Habeck pulls the emergency brake
The federal government stops subsidies for efficient houses
01/25/2022 02:21 am
For the construction industry it is a “shock for builders and those wanting to build”, the housing industry fears an “emergency stop” in climate protection in the building sector: The current support from the state KfW for energy-efficient buildings has been stopped with immediate effect. The Ministry of Economics promises a speedy reorganization.
Bad news for house builders: The new federal government has stopped state subsidies for new buildings in view of a flood of applications and the threat of additional costs running into billions. It is about programs for more energy efficiency. This is also justified with a “mismanagement” in climate protection. The Ministry of Economic Affairs spoke internally of an “emergency brake”. The move sparked protests from the housing industry.
The federal government is now planning new subsidy programs and statutory new building standards. “The application freeze is sad and disappointing news for the applicants concerned,” said Secretary of State for Energy Patrick Graichen. “We would have liked to have avoided this step. However, in recent years there has been a failure to adapt the funding framework and the legal new building standards.” Instead, an outdated subsidy was continued that set the wrong incentives.
According to Graichen, these false incentives have produced an unprecedented run on funds. “A stop to the old funding was therefore now unavoidable. As the new federal government, we are taking this unfortunate situation as an opportunity to quickly reorganize the funding and legal standards for new buildings.” Specifically, no new applications for funding for the programs of the state development bank KfW in the federal funding for efficient buildings can be made with immediate effect. According to the Ministry, this applies to the following programmes: the so-called Efficiency House 55 in new builds, the Efficiency House (EH) 40 in new builds and energy-efficient refurbishment.
The new construction subsidy for the so-called Efficiency House 55 would have expired at the end of the month anyway. According to the ministry, a decision on the future of new construction funding for EH40 new buildings should be made quickly. The rating means that the building uses only 55 percent or 40 percent of the energy that a standard house needs. One measure for more energy efficiency is thermal insulation. Funding for refurbishment is to be resumed as soon as appropriate budgetary funds are made available.
Funding program was too popular
The approaching end of the EH55 new building subsidy announced in November 2021 has led to an unprecedented “run” on the subsidy, according to the ministry. However, the funds currently available are not sufficient. In the period from November 2021 to today alone, KfW has received applications for a funding volume of more than 20 billion euros. According to the ministry, it has not yet been decided what will happen to the applications for new construction funding that have been received but not yet approved. It will be checked whether the development bank can offer low-interest loans. With the previous subsidy, there was a repayment or investment subsidy.
According to the Ministry, the Efficiency House 55 is a building standard that has long since established itself on the market. “Where climate protection is written on it, climate protection must also be included,” says Graichen. “We are currently funding the wrong thing, and this money is then not available for actually effective climate protection measures, for example for the very important building renovation. It can’t go on like this.” In the future, subsidies should be used in a targeted manner where the CO2 savings are greatest. In the building sector, this is particularly the case with renovation measures. There was a “massive climate policy and fiscal mismanagement” by the previous black-red government.
SPD, Greens and FDP had announced in the coalition agreement that they wanted to tighten the new building standards. In the Ministry of Economics, there was talk of “contaminated sites” with a view to the funding programs that have now been stopped.
The real estate industry reacted with outrage
The decision to stop funding triggered a lot of criticism. As a result, around 300,000 apartments in Germany could not be built or modernized as planned, according to the central association of the housing industry GdW. The Central Real Estate Committee spoke of a “slap in the neck” for the energetic renovation. Many companies had relied on being able to use the financial resources made available for building subsidies for their current projects and projects that were already being planned. The goal of 400,000 new apartments per year is a long way off. The Federal Association of German Prefabricated Construction emphasized: “This step comes as a complete surprise in its fundamental nature and affects the entire construction industry as well as countless builders and investors.” Suddenly a lot of funding was up in the air.
“Bad news for climate protection: The traffic light surprisingly stopped an important funding program for energy-efficient building renovation today,” wrote CSU boss Markus Söder on Twitter. NRW Building Minister Ina Scharrenbach said the government’s decision would torpedo the affordability of housing and public housing construction measures. Tim-Oliver Müller from the Main Association of the German Construction Industry criticized: “A short-term funding freeze without a clear perspective of how things will continue is fatal and will undermine countless projects that are already in the pipeline.”