[Commuting Hell Liberation Diary]⑧ "400,000 Households Annually" Germany's All-Out Housing Supply Effort

Housing Supply as the Best Welfare... German Government's Housing Policy Includes
Simplifying Building Permits, Promoting Smart Construction, and Tax Reform

German Chancellor Olaf Scholz (right) and Clara Geywitz, Minister of Housing, Urban Development and Construction, hold a policy booklet prepared by the "Alliance for Affordable Housing" at a press conference on housing policy held at the Chancellor's residence in Berlin on the 12th of last month (local time).

Germany established a public-private partnership organization called the 'Alliance for Affordable Housing (B?ndnis bezahlbarer Wohnraum)' on April 27 this year. Under the leadership of the Federal Ministry of Housing, Urban Development, and Construction, virtually all stakeholders related to housing and construction participated. This includes state governments, construction companies, academia, as well as labor unions, tenant organizations, and student groups. Their concern was 'How can we build more housing at more affordable prices?' On October 12, six months after the alliance was formed, German Chancellor Olaf Scholz announced the results personally.

Chancellor Scholz stated, "Despite various difficult domestic and international conditions, the main goal is to supply 400,000 housing units annually across Germany," and announced 187 specific measures to implement this. The content is broadly divided into ▲financial support from the federal government ▲remodeling of existing housing ▲expedited permits ▲smart construction ▲land acquisition support ▲tax reform, among others.

First, the federal government set a concrete target of 400,000 housing units annually. Of these, 100,000 units will be 'social housing,' a type of rental housing supported by the government. To this end, a federal fund of 14.5 billion euros will be provided.

Institutional support measures to quickly resolve the severe housing shortage will also be extensively prepared. Simplifying the complex and cumbersome permitting process is key. Unlike Korea, which prefers large-scale complex construction, Germany tends to allow small-scale developments easily whenever there is a slight demand for land or construction. Chancellor Scholz emphasized, "To speed up the building permit and approval process, a better approval process is needed," adding, "Modernization and rationalization of procedural regulations are necessary to make quick, professional, and certain decisions." He explained, "Delays in building permit procedures often occur due to incomplete documents and document reviews," and "By unifying and standardizing the basic forms related to building plans, administrative costs and time can be reduced."

Germany formed a public-private joint "Alliance for Affordable Housing" led by the government last April, and after six months of intense discussions, announced the results on the 12th of last month.

Additionally, building-related procedures will be digitized to allow easy applications anytime and anywhere nationwide. Another key to accelerating construction speed is smart construction. The German government plans to actively promote BIM (Building Information Modeling). BIM is a convergence technology of 3D design and big data that utilizes and shares information generated from planning to design, construction, and maintenance stages. By reviewing errors and waste factors in design, construction, and maintenance in advance, it can maximize the productivity and safety of construction work.

Modular construction will also be promoted. This method involves pre-manufacturing materials and components in factories like blocks and assembling them on-site like Lego. Construction periods are short, and it is possible to build on small sites. Chancellor Scholz said, "Standardized formats are necessary for nationwide large-scale supply," and "The federal government is working on this."

Furthermore, local governments will establish public funds to stockpile land and register potential construction sites in a computerized network. The purpose is to promote and incentivize housing construction by transparently disclosing information about land and space.

The "Alliance for Affordable Housing" includes virtually all stakeholders directly or indirectly related to housing, such as the government, construction companies, labor unions, tenant organizations, and student groups. The photo shows representatives from various sectors participating in the alliance signing the agreement. Photo by [Photographer's Name]

In addition to new construction, plans to increase urban supply by remodeling existing housing were included. It facilitates the renovation and expansion of existing buildings and supports increasing the number of floors. Approval for attic construction is a representative example. Most old houses in Germany have attics under the roof, usually used as storage or left empty. By relaxing building regulations, these spaces can be extended and converted into housing. Chancellor Scholz emphasized, "Generally, this method can save resources and space and create cost-effective housing compared to new construction."

Tax reform and promotion of homeownership were also presented as major tasks. Chancellor Scholz said, "Tax incentives play an important role in supplying affordable housing," adding, "Income tax and real estate capital gains tax, in particular, play important roles." He also saw promoting homeownership among the middle class as contributing to alleviating housing insecurity. He said, "Individual homeownership guarantees a stable retirement and helps accumulate wealth," and "These goals can be promoted through encouraging savings, reducing debt, and lowering interest rates."

The announced measures are scheduled to be implemented by December 31, 2025. The activities of the Alliance for Affordable Housing will continue, with a meeting planned for December.

※This project was supported by the Press Promotion Fund created from government advertising fees.