Suche
Mein Konto
New building law: This is how Germany wants to reduce housing costs!
Germany urgently needs measures to build affordable housing. New amendments to the building law and cost reduction plans are pending.
New building law: This is how Germany wants to reduce housing costs!
Germany faces a significant challenge in the area of housing construction. While the demand for affordable housing continues to rise, the reality for the construction industry has drastically worsened. Current data shows that new construction costs have increased by almost 100% since 2020, which poses immense problems for municipal and cooperative housing companies in particular. These developments underline the need to go beyond financial support and reform the legal framework. According to Haufe Haufe reports that… The amendment to the Building Code (BauGB) in 2024 could bring key relief.
Particular attention is paid to various measures designed to simplify construction practice and speed up approval procedures. The most important points include the expansion of densification and expansion options as well as the introduction of a twelve-month deadline for development plans. Further measures in the amendment include the expansion of municipal pre-emption rights and a social area contribution to the creation of living space.
Urgent reforms necessary
The current challenges in the construction industry can be attributed, among other things, to rising material prices, high labor costs and long approval processes. Germany's major cities saw average construction costs increase by almost 50% between 2020 and 2024, with costs exceeding 4,400 euros per square meter. This development is perceived as alarming by developers, especially as approvals for new housing fell by 17% from 2023 to 2024. Forecasts suggest that the annual new construction rate could even fall to below 180,000 units, which is well below the target of 400,000 new apartments per year.
To deal with this crisis, the federal government has introduced a variety of measures. A central component is the ten-point plan, which, among other things, provides for the establishment of permanent contact persons in the building authorities and binding approval deadlines. In addition, the digitalization of building applications is being pushed forward and more flexible interpretations of state building regulations are being called for.
Progress through legal reforms
In September 2024, the Federal Cabinet passed a bill to modernize building planning law and promote urban development. The amendment to the BauGB aims to significantly accelerate administrative, planning and approval procedures. Key changes include the introduction of “Construction Turbo”, which allows for faster approval of housing projects in tight markets.
In addition, measures to strengthen climate protection and adapt to climatic changes in the construction industry were introduced. The new regulations authorize municipalities to order decentralized infiltration systems and green roofs, while the conditions for wind energy and geothermal energy are also to be further developed.
The financial framework is also crucial, as the federal government is providing a total of 20 billion euros for social housing from 2023 to 2027. This financial aid is to be further increased until 2028 in order to cushion the decline in housing construction and create more affordable living space.
Overall, Germany faces both challenges and opportunities in the area of housing construction. The new legal regulations and financial support systems could help bring about the change required to meet housing needs.