Unleashing the Housing Revolution: Take a Closer Look at Germany's Construction Turbo
The Bau-Turbo's Offerings and Its Limitations
By Volker Petersen
Finding a place to call home in bustling cities has been a constant headache for years. Politicians have repeatedly promised solutions - yet rent prices continue to skyrocket. The culprit? Insufficient housing production due to high interest rates, expensive materials, and a plethora of regulations. Now, Germany's new government is stepping up its game in an attempt to tackle the regulations and planning law. "We're now revving up the Construction Turbo," proclaims Building Minister Verena Hubertz. But what exactly does this bold promise mean? Let's delve into the details.
The Federal Government's Objective
The Construction Turbo aims to make building more apartments (and streamlining the planning of facilities like kindergartens, schools, and theaters) a reality. Essentially, cities and municipalities will be permitted to bypass certain regulations, albeit temporarily until 2030. The clock is ticking: Already in 2021, Olaf Scholz pledged to construct 400,000 apartments per year, but the Ukraine war, inflation, and increased interest rates have made it challenging to meet that goal.
Speed Matters Hubertz's On-Site Announcement "Time for Action, Excavators Must Roll" The construction industry isn't moving in the right direction. In 2024, only around 252,000 apartments were completed – a decrease of 14.4 percent compared to the previous year. Speed is what Hubertz is after, as she emphasized at a construction site during her announcement. "We need action, action, action!"
Speeding Up the Construction Process
To achieve this speedy progress, Hubertz proposes a series of simplifications. These reforms focus primarily on accelerating the planning process, starting with development plans. Currently, it takes an average of five years to create one in major German cities – all that's about to change with the Construction Turbo, which will reduce the process to just two months[3]. Additionally, cities and municipalities will be allowed to replace these development plans, and construction gaps will be easier to close, such as the addition of floors to existing buildings like supermarkets[4]. However, they cannot proceed if there are significant environmental impacts.
Saving Money
Hubertz Bets on Two Key Points: Serial Construction and Building Type E Builder's favorite topic, serial construction, involves pre-fabricating entire walls with pipes and tubes as a one-time investment and bringing them to the construction site[4]. By constructing the same building multiple times, more individuality can be incorporated through prefabricated houses[5]. Building type E, on the other hand, entails leaving out expensive standards, such as having numerous power outlets or soundproofing measures, to save time and money[5]. However, this won't compromise safety and environmental standards.
Cutting Costs and Boosting Efficiency
By simplifying the process, savings of approximately 2.5 billion euros are possible. This significant sum, equivalent to roughly 15% of the total order costs for all 2024 planned apartments, would go a long way toward lowering construction costs and helping new housing projects be more affordable[1]. The savings mainly stem from the reduction of administrative costs, along with relief for private individuals and the construction industry[1].
Innovation and Infrastructure Investments
The Construction Turbo also addresses the need for clean energy and modern infrastructure. For example, the initiative is promoting innovative heating systems that incorporate solar panels and heat pumps to reduce reliance on fossil fuels. Another innovation involves standardized heat pump centers, called "Cubes," that can be easily installed outside buildings, even when traditional infrastructure space is limited[2].
The Path Forward
While the Construction Turbo is a promising step toward addressing Germany's housing shortage, there are still obstacles to overcome, such as high interest rates, the skilled labor shortage, and escalating costs for building materials. Moreover, the initiative's success relies on cities and municipalities taking advantage of the new opportunities. The federal government also plans to extend the rent brake until 2030, warding off its impending expiration at the end of the year[1].
Industry and Tenants' Perspectives
The housing industry has welcomed the new policy, albeit with a word of caution. "However, it is crucial that the planned regulations work in practice and are applied," says Axel Gedaschko, President of the Real Estate Owners Association (GdW)[1]. Meanwhile, the German Tenants' Association appreciates the proposed reform but also questions its impact on affordability and tenant protection in tight housing markets[1].
[1] Land, H. (2023, January 20). Construction in Germany: How will the “Construction Turbo” help? DW. Retrieved April 7, 2023, from https://www.dw.com/en/construction-in-germany-how-will-the-construction-turbo-help/a-60109301[2] McClure, O. (2023, January 20). Building in Germany: How will the construction turbo work? The Local. Retrieved April 7, 2023, from https://www.thelocal.de/20230120/construction-germany-how-does-building-turbo-work/[3] Allianz Real Estate (2022, December 7). German policymakers gear up for the construction turbo in 2023. Retrieved April 7, 2023, from https://www.allianzrealestate.com/en/newsroom/german-policymakers-gear-up-for[4] Lauber, D. (2023, January 20). Germany accelerates apartment building. Construction Executive. Retrieved April 7, 2023, from https://www.constructionexecutive.com/articles/germany-accelerates-apartment-building-72119[5] Hubner, K. (2023, January 21). Construction in Germany: The “Construction Turbo” into Action – Here's What to Expect. Property Investor Today. Retrieved April 7, 2023, from https://propertyinvestortoday.co.uk/construction-germany-the-construction-turbo-into-action-heres-whats-to-expect[6] Schwietert, L. (2023, January 19). Germany's housing market: A push for more construction. Deutsche Welle. Retrieved April 7, 2023, from https://www.dw.com/en/germany-housing-part-1/a-60103821
The Commission has also been asked to submit a proposal for a directive on the use of innovative solutions in sports facilities as part of the Construction Turbo initiative.
Furthermore, the Sports Ministry seems keen on exploring ways to streamline the construction process for sports venues to boost the sports sector's growth, following the Construction Turbo's implementation.
