Chancellor Scholz promises €45 billion by 2027 to help Germany’s construction industry recover. Meanwhile, Minister Geywitz wants to review the heating law again.
Chancellor Olaf Scholz criticized the slow pace of housing construction and described the creation of new affordable housing spaces as an urgent need. “It is necessary to build more affordable housing in Germany. This means we must massively expand housing construction activities,” said the Chancellor in Berlin when presenting a 14-point package of measures. Among other things, it provides tax advantages through special depreciation rules. Furthermore, the traffic light is bringing down the ecological standard: the EH40 energy-saving standard for new buildings agreed in the coalition agreement for 2025 will be suspended.
The aim is to ensure that the decision to build apartments is made now, despite rising interest rates. A key instrument for this could be series construction, SPD politician Scholz said before the start of a crisis meeting with the construction industry in Berlin.
With serial construction, a house approved in principle can also be built in other neighborhoods without new bureaucratic procedures. This makes construction cheaper and faster, Scholz emphasized. Conditions must now be created in cooperation with the federal states.
“We will have more apartments and affordable rents in the medium term”
Scholz argued that the European Central Bank’s interest rate increases are the right thing to do – but they would not make the framework conditions for the construction sector any easier. The federal government alone will make available an amount of 18 billion euros by 2027, said the Chancellor. If we add all the programs – including those of the federal states – we obtain 45 billion euros.
Construction Minister Klara Geywitz was optimistic that the federal government’s 14-point program would change and make a lot possible. “With our new financing, more people will be able to buy a home, existing or new.”
“By thinking more holistically about climate protection in the construction sector, we will save more CO2, and by making it significantly easier to build new apartments, we will have more apartments and affordable rents in the medium term.” The real estate and construction sectors reacted with “cautious optimism”.
Gewitz: Make the heating law “simpler.”
Geywitz also announced that he wanted to review the heating law that had just been passed. The law could be “simpler”, “with less detailed control and more focus on CO2 emissions”, the SPD politician told “Welt”. She “will sort it out.”
The controversial amendment to the Building Energy Act (GEG) was approved in the Bundestag at the beginning of September after some delay. The Federal Council is expected to address this this week. The traffic light coalition had already held heated debates on the issue for months.
The warming transition is a “generational task”, Geywitz told “Welt”. Therefore, she understands that the long debates about the law have caused uncertainty. In principle, the approach was correct. “In fact, this law is very important and correct: our heating is an essential key to reducing CO2 emissions in the construction sector.”
During the parliamentary process, the project originally approved by the cabinet was again fundamentally revised. With GEG, newly installed heating systems will in future have to be powered by at least 65% renewable energy. Classic oil and gas heating systems generally cannot achieve this goal. The rules were originally due to apply from January 2024, but in most cases they will now arrive much later. There are also numerous exceptions.
Construction and housing industries approval
In the construction industry, projects listed in the 14-point program are approved. “The traffic light clearly recognized the scale of the situation,” the Central Construction Industry Association said. The real estate association ZIA was also positive: “New realism in climate protection and clear signs of tax cuts show that the discussions of recent weeks have paid off.”
The main German construction industry association praised the package as “more extensive than expected”. It is important now that a more attractive interest rate reduction program is also examined.
The housing industry association GdW, which boycotted the meeting at the Chancellery, also recorded positive developments. Unfortunately, nothing happened for socially oriented real estate companies. This means that these companies would not be able to use the new depreciation options – called Afa.
Among other things, the association called for a reduction in VAT from 19 to seven percent for affordable housing and KfW loans at a reduced interest rate of one percent. Thus, affordable rents for new buildings could once again be guaranteed.
Disappointment among environmental associations
Environmental associations, in particular, were disappointed: “The package of traffic light measures for building and housing is not a step towards a more socially fair and ecological future, but rather a fiasco”, criticized the director general of the Federation for the Environment and Nature Conservation. (BUND), Antje von Broock.
Saying goodbye to the ecological standard is completely unacceptable. “With the traffic light plans, we are sliding further into climate catastrophe and more and more people don’t know how they are going to pay their next heating bill.”