Berlin The perspective could hardly be more different. While the construction and housing industry is complaining about the falling number of permits for the construction and conversion of apartments and expects falling completion figures for the next two years, Federal Building Minister Klara Geywitz remains calm. 2023 will be another difficult year, said the SPD politician at the Handelsblatt energy summit in Berlin. “From 2024 I am very optimistic that the completion figures will go up again.”
However, Geywitz left it open when the federal government would achieve its goal of creating 400,000 new apartments a year. It is a “very, very big claim” to increase the number of newly built apartments from 300,000 to 400,000, she said. But the goal remains.
The situation on the German housing market is critical: 293,000 apartments were completed in Germany in 2021. For 2022, the central association of the housing industry GdW expects around 280,000 apartments and only 242,000 for 2023 and only 214,000 in 2024.
The basis for these expectations is a survey conducted by the association among its member companies: According to this, one third of the planned affordable apartments in Germany will not be built this year and next – and that in view of the high level of immigration.
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The housing industry has identified three reasons for this misery: Unreliable and insufficient funding, increased material costs and higher interest rates on financing. In addition, a lack of construction and trade capacities, material bottlenecks and increased energy costs have an impact.
20 percent of modernizations fail
An equally dramatic situation can be seen in the planned modernization projects. According to the association, the GdW companies will not implement around a fifth of the measures. Construction Minister Geywitz does not deny the currently difficult situation for the industry, but makes a different calculation. Between January and November 2022, 321,757 building applications were approved, “in the middle of the crisis,” as she emphasizes.
More is to be built in 2023, even though less and less is being approved. The ministry faces challenges.
(Photo: dpa)
A year earlier, without a crisis, with high subsidies and low interest rates, only 293,000 apartments were completed. “That means that even in the year of the crisis, 30,000 more housing units were approved in eleven months than were built in the previous year,” argues the minister.
Since taking office a good year ago, one number has been important to her: the construction backlog of 850,000 apartments that have now been approved but have not been built. With this figure, Geywitz also counters the demands of the housing industry for further billions in funding for new buildings – beyond the well-known one billion euros. Putting more state money into this busy market would only lead to further price increases, said the minister.
“I am absolutely in favor of doing many things in this crisis that will stabilize the construction industry,” explained Geywitz. Essential for them: the support of the federal government in the amount of 14.5 billion euros for social housing between 2022 and 2026.
In addition, Geywitz again promised to present the key points for the introduction of a “new non-profit housing scheme” soon, including a subsidy for the investment costs. In this way, the Ministry wants to achieve long-term, inexpensive, socially bound living space. One of the basic problems at the moment is that social housing ties expire year after year – and thus there is a minus at the end of the year despite newly created social housing.
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“We are spending a record amount on social housing,” said Geywitz. “And everyone who uses this money must later offer inexpensive apartments.” This focus on social housing does not please all project developers, according to Geywitz. But there must be an end to state funding, which sometimes represents a kind of unconditional basic income in the industry.
The Federal Minister of Building announced that by the end of the year she would like to ensure that building applications could be submitted digitally everywhere in Germany. “We need to become more productive and we need to become more digital,” she said. This will shorten construction times.
A major challenge for the industry is the heat transition. The building sector is one of the major CO2 emitters and regularly exceeds climate targets. More than half of the apartments in Germany are heated with gas, another 23.5 percent with heating oil. However, fossil energies are neither climate-friendly nor cheap since the Russian war of aggression against Ukraine.
Fewer building permits were issued in 2022. The year follows a longer trend.
(Photo: IMAGO/Bernd Leitner)
Geywitz made it clear that the federal government is sticking to its plan that from 2024 every newly installed heating system should be operated on the basis of 65 percent renewable energies if possible. A draft law is currently being drawn up jointly by the green-led Ministry of Economic Affairs and the Ministry of Construction. “If we coordinate this well, we can do it in March,” announced Geywitz. Otherwise, the draft will be presented in the second quarter.
The housing industry demands quick help from politicians
“Germany needs a booster for the expansion of renewable energies,” said GdW President Axel Gedaschko to the Handelsblatt. The energy supply, whether with electricity or district heating, must quickly become CO2-free and not become even more expensive.
In order to make progress with the heat transition, however, another draft law is pending: “Municipal heat planning is fundamental for this,” said Gedaschko. “Otherwise there is a great danger that housing companies will make expensive investments that later turn out to be pointless.”
With municipal heat planning, municipalities should create a framework for the development of local heat sources, such as geothermal energy. In addition, the planning serves to broaden the view: away from the individual house to the district or the entire city. According to Geywitz, the bill is also to be presented in the second quarter of this year.
There are fewer disagreements between the housing industry and the Ministry of Construction when it comes to the question of which technologies the focus should be on in the future. “We are open to all technologies that produce and store electricity and heat in order to make us independent of fossil fuels – and of Russia,” Geywitz made clear. There should not be a concentration on the heat pump with it.
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