Housing construction in Hesse: Invisible gap is growing despite acute need!

Housing construction in Hesse: Invisible gap is growing despite acute need!

In Hesse, the housing shortage is becoming increasingly critical. Current figures show that the gap between newly built apartments and actual demand is continuing to widen. According to Axel Thousandpfund, board member of the Association of the Southwest German Housing Industry ( VdW Southwest ), the challenges slowing down housing construction are complex and not only affect the region, but are part of a nationwide problem.

A need for 26,000 new apartments per year is forecast for Hesse by 2030. However, construction performance to date deviates greatly from this target: only 21,300 apartments were completed in 2023, followed by an estimated 18,000 in 2024. Only around 15,000 new apartments are expected for 2025, although the final figures are still pending. This development is alarming, especially considering that 372,000 new apartments would be needed every year for the whole of Germany to meet demand BfP reported.

High construction costs and bureaucracy

A main reason for the slow construction activity is the high construction costs, which rose by over 4% in 2025 compared to the previous year. This leads to difficulties in the cost-covering realization of construction projects. In addition, a streamlining of the building regulations is required in order to overcome the ongoing backlog in new construction. The average rent in Hesse is now 7.30 euros per square meter, which illustrates the urgency of a solution.

Nationwide, the situation doesn't look any better. A study published at the beginning of February 2025 on behalf of the “Social Living” association shows that there are a good 550,000 shortage of apartments in Germany. The shortage of housing is exacerbated by high numbers of immigrants, while at the same time many apartments are empty. In 2023, around 52% of the population lived in rent, which is high by international standards.

Increasing rent burden and social responsibility

Rents in large cities have risen sharply. Between 2010 and 2022, average relet rents will increase by almost 70%. In cities like Cologne the net rent is 13.44 euros, while in Munich you even have to pay over 20 euros. A May 2022 census survey found 1.9 million homes were vacant, with many of them unused for over a year. The situation is still tense in large cities such as Berlin and Hamburg, where one in three empty apartments remains unrented for more than 12 months.

At the same time, the development shows an increasing rent burden: around 20 million main tenant households spent an average of 28% of their income on rent in 2022. Of these, 1.5 million households were affected by a rent burden of 50% or more. Given these figures, it is unsurprising that the need for social housing is increasing. In fact, the number of housing benefit recipients, which stood at 1.2 million at the end of 2023, has reached a new high.

The traffic light government has set itself the goal of creating 100,000 new social housing units annually, which has not yet been achieved. In the years 2021 to 2023, investment in social housing increased significantly, but the living space actually created falls short of requirements. These developments make it clear that the housing market urgently needs reforms and additional investments to effectively address the challenges.