The traffic light coalition has promised 400,000 apartments a year. But the construction of new housing is failing, which experts consider a “danger to society”. Speaking on Housing Day, Construction Minister Clara Geivitz (SPD) listed the main problems the sector is currently suffering from: rising interest charges, cautious investors, collapsing building permits.
The Klara Geivitz ministry, created specifically for the development of the “construction and housing” theme, has existed for a year. Its top priority is to build 400,000 new apartments a year. But it’s not going well. Instead of building more, the industry is now regressing.
The main problem is that the Geivitz ministry has too little money to deal effectively with the current crisis. Currently, the government is using the funds for other purposes: reducing energy costs, strengthening the German armed forces. In the construction sector, billions are channeled into the promotion of climate-friendly construction, i.e. the Habek ministry.
The day before, Habek and Geivitz presented measures to finance the transition to climate-neutral heating systems. The state wants to pay 30% of the costs for all citizens and an additional 20% for those with special needs or owners of very old heating systems. It is urgent and the renovation is expensive.
On the other hand, it is money that could also be used for new construction. But since 2021, when the coalition agreement was signed, the government’s priorities have changed: today, conversion rather than new construction is on the agenda. At least for now.
“A danger to the society”
For several months, experts and representatives of the construction industry have been sounding the alarm. In an effort to underline the danger of the situation, six leaders of “housing alliance” associations held a press conference and warned in strong terms that the situation in the construction sector is worse than in any time since World War II. The housing market is at a crossroads, and if politicians don’t act, it will completely collapse. The housing issue is becoming “a danger to our society”.
New figures from the housing research institute ARGE back up the claims with grim figures: instead of the 400,000 apartments promised by the federal government, only 280,000 have been built in 2022. Only 240,000 are expected to be built this year . the supply of building materials.
So many interesting things could be expected on construction sites in Germany, if not for one “BUT” – rising costs. Building materials are now much more expensive than they were before the conflict in Ukraine, and the interest rates charged by banks for construction have skyrocketed. Thus, the profitable construction of particularly affordable housing is hardly possible. According to the study, 43% of the 1,500 companies say: “For now, we are stopping new construction, because it is not profitable at such prices.
Faced with what is happening, the associations are united in their appeal to politicians: a special fund of 50 billion euros is needed for new construction. And immediately.
“Special funds sound good,” says the Minister of Building. “But that amount is actually part of the debt.”
Instead, Geivitz promises, above all, the simplification and standardization of specifications for the industry. After all, there are still 16 different building codes, one for each federal state. Construction associations complain of “bureaucratic madness”.
Habek inspires hope
In a discussion with industry representatives, Habek ultimately delivers the dropping line: “I would argue for a colleague to be allowed to spend more money,” he says of Geivitz. The political justification is given for this: most of the funds are currently intended to overcome the crisis – and the construction sector is in crisis.
The proposals, formulated with care and in the subjunctive, nevertheless pleased the representatives of the building associations. Axel Gedashko, president of the Federal Association of German Housing and Real Estate Companies (GdW), speaks of “a small glimmer of hope”. But at the same time, he stresses that it must be done quickly.
Apparently, Clara Geivitz can only dream of peace.
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