Faster Apartment Construction by 2030: Cabinet Green-Lights "Building Boost"
Government approves "Build-Turbo" project
Get ready to see buildings pop up faster, thanks to the federal government's latest initiative, dubbed the "Building Boost." The cabinet has given the nod to this plan, hatched by Minister of Building Verena Hubertz. The proposal includes reforms to the Building Code, allowing municipalities to speed up approval processes, enabling quicker construction, densification, or heightening, temporarily until 2030's end.
The construction industry has been crying out for simpler procedures, and the federal government has finally picked up their baton. However, the housing industry is uncertain if these changes will be enough to halt the current slump.
Streamlining the Approval Process
Municipal approval processes often take years. But with the new Building Boost, constructions will be automatically permitted if the municipality doesn't reject them within two months. The ministry estimates that this will lead to a financial relief of around 2.5 billion euros for administration, companies, and citizens each year.
The government draft bill, which will be presented to the Bundestag in the fall, also extends the protection of rental apartments until 2030. This move aims to prevent mass conversions of rental apartments into owner-occupied apartments, particularly in tense housing areas. The tenants association praised this move but criticized the exclusion of a municipal right of first refusal in so-called tenant protection areas.
A Stepping Stone, Not a Magic Bullet
Industry leaders have welcomed the draft bill but expressed concerns about its practical implementation. "While the proposed regulations are a helpful building block towards faster apartment construction, it's vital they work in practice and are applied consistently," said Axel Gedaschko, the president of the industry association GdW. For a turnaround, more courage to simplify is needed. "Latest building permit figures show the urgently needed restart is still on hold. In the case of multi-family houses, construction is stagnant at the rock bottom with a -0.1% growth rate."
Enrichment Data:
- The German government's Building Boost initiative is a part of a broader housing policy to slash financing costs and cut bureaucratic hurdles for building apartments while keeping construction costs under €15 per square meter in tight housing markets.
- The government plans to unify and simplify funding programs into two main programs, focusing on new construction and the modernization of existing buildings, incentivizing simple, eco-friendly, and cost-efficient construction methods.
- The reinstatement of the EH-55 building standard requires buildings to consume only 55% of the energy of conventional new buildings, supporting eco-friendly housing projects while aligning with the government’s climate goals.
- An investment fund for housing, backed by government-supported public guarantees, is designed to reduce financing costs and promote more investment in apartment construction.
- The Ministry of Economic Affairs and the Ministry of Labour, Employment, and Social Affairs are expected to collaborate on the investment fund, aiming to lower financing costs and boost investments in the real-estate industry, as part of the broader housing policy.
- As the construction industry transitions towards faster apartment construction, Ministers of Economic Affairs and Labour, Employment, and Social Affairs are advocating for ways to further invest in the industry, such as promoting eco-friendly construction methods under the EH-55 building standard.
- To ensure a successful implementation of the Building Boost initiative and the broader housing policy, industry leaders have urged for the simultaneous investment in industries linked to the construction industry, such as finance and employment, for sustainable economic growth.
