The German government has significantly reduced its subsidies for building renovations, which has met with intense opposition from the institutional housing industry. Associations such as the vdw Verband der Wohnungs- und Immobilienwirtschaft Niedersachsen Bremen and the BFW Landesverband Niedersachsen Bremen describe this development as a “fiasco at the expense of thousands of tenant households and climate protection”. With the planned reform of the Federal Funding for Efficient Buildings (BEG), funding will be widely cut, and new funding applications will no longer be accepted as of now. A particularly critical point is the reduction of eligible costs for individual energy-efficiency measures in multi-family houses, which, according to calculations by the associations, lowers the basis for a twelve-family house from EUR 360,000 to EUR 135,000. This weakens the modernisation path of gradual energy-efficient renewal of existing buildings in the course of otherwise necessary maintenance, which is considered economically and ecologically sensible.
Impact on Efficiency House Renovations and Funding Equity
Furthermore, significant cuts to efficiency house renovations are looming. Limiting the bonus for so-called Worst Performing Buildings to efficiency house levels 40 EE, 55 EE, and 70 EE reduces funding efficiency. The associations demand an extension of this bonus to Efficiency House 85. Further criticism is directed at the funding architecture, which favours owner-occupiers over socially-oriented landlords. Dr. Susanne Schmitt, vdw Association Director, emphasises that effective social security would require a stronger focus of funding on rented housing stock, especially where financial scope is limited.
The current situation is reminiscent of the KfW's funding freeze on housing industry programmes in January 2022. Landlord associations state that the trust of housing companies and private landlords in the existing funding system is once again being shaken, and the achievement of climate targets in the building sector is consequently being pushed far into the future. Dirk Streicher, Chairman of the BFW Landesverband Niedersachsen/Bremen e.V., criticises the approach as irresponsible and as questioning the transformation of the real estate industry towards climate neutrality. He points out that a federal withdrawal from responsibility for existing buildings endangers climate protection and is an existential threat to small and medium-sized enterprises. A funding roller coaster is rejected; instead, reliability is demanded.
Demands and Prospects
The associations appeal to the federal government to reverse the massive funding cuts for multi-family houses, to establish long-term reliable funding conditions for investments in the existing building stock, and to improve funding for particularly energy-inefficient buildings. Dr. Susanne Schmitt expresses the hope that an agreement can be reached with the State of Lower Saxony on optimising modernisation and renovation funding, especially after the new housing promotion with its conditions for new construction comes into force. She highlights the urgent need for action after the cessation of federal subsidies.
David Jacob Huber, BFW Managing Director, adds that companies have already spent millions of euros on concrete plans based on previous funding, which can now not be realised. He emphasises the necessity for the State of Lower Saxony to pursue pragmatic approaches in social housing promotion and that this partnership-based approach in Lower Saxony and Bremen should be consistently continued after the federal-level failure. The vdw represents 180 housing companies that manage around 400,000 flats and house almost one million people. Within the Lower Saxony/Bremen area of responsibility, the vdw is the central provider of rental flats.
