – will not like to hear that. They fear that fewer than 200,000 apartments will be completed in the coming year if politicians do nothing to curb further price increases in construction. “The housing market is dead!” it says in their invitation to the event. For people who urgently need an apartment, a catastrophe threatens.