With the new German government barely in office, it has already become quite obvious what one of the most pressing issues will be during the parliamentary term now under way. On 14 March, Angela Merkel took her oath of office as German Chancellor, and the very next day, the Federal Statistical Office published the number of planning permissions approved in 2017.1 According to the stats, the number of approvals in the Federal Republic dropped by 7.3 percent or 27,260 flats. Given the existing housing shortage, it is an alarming trend.
The year-on-year decline in the number of new-build flats in 2017 was noted across building types. It affected detached and semi-detached homes as much as multi-family dwellings and halls of residence. The slowdown in building activity was particularly conspicuous in the infill densification segment. Construction measures in available buildings were approved for only 42,137 new flats — implying a one-year drop by 19.5 percent. Equally alarming is the fact that the total number of flats approved (348,128) falls short even of the annual completions rate of 350,000 flats that the Federal Government considers necessary. Since the number of flats actually completed invariably lags behind the number of permits issued, the gap is actually larger yet.
On its very first day in office, the Grand Coalition must therefore have realised that its work as government should focus not least on housing construction from the start. Christian Democrats and Social Democrats did specify in their coalition agreement that they would ensure the development of 1.5 million new flats between now and the end of 2021, and that they intended to launch a housing construction campaign. In his first ministerial statement, the new Federal Minister of the Interior, Horst Seehofer, who is also responsible for construction, moreover announced his intention to make housing construction one of his priorities.2
Number of Planning Permits Drops even in Berlin
Even in Berlin, one of Germany's most strained housing markets, the number of approved flats has declined. The total of 24,743 flats approved in 2017 implies a decline by 1.2 percent year on year.3 In Berlin, the decrease in the number of permits is due specifically to the steep drop in infill densification activities. The number of construction measures approved for existing buildings went down by 19.4 percent in 2017. The things is that metropolises like Berlin need infill densification more than most other cities as a good way to get on top of the housing shortage. However, with its tightened regulations, the Senate actually hampered infill densification programs in some ways.4It is not least because of this that the housing policy has become subject to controversy within Berlin’s state government of Social Democrats, Left Party and Greens. Berlin’s Governing Mayor, the Social Democrat Michael Müller, has shown his displeasure over the work done by the Senator for Urban Development, Katrin Lompscher of the Left Party, and intends to collaborate with the housing industry more than the Senator has done so far.5