The economy, countries and tenants are demanding more speed

The GdW believes that the traffic light coalition’s goal of building 400,000 apartments a year, 100,000 of which are affordable, publicly funded social housing, is correct. This year and next, however, it is “completely illusory”.

A number of factors are preventing the construction of affordable housing in particular, says GdW President Gedaschko: supply chain problems since the corona crisis, total uncertainty with regard to new construction subsidies from 2023, a massive shortage of materials, skyrocketing construction and energy costs, rising interest rates and a collapsing supply of raw materials.

The GdW criticizes the “harmful subsidy chaos” around the repeatedly stopped, only rudimentarily resumed and completely unclear subsidy via the state-owned KfW bank. According to Gedaschko, planning at housing companies imploded. The alliance must “urgently find concrete answers that help solve these problems”.

construction industry

The main association of the German construction industry calls for a clear focus of the alliance on the topic of new construction. “Because we can’t solve the housing shortage in the metropolitan areas either through a pure rent policy or through the renovation of the stock alone,” said the association’s general manager, Tim-Oliver Müller.

Although both topics are important, building in existing stock does not usually create enough new living space. “So if you want to create relief on the rental housing market, you have to build new apartments,” explains Müller. “In addition to a resilient funding framework and the streamlining of regulations, we need a planning and approval booster for this.”

The consequences of the Ukraine war hit “the construction sites in this country with full force”. The lack of various building materials is a big problem. Price increases and delivery bottlenecks are increasingly deterring public and private investors, says Müller.

“We therefore assume that there may be a decline in new residential construction and also in the construction industry as a whole.” Most recently, industry associations had predicted a slump in residential construction in Germany for 2023.

Federal states

The commitment of the public sector is important, says Nicole Razavi (CDU), Minister for Regional Development and Housing in Baden-Württemberg and Chairwoman of the Conference of Building Ministers (BMK). “But we must not forget the many private house builders, without them we will not achieve our goals in housing policy,” she explains. “We have to make people want to build and not scare them off with additional regulations.”

Razavi has harshly criticized the federal government’s two funding stops for the KfW programs. That “did a lot of damage and destroyed trust”. It is now necessary to bridge the funding gap that has arisen until a new funding system is in place. “At the moment I don’t have the impression that everyone in the federal government is pulling in the same direction,” said Razavi.

Ina Scharrenbach (CDU), Minister of Construction in North Rhine-Westphalia, is also clear: When it comes to new construction funding via the KfW Bank, “the traffic light hustle and bustle must be put an end to”. This “subsidy chaos” is massively damaging to housing construction, the affordability of housing and energy efficiency.

“Do more, talk less: I miss the federal government’s will and, above all, the right measures to implement the current plans,” Scharrenbach continues. The main sticking point is the availability of building land and the length of time until it can actually be built on. “Huge numbers of reports and procedures are slowing down the provision of buildable land,” she criticizes. But without affordable building plots, there can be no affordable living space and therefore no affordable rents.

In addition, the federal building regulations, which sometimes cause additional construction costs, should be subjected to a reality check. “During this time, the price drivers in construction have to be sorted out again.”

municipalities

The German Association of Towns and Municipalities (DStGB) insists on a “significant expansion of offers”. In addition to boosting new construction, the existing vacancies, especially in rural areas, should not be forgotten. The alliance must therefore also develop recommendations for densification, conversion and construction, as well as for the conversion of vacancies.

The availability of building land remains a core problem in the creation of affordable housing. According to the DStGB, important impulses could be given here:

• through adjustments in building planning law
• through a further tightened municipal right of first refusal
• through the establishment of municipal land funds, which should be co-financed by the federal and state governments

The councilor for construction and urban development, Bernd Düsterdiek, demands: “In addition, planning and approval processes must be further accelerated and construction costs reduced.” This could be achieved, for example, through more serial construction and fewer standards and norms. The municipalities need financial support in order to increase the staff in the planning and approval authorities.

tenant representative

Before the alliance was launched, the German Tenants’ Association (DMB) referred to the high rents for new buildings on the open market, which the majority of the population could no longer afford: almost half of all new apartments in Berlin in 2020 cost at least 16 euros per square meter cold. “High new contract rents increase the local comparative rent and in turn lead to ever higher existing rents,” explains Federal Director Melanie Weber-Moritz.

She demands: “The focus of new construction funding must be on the creation of affordable social housing with permanent rental price controls and affordable rental apartments.” This also means that rents that are still affordable remain affordable.

The effective limitation of the increase in rents in existing buildings, a sharp rent brake for new rentals and the punishment of rent extortion are necessary. “An alliance for affordable housing must also support these tenancy law measures,” says Weber-Moritz.

Alliance wants to meet again in the fall

In autumn there will be an alliance day at the invitation of Chancellor Olaf Scholz (SPD), where proposals for measures will be presented. According to Minister Geywitz, the final decision on what will then be implemented rests with the Ministry of Construction.

For the SPD, the goal of building 400,000 apartments a year is an important election promise. The real estate economist Michael Voigtländer from the Institute of German Economics (IW) in Cologne considers this number to be too high: “In view of the scarce trade capacities, new construction and renovation are in competition.” He also advocates a greater focus on the renovation of the building stock than before to reduce dependence on Russian gas.

“In view of the Russian war of aggression, the issues have shifted,” says Voigtländer. The alliance will also have to deal with the question of “how to create temporary housing for refugees quickly and unbureaucratically”.

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