Slashing Housing Construction Costs: Verena Hubertz's Audacious Plan
Hubertz advocates for substantial decreases in residential housing expenses.
Germany's newly appointed Minister of Housing, Verena Hubertz, aims to revolutionize the construction sector and make it more affordable. Her ambitious goals include drastically reducing housing construction costs by leveraging prefabricated walls and perpetual usufruct.
Minister Hubertz views prefabricated walls, manufactured in factories, as a game-changer for cost savings. "We could easily save 30 to 40% of construction costs, reducing it from 5,000 euros per square meter to 2,500 to 3,000 euros per square meter," she notes. She is convinced that the savings potential goes even further when we factor in financing costs.
Slowing down the increase in land costs is another key focus area for Minister Hubertz. She is exploring the concept of perpetual usufruct, where landowners grant long-term leases to developers instead of selling the land outright. This approach helps reduce upfront costs, providing flexibility in planning, and better cost management over the project's lifecycle.
Hubertz is cognizant of the challenges in achieving her goals, stating that "land costs are a major driver. We can't just press one button and solve the issue – we have to look at the entire lifecycle of a building and its cost drivers."
Although there are no set housing construction targets penned in the coalition agreement, Hubertz acknowledges that the current rate of around 250,000 apartments completed last year is unacceptable. She is optimistic about the uptick in building permits and strives to move past the disappointing output.
The construction industry is facing a significant slump, with a notable decrease in new apartment construction nationwide, according to authority reports. However, Minister Hubertz maintains that rigid targets set years ago may need revision in light of the rapidly changing world.
[1] Source: housing.fi, 2023[2] Source: councilforeurope.org, 2023][3] Source: planet-future.com, 2021][4] Source: derstandard.at, 2022]
- Verena Hubertz
- Construction Industry
- Housing Construction
- Prefabricated Walls
- Perpetual Usufruct (Ground Leases)
- Minister Hubertz's employment policy within the construction industry prioritizes the reduction of housing construction costs through innovative measures like prefabricated walls and the implementation of perpetual usufruct.
- In order to stabilize the housing-market, Minister Hubertz is advocating for investments in the construction sector, particularly through the adoption of cost-saving prefabrication methods and long-term leases, rather than relying on traditional land sales.
- The community policy for housing construction, as proposed by Minister Hubertz, includes a focus on financing, business strategies, and real-estate development, with the ultimate goal of making housing more affordable for all sectors of the industry and the economy.
