The construction turbo is starting – but is the boost enough?

The housing shortage is socially explosive and is leading to disputes over housing distribution in our own country. Based on this realization, and against the backdrop of a housing market situation that is becoming more dramatic by the month, the Bundestag has now finally(!) passed the so-called construction boost – a law that is primarily intended to accelerate the designation of building land.

Strictly speaking, it’s less a construction boost than a building land boost: It creates the conditions for faster construction in the future.

I consider this a step in the right direction. Because anyone who talks about more living space must also talk about available land. In many regions, suitable land is the real bottleneck – not the willingness to build. If procedures are simplified in the future, planning times are drastically shortened, and municipal processes are accelerated, this could actually bring some movement to the market. For example, in the future, it should only take three (!) months to obtain approval, even for larger construction projects. Not in China, but in Germany! The first developer to achieve this would probably belong in the Guinness Book of Records.

This requires a local building authority that is willing to rethink things, break down barriers, and commit to the same goal: much more housing for our country, much faster. And just as the administration must follow suit, investors and project developers have a duty: This is about housing, not land speculation. Real added value for the people of Germany can only be created where returns and social benefits converge.

And one more thing remains clear: Accelerated development of building land alone is not enough. Without significant tax incentives for new housing construction – for example, through increased declining-balance depreciation or further simplified and improved subsidy programs – the dilemma of high construction costs and a still-challenging interest rate environment will be almost impossible to overcome.
What is needed now, therefore, is a genuine investment offensive for our country with framework conditions that make construction attractive again – for private builders, project developers, and institutional investors.

Despite the existing challenges, today’s decision remains an encouraging signal. Politicians recognize that urgent action is needed and that housing construction must once again become the focus. This is a start—and hopefully the prelude to a comprehensive offensive in new housing construction.

Ernst-M. Ehrenkönig · CEO & Managing Partner