Housing Deficit Keeps Deepening


March 2018

The stated goal of the Grand Coalition that was just voted into office as Germany’s next government is to raise 1.5 million new flats in Germany between now and 2021 (source: This would break down into 375,000 flats annually, a figure not even remotely achieved in recent years. During the first eleven months of last year, only 275,000 new-build flats were completed (source: To make things worse, the number of planning permissions dropped year on year in 2017 (source:, making it rather likely that the completions target will be missed both this and next year. A survey that the Pestel Institute and Arbeitsgemeinschaft für zeitgemäßes Bauen (a workshop for contemporary construction) compiled on behalf of Verbändebündnis Wohnungsbau (an alliance of industry associations for the promotion of housing construction), and that was presented on occasion of the Housing Construction Day in Berlin on 01 March, therefore calls for action, and has levelled criticism and demands at German lawmakers (source: The survey suggests that a deficit of around one million flats has formed in Germany during the years since 2009. The authors of the survey assume therefore that 400,000 new flats will be needed annually between now and 2021—a figure that actually exceeds the target the Grand Coalition set for itself. The survey lays the blame for the wide gap that has opened up between housing construction and demographic trend over the past ten years mainly at the government’s doorstep. It argues that the legislature is largely responsible for the rise in construction costs, which clearly hampers the development of affordable residential accommodation. The “tightened energy specifications and the generally higher requirements in housing construction” are among the key contributing factors that have made construction more expensive and less profitable, or so the survey argues. Another major point of criticism is that not enough land was zoned for development although there is basically plenty of available land. The survey authors thus call for an “at least temporary suspension of the restrictive zoning policy” in order to get the zoning of development land up to speed and to expedite the swift construction of additional housing.

Grand Coalition has Adopted Several Demands

Similar conclusions are drawn by a white paper that a broad-based alliance of associations from the building and real estate industry, the German Tenant Union (DMB) and the BAU industrial union published in January (source: The paper demands, inter alia, that the zoning of building land be stepped up, that approval procedures be accelerated, that building regulations be simplified, and tax concessions be introduced.Some of these demands were actually adopted by the incoming government in their coalition agreement. For instance, municipalities are to be supported in the zoning of building land, the building law is to be harmonised, and the rental housing construction is to be promoted through a special depreciation allowance, among other measures. Moreover, the coalition partners intend to take action to lower construction costs. Whether or not this “residential accommodation action plan,” as the Grand Coalition has labelled its package of measures, will suffice to achieve the annual completion of 375,000 or indeed 400,000 new flats remains to be seen. The one thing perfectly obvious, in any case, is that the current completion and approval figures necessitate swift action on the part of the body politic.

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