In view of the adjustment meeting for the 2027 federal budget, thirty leading housing-related organisations and associations have addressed an urgent appeal to the Federal Government, parliament and the political parties. The alliance, united under the 'Impulse für den Wohnungsbau' initiative, includes key players from the construction and real estate sectors, the construction union Industriegewerkschaft Bauen-Agrar-Umwelt (IG BAU), and the German Tenants' Association (Deutscher Mieterbund). They issue a united warning against the planned cuts to state subsidies in what is already a strained market environment.
The initiative stresses that a combination of higher building standards, high interest rates and elevated construction costs has weighed on the industry for years. If federal funding is now cut even further in parallel, this threatens to bring many planned construction projects to a final halt. The experts point to current economic forecasts: according to calculations by the ifo Institute, construction activity is heading towards a new record low of just 185,000 completed dwellings this year.
Economic follow-up costs and impending loss of prosperity
In the industry alliance's view, savings in new-build support will prove to be an economic boomerang in the longer term. Every euro of funding superficially cut from the budget entails substantial subsequent burdens for public finances in the medium term. Declining construction activity not only weakens the domestic economy and general growth prospects over the long term, but also increases state transfer spending on housing benefit and accommodation costs as a result of the growing housing shortage.
To halt the downward spiral, the alliance has put forward an agenda described as a political housing navigation guide. This six-point plan calls, among other things, for an end to budget cuts in affordable rental housing, a practical realignment of building standards, and a sustained strengthening of social housing backed jointly with the federal states. Furthermore, tangible support is needed for first-time buyers of owner-occupied housing, for instance through state guarantees, loan assistance and a substantial reduction in property acquisition tax.
Simplified framework conditions for planning and existing stock
In addition to fiscal stimuli, the alliance calls for a significant reduction in red tape and greater momentum in regulatory adjustments to place the lower-cost delivery of housing on a reliable footing.
- —Legally secure and practical implementation of the Gebäudetyp-E Act to lower construction costs, as well as swift adaptation of the state building codes.
- —Provision of more building land through densification, vertical extension and the facilitated conversion of commercial real estate via practical conversion legislation.
- —Discounted transfer of public land for housing development in areas with strained housing markets.
- —Reliable and long-term provision of refurbishment funds from the Climate and Transformation Fund (KTF) for modernising the existing building stock.
Finally, the associations appeal to members of parliament to avert the cuts in the final stages of the legislative process in the Bundestag. A federal budget must not be planned without regard for the real needs of the housing markets, as new construction represents the only sustainable measure against worsening housing shortages.
