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Residential new-build housing in northern Germany
On 9th October, the Bundestag passed the so-called Bau-Turbo, a temporary amendment to Germany’s Building Code designed to accelerate housing construction. With the Pestel Institute calculating a shortage of 1.2 million homes in western Germany alone and construction economics in disarray, political pressure to act had become overwhelming. Federal Construction Minister Verena Hubertz (SPD) promised the new law would make “many things cheaper and faster,” enabling municipalities to approve projects within three months rather than endure years-long development procedures.
Yet as the CDU/CSU-SPD coalition voted the measure through, scepticism was widespread. Opposition parties, spatial researchers, industry representatives and municipalities themselves doubted whether regulatory tinkering could overcome broken project economics. The question for investors is blunt: can faster approvals create housing when the country’s largest landlords have stopped building?
What the Bau-Turbo does
The Bau-Turbo introduces a new Section 246e into the Building Code, valid until 31 December 2030 and requiring municipal opt-in. Municipalities choosing to apply it may designate building land within three months, deviate from existing development plans, interpret noise protection rules more flexibly, and permit “second-row” or rooftop construction to boost density.
Jan-Marco Luczak, construction policy spokesman for the CDU/CSU, described it as freeing municipalities “from the restrictive, time-consuming and cost-driving constraints of the Building Code.” Hubertz was more measured: “The construction turbo is not a lever we can pull and then apartments will fall from the sky.” She announced an “implementation laboratory” to guide municipalities through what she admitted was “uncharted territory.”
The Greens and the Left voted against, calling the law “empty promises” that lacked social-housing quotas or construction obligations. Left MP Katalin Gennburg warned it could “fuel land speculation” and weaken public participation in planning.
Industry response: cautious relief, major doubts
Developers and contractors welcomed the simplifications but questioned their real-world effect. Tim-Oliver Müller, CEO of the German Construction Industry Association, called it “a courageous law with sensible simplifications” but added pointedly: “The construction turbo must also ignite.” Faster permits, he said, don’t reduce costs or ease regulatory burdens.
At Expo REAL, where Aengevelt hosted a discussion titled “Housing markets: turbocharged recovery?”, panellists doubted municipalities would even use their new powers—or that other approval bodies would co-operate. Berlin’s finance senator Stefan Evers said the real breakthrough lay not in speed but coordination: “The spirit of this law has not yet reached the offices.”
Developers echoed that sentiment. Nyoo’s Stefan Dahlmanns questioned whether civil servants would make “bold decisions” that expose them to legal risk. LEG Immobilien’s Lars von Lackum was blunter: nobody would jeopardise “their pension” for a controversial project approval, he said.
That realism reflects market fundamentals. LEG, one of Germany’s largest residential landlords with 172,000 units, halted all new construction in 2022. “Nothing has changed in this regard,” said von Lackum. Axel Gedaschko, president of the GdW, reported that 70 percent of member companies have likewise stopped building. High costs and restrictive standards have made most projects unviable. “State subsidies have generally encouraged what was already too expensive,” he observed, pointing instead to regional examples such as the “Hamburg Standard” that permit simpler, cheaper, legally secure builds.
Will faster approvals change the math?
Critics warn that the Bau-Turbo will speed approvals for the wrong projects. With no social-housing quota and no build-out obligation, developers will pursue market-rate housing where profit is still possible, not affordability where it is needed.
Mathias Jehling of the Leibniz Institute for Ecological Spatial Development expects “urban sprawl in many smaller communities” rather than low-rent apartments in core cities. Without minimum thresholds for multi-family units - removed from early drafts - the law may trigger more single-family construction on cheaper peripheral plots. “Instead of affordable housing in the core cities, we may see beautiful new single-family homes being built on the outskirts,” he told Die Zeit.
Jehling warns of “doughnut villages with empty town centres” and of municipalities burdened by infrastructure expansion they can scarcely afford. Roads, utilities, schools and public services must follow the sprawl, while land sealing and higher emissions contradict climate targets. “We are saving administrative costs today, but in the long term it could become expensive,” he said.
Such concerns go beyond environmental policy. Germany already has around 750,000 approved but unbuilt apartments—proof that approval speed is not the main constraint. The deeper issue is that construction still doesn’t pay.
The test ahead
Hubertz’s ministry is launching webinars and “implementation laboratories” to guide local officials through the new process. Recent data show building permits up 30 percent year-on-year in July 2025, though from a very low base. The 131,800 permits issued in the first seven months remain far below the 400,000 annual target abandoned by the previous government.
For investors, the Bau-Turbo is a political gesture with uncertain commercial value. It may shorten planning timelines and modestly reduce soft costs in municipalities willing to act. But it cannot bridge the gap between cost and rent, nor revive halted development pipelines until financing, labour and regulation realign.
Dr Wulff Aengevelt called it “a sensible start,” stressing that only coordination among approval authorities and limits on vexatious lawsuits could make it work. As industry leader Müller concluded: “The construction turbo cannot be the sole saviour for more housing construction in Germany.”
Whether faster approvals matter when the economics don’t will define the next five years. By 2030, Germany will know whether its housing crisis was a planning problem - or an economics problem.