It has become quiet about a key promise made by Olaf Scholz. 400,000 new apartments every year, 100,000 of them social housing, all over the country, today’s chancellor praised the creation of more supply during the election campaign as the best remedy against the high rents.
“It’s not rocket science – we just have to want it,” said Scholz, happily referring to his construction offensive as Hamburg’s first mayor. He made his confidant Klara Geywitz Minister of Construction, both had also applied together – in vain – for the SPD party chairmanship.
But almost all experts agree that the goal cannot be achieved for the traffic light’s first full year of government. And it’s Geywitz who practically raises the white flag. Because the construction boom of the last few years has come to a standstill.
The Federal Statistical Office determined that only 293,393 apartments were completed in 2021, 4.2 percent fewer than in the previous year. “The current figures do not satisfy me as Federal Minister for Building,” complains Geywitz. But: The number of apartments that have already been approved but not yet built has risen to 846,830.
She is betting that this overhang will also lead to more completed apartments in the next few years. “Projects that have been approved will be stopped, but not canceled entirely,” the minister tries to be optimistic.
The problem is that private builders and companies are waiting to see how delivery bottlenecks, shortages of raw materials and sharp price increases will continue to have an impact. “The German state has hardly any influence on these extremely difficult conditions,” emphasizes the minister. In addition, financing is becoming more expensive with the currently rising interest rates on loans – which is why projects that have already been planned are being canceled again.
The Federal Association of German Housing and Real Estate Companies (GdW) already sees “harbingers of a dramatic slump in housing construction in Germany”. As a result of supply chain problems, a shortage of materials and skilled workers, price explosions and the unspeakable chaos surrounding KfW funds, the failure to achieve the construction targets will be cemented in the future,” says GdW President Axel Gedaschko.
The Bauen-Agrar-Umwelt industrial union (IG BAU) called on the federal and state governments to “go into turbo gear and urgently put together a special package of social housing. “Just reducing VAT from 19 to seven percent for social housing would have an enormous subsidy effect,” says IG-BAU boss Robert Feiger.
But within the traffic light coalition, Finance Minister Christian Lindner (FDP) is trying to put a stop to the new state program – otherwise it will definitely not be possible with his goal of complying with the debt brake again from next year.
And they don’t believe in the Ministry of Finance that more will be built with more funding, but rather that will only further heat up prices and stir up new free-rider effects. Instead, the government is considering how the shortage of building materials could perhaps be alleviated with other sources of supply.
Geywitz wants to focus on better conditions for the time being. “Digitize approval and planning processes, harmonize the 16 state regulations in a meaningful way and ease the conditions for serial construction”, are their goals – serial construction means that apartments are built “off the peg”, i.e. in series types and not always individually planned .
This is now being worked out in the Alliance for Affordable Housing. “Specifically, we will examine individual regulations with the federal states, which make little sense due to their regional differences.” In addition, she is planning a timber construction strategy in order to build far more with this material. She also brought models such as hire purchase into play, but no concrete plans are known so far.
But you and Scholz are running out of time, due to the Russian war of aggression against Ukraine, the inflation costs and delivery bottlenecks, the conditions have worsened again. But anyone who sets such high goals – and is elected for them – must also be measured by them.
On Wednesday, a small cost damper was agreed by the cabinet, at least for tenants. From next year, landlords should pay part of the CO2 price for heating costs – all the more, the less climate-friendly their house is.
In the future, a ten-step model will apply to the distribution of costs between tenants and landlords. For houses with very high greenhouse gas emissions per square meter, landlords would pay 90 percent of the CO2 price, while tenants with very low emissions would have to bear the costs themselves. This should encourage landlords to make energy-saving renovations and tenants to save energy.
But: In the fall, due to the increased energy costs, very expensive ancillary cost bills will come anyway – and after the previous relief packages amounting to 34 billion euros, there is little further leeway because of the austerity constraints mentioned.
The building policy spokesman for the CDU/CSU parliamentary group, Jan-Marco Luczak, is calling on the chancellor and his building minister to take action so that more supply reduces cost pressure. “The decline in housing construction is a dramatic signal and must be a wake-up call for the federal government,” he emphasized to the Tagesspiegel.
“The federal government can’t do anything about the war in Ukraine and the resulting broken supply chains, but unfortunately it is doing everything within its area of responsibility to miss the very important goal of 1.6 million new apartments in this legislative period.”
The KfW funding chaos surrounding the funding for efficient buildings, which was stopped by Economics Minister Robert Habeck (Greens) because of the billions in costs, had massively destroyed trust and robbed tens of thousands of families and housing companies of the basis for their financing. “Countless projects are now being shelved, tens of thousands of apartments are not being built.”
Everywhere there is talk of a turning point, which must also apply to the real estate sector, emphasizes the Berlin member of the Bundestag. “The large number of building regulations must be radically streamlined and planning processes further accelerated and digitized.” There is an implementation deficit at the Minister of Construction. “Warm words alone do not build homes.”
Caren Lay, the spokeswoman for rent, construction and housing policy for the Left Group, emphasizes: “The new building goals of the federal government are currently a castle in the air”. But it also depends on what is being built.
“Affordable rental housing is needed for people with low and normal incomes.” 100,000 new social housing units per year are the right goal for this. “Unfortunately, the traffic light does not provide the appropriate funds for this. 14.5 billion euros in 5 years is not enough at all.”
At least 10 billion euros from the federal government are needed for this. But the pressure to save is increasing – and Scholz has so far been silent about how he intends to keep his promise. “If the targets are torn, it’s not just because of the war, a lack of building materials or staff,” Lay warns the traffic light against false excuses.