What could benefit affordable housing in Germany

April 29, 2019

Hardly ever has the property industry been so much in the focus of public attention as it is now. But unfortunately—particularly in Berlin—this mainly takes the form of calls for the expropriation of housing companies. In actual fact, however, this sham debate about how best to provide more affordable housing is counter-productive and will ultimately harm tenants, users, and apartment-hunters themselves. What is needed instead is a real construction offensive to create more housing.

A construction offensive is needed to keep housing affordable.
A construction offensive is needed to keep housing affordable.© shutterstock / Zephyr_p

One thing that could help would be an acceleration of planning and building permit procedures and an improvement in the general political conditions for building. Any unnecessary delays in the procedures involved in the construction and planning phases drive up costs, which, in turn, results in higher purchase prices and rents than were originally calculated.

Less bureaucracy, from parking to high-rises

The ZIA has presented a total of twenty-eight proposals to politicians on how planning and construction could be accelerated and costs reduced. Even simply standardizing Federal Building Regulations would result in developers not having to consider sixteen different sets of regulations for parking spaces, fire safety, and distance requirements in their plans. The digitalization of the administration would also help achieve this objective. A digital construction file, for example, would improve cooperation between all players involved in the construction process, from planning to acceptance. In addition, building regulations need to be generally simplified. In 1990, there were about 5,000 building regulations in Germany, today there are more than 20,000.

Specifically, we suggest the introduction of prototype high-rise guidelines—among other things. In Germany there are traditionally two types of buildings: Low buildings which can be reached using an aerial ladder are much easier to handle than high ones. This is an anachronism. In Austria there are three levels; this should be our prototype. It could help us to tap further potential through affordable loft extensions and additional stories.

Countermeasures, from land purchases to the depreciation of fixed assets

Prices have been pushed up by the general tax situation. Since 2007, stamp duty has been raised twenty-six times by the German federal states. This drives up both rents and ancillary purchase costs. While this money boosts state and municipal budgets, it is ultimately missing for housing projects and makes building expensive. Raising the linear depreciation of fixed assets – instead of the impractical special depreciation—is also an established, uncontested instrument that does not depend on the state of the economy and would benefit affordable housing and construction.

Dr. Andreas Mattner

President of German real estate trade association ZIA—Zentraler Immobilien Ausschuss e. V.