Around the middle of each month, the figures by which the traffic light coalition is measured come in. On Friday, they were particularly bad. The construction crisis continued to worsen in September. Since the beginning of the year, the number of permits for new apartments has totalled just 195,000, a decline of more than 28 percent compared to the previous year. The goal of the SPD, the Greens and the FDP that 400,000 new apartments should be built annually has receded into the distant future.

Julia Löhr

Business correspondent in Berlin.

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When there is hardly anything else that can be done, then an authority whose name only a few people know comes into play: The Federal Institute for Real Estate from Bonn, or BImA for short, watches over the federal real estate portfolio. For years, there have been calls for the authority, which reports to the Ministry of Finance, to administer less and to build more itself. This was already decided by the coalition of CDU/CSU and SPD at its housing summit in 2018.

And this is also stated in the coalition agreement of the traffic light coalition. The same applies to a demand paper of the Greens after the cabinet meeting at Meseberg Castle in August of this year. And at the housing summit at the end of September in the Chancellery, the BImA was also one of the 14 points in the agreed package of measures. The authority should sell more plots of land at a reduced price so that social housing can be built on them.

68 completed apartments

But to what extent can the authority really alleviate the housing shortage, which is particularly prevalent in metropolitan areas? Figures from the BImA give an idea: only to a very limited extent. After the 2018 Housing Summit, the number of completions initially rose only slowly. In 2020, BImA completed ten apartments, six the following year, 2022 in 76, and 68 this year.

A significant increase is planned for the coming year: "According to current planning, around 2024 apartments can be completed in 1000," a spokeswoman said on request. In the following years, this level is to be "consolidated". All in all, BImA's own areas offer the potential for the construction of 6000 to 8000 apartments.

Compared to the construction activity of previous years, this is a lot – but in relation to the number of missing apartments, it is rather little. At the beginning of the year, an alliance of associations estimated that there is a shortage of around 700,000 apartments in Germany. The Central Real Estate Committee (ZIA) predicts that there will be a shortage of up to 2027,830 apartments by 000. The Minister of Construction, Klara Geywitz (SPD), repeatedly refers to the so-called construction backlog – apartments that have already been approved but have not yet been built. This number is currently estimated at 850,000.

Project developers in need

However, due to higher interest rates and higher construction prices, also due to stricter government requirements for energy efficiency, many calculations are no longer tenable. Several large project developers have filed for insolvency in recent weeks, and construction sites are at a standstill. Home buyers don't know if their down payments are lost.

The BImA builds primarily for "housing welfare beneficiaries" – civil servants, judges, soldiers and other federal employees. If the authority sells plots of land from its holdings to municipal housing associations, the circle of those who profit increases. Between 2020 and 2022, it sold around 1790 hectares of land to municipalities. Often, these are former military properties on which not only individual buildings, but entire new districts are being built, as Chancellor Olaf Scholz (SPD) recently considers necessary again.

In Heidelberg, for example, the BImA is building a quarter on a site that used to be home to American armed forces. The land sold in the past three years will be used to initiate the construction of more than 8300,2000 apartments, 109,<> of which will be social housing. The reductions granted would have amounted to around EUR <> million.

However, one sentence in the authority's response also makes it clear that politicians should not place too much hope in the BImA for future housing summits: "From today's perspective, the potential has been exhausted with the housing plots already planned for sale or for self-construction," it says. At best, additional areas could still arise in isolated cases.