Germany faces housing crisis/ Plans legal relief and budget increase for housing construction
"Construction and housing are the social issues of our time," the German Ministry of Construction and Housing announced when it published a plan to help with the process of affordable housing. With the cabinet set to present its 2026 draft budget on July 30, housing spending is one of the main points.
In a country where it can take longer to get approval for a development project than to build it, the ministry said it wanted to give local authorities a way to bypass labyrinthine urban planning laws. The feature, dubbed "Bau-Turbo" (turbo construction), would constitute a new paragraph in Germany's building code.
If the legislation is passed in the autumn, municipalities will be able to approve construction and renovation projects that deviate from the provisions of the Code, if they are for new residential buildings. Planning applications will also be automatically approved after two months, unless vetoed by the municipality.
Building regulations vary in each of Germany's 16 states and between municipalities, creating a patchwork of rules that dictate everything from the number of electrical outlets per room to the shape and color of roofs.
The Construction Ministry estimates that its legislative change, which will be approved by the Bundestag in the fall, will save companies, citizens and local authorities around 2.5 billion euros a year. Germany needs an economic stimulus package for housing construction starting in the fall, accompanied by a loan program with interest rates fixed at 2% for the next 20 years.
According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), Germany will need approximately 320,000 new homes each year until 2030. The previous federal government, which lost its majority in the February 2025 elections, promised to build 400,000 homes per year. But by 2024, that figure was only 251,900, 14.4% less than last year.
The new coalition of the center-right Christian Democrats (CDU/CSU) and the center-left Social Democrats (SPD) is planning to increase the Construction Ministry's budget for 2025 to 7.4 billion euros, from 6.7 billion euros last year.
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