“The money is far from over”

Klara Geywitz

The Federal Minister of Construction calls for a supplement for the new building subsidy.

(Photo: dpa)

Berlin Federal Building Minister Klara Geywitz (SPD) has applied to Federal Finance Minister Christian Lindner (FDP) for more money for new construction funding. The minister explained on Wednesday that there were good talks about contributing “reinforcement agents”.

According to her, the funding program for climate-friendly new construction, which has only been running since the beginning of March, has been “very well” accepted. So far, the construction of 18,500 residential units has been funded.

She could add reassuringly: “The money is far from over.” There is still a larger three-digit million amount, said the minister. A total of 750 million euros is available this year for low-interest loans as part of the climate-friendly new building program.

If the current outflow of funds is extrapolated for the year, then an increase “makes sense”, according to Geywitz.

The capacities of the construction industry are currently still fully utilized, but the number of orders has fallen significantly, said the SPD politician. She does not have any worries that further subsidies will lead to an increase in prices.

A stop in production should be avoided

Since March 1st, the state development bank KfW has been accepting applications for the “Climate-Friendly New Construction” funding program. Low-interest loans are used to promote new construction and the first-time purchase of residential buildings and condominiums in Germany that meet the energy standard of an efficiency house 40 (EH40). EH40 means that a building only uses 40 percent of the energy that a legally defined standard house requires.

>> Read here: New new building subsidy program starts today

Anyone who also meets the stricter quality requirements for sustainable buildings can apply for a higher loan, up to a maximum of 150,000 euros. A total of 750 million euros are available in the form of low-interest loans. There are no more grants.

Bernhard Daldrup, spokesman for housing policy for the SPD parliamentary group, said that this approach was the right way to go because of the rapid rise in building interest rates. The coalition has agreed to make sufficient funds available and to avoid a quick stop to funding, Daldrup said. “In view of the situation on the housing market and the busy sectors in the construction sector, a situation like last year, in which the subsidies were quickly sold out, must not be repeated.”

Last year, Economics Minister Robert Habeck (Greens) had to stop state support twice because the funds ran out. After that, the conditions were tightened. Since the beginning of the year, Minister of Construction Geywitz has also been responsible for the promotion of new construction – Habeck for the building stock.

Federal Ministry of Finance: “Budget Flexibility”

A spokesman for the finance ministry told the dpa news agency that finance minister Lindner was also concerned about new building subsidies. In the current year’s budget there is also “certain flexibility”.

The main association of the German construction industry had warned on Tuesday that the fund for new construction, which had just started, was almost empty after almost a month. Managing Director Tim-Oliver Müller therefore called for more funds for new construction funding. “Nationwide, especially in the big cities, there is a lack of affordable housing for families, couples, singles, senior citizens – for the middle of society.”

Müller saw it as a good sign “that despite the difficult conditions in housing construction, investments are still being made – albeit minimally – and that the support program is being used”.

>> Read here: With so much money, the state helps to build your property

Felix Pakleppa, General Manager of the Central Association of the German Construction Industry, also called for more funds: “In view of the sharp decline in building permits in residential construction, the already demanding subsidy programs for new buildings must at least be financially backed in such a way that everyone who wants to build receives a subsidy.” Fewer regulations, a turbo for acceleration of the planning and approval procedures as well as adequate funding are the order of the day.

The federal government will pay a total of 1.1 billion euros from the climate and transformation fund for new construction funding this year. In addition to the 750 million euros for the program launched in March, 350 million euros are earmarked for “promoting home ownership for families with low and middle incomes”, according to the Ministry of Construction. A corresponding program is scheduled to start in June.

More: Why building in Germany is becoming increasingly difficult

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