Before the summit meeting in the Chancellery
The construction industry warns the Chancellor urgently about the housing crisis
By Philip Scupin
September 23, 2023, 6:02 a.m
There is already a shortage of 700,000 apartments in Germany. However, the construction crisis is making the situation even worse. Ahead of the construction summit, the industry is now increasing pressure on the government.
Shortly before the housing construction summit on Monday in the Chancellery, the construction industry is demanding massive help from the federal government in the fight against the crisis and the rental crisis. The main association of the German construction industry is putting pressure on Chancellor Olaf Scholz in particular. In a demand paper that is available exclusively to ntv, the association writes: “We need a Chancellor’s decision for more housing construction in Germany.”
In the paper, the construction industry advocates reducing the real estate transfer tax or temporarily suspending it completely. She also calls for fewer restrictions on building standards: The traffic light coalition should refrain from prescribing the EH-40 energy standard for all new buildings from 2025 – as is actually provided for in the coalition agreement. She should also withdraw the restriction on new construction funding from the EH-55 standard to EH-40, “since the effort and benefits are no longer in harmony”.
The association is calling on the government to provide a reliable funding framework for new housing construction as well as a massive expansion of the state-run KfW development bank’s “Climate-Friendly New Building” program. Equity-supporting loans for private, commercial and public developers are also important. The coalition’s planned better tax depreciation for housing construction is a start. But something can only be written off if it has been invested beforehand. “Without a construction package, housing construction will not get back on track in the short term.” The package is intended to take pressure off the tense rental market and secure employment for around a million people in construction.
“All indicators in construction are pointing downwards”
In the paper, the main association of the construction industry paints a bleak picture of the situation: the number of approvals for new apartments has plummeted. According to the construction industry, the situation with canceled orders is particularly dramatic. While three percent of construction companies were still struggling with this at the beginning of 2022, by August 2023 the figure had already risen to 21 percent. Almost every second company complains about a lack of orders. “All construction indicators are pointing clearly downwards, and there is no trend reversal in sight.” According to the association, there is therefore a risk of workers leaving the industry from 2024 at the latest. “This means nothing less than the modernization of Germany as a place to live and do business is at stake.”
The association names several reasons for the crisis in housing construction: higher interest rates, expensive building materials and reduced government funding for new construction. “Housing construction in Germany lacks a reliable framework for investments.” For private builders, the high inflation is compounded. Construction prices for new residential construction have risen by 32.6 percent in the last two and a half years.
The industry does not expect the traffic light coalition to achieve its goal of 400,000 new apartments per year. On the contrary: around 250,000 apartments are expected to be built in the current year, and only just over 200,000 in the next. “The adequate supply of affordable housing to broad sections of the population and urgently needed skilled workers from abroad is not being achieved.”