Funding pot for climate-friendly new builds is empty

Covenant - Funding pot for climate-friendly new builds is empty

The funding pot for the program for climate-friendly new builds is empty. Due to exhausted funds, no new applications for the program can be submitted to the state development bank KfW, as announced by the Federal Building Ministry in Berlin. The construction and housing industry has reacted with harsh criticism to the funding freeze and is demanding more clarity from the government with regard to the funding programs.

According to the ministry, more than 18,000 funding approvals have been granted under the program to date, funding around 46,000 climate-friendly housing units. "The demand for our new-build funding has exceeded our expectations. After just three months, the funding pot for climate-friendly new builds was almost empty, so we had to increase it to almost two billion euros," said Construction Minister Klara Geywitz (SPD).

New applications could be submitted as soon as the 2024 federal budget comes into force. On Wednesday, the coalition leaders reached an agreement in principle on how to plug the billion-euro gaps in the 2024 budget. The budget is expected to be passed by the Bundestag in January.

Industry warns of uncertainty

The Federal Association of German Housing and Real Estate Companies (GdW) has warned that the funding freeze will further exacerbate uncertainty among housing companies with regard to the affordability of affordable and climate-friendly housing. "The big question marks are leading to planning uncertainty for companies. They simply cannot plan their investments in housing construction and renovation, let alone implement them in the foreseeable future," explained President Axel Gedaschko. Clarity is needed "extremely quickly as to which programs will be retained or affected by cuts and to what extent".

Peter Hübner, President of the Federation of the German Construction Industry, said that by suspending funding for new builds, the federal government was proving that it had learned nothing from the mistakes of last year's funding freeze. "A run on subsidies at the end of the year is not a success. It shows the great uncertainty on the market. Nobody knows what will happen next and everyone is trying to secure the last scraps." According to Hübner, it is already a reality that every second company in the residential construction sector is suffering from a lack of orders and the housing shortage in Germany is growing from week to week.

"Nothing harms an investment sector like the construction industry more than unclear or constantly changing framework conditions," emphasized Felix Pakleppa, Managing Director of the German Construction Industry Association. The Federal Association of Independent Real Estate and Housing Companies (BFW) explained that the construction industry has been calling for support during the crisis for more than a year. However, there is no sign of reliability and planning security. "The loss of trust in politics could not be greater," said BFW President Dirk Salewski.

Criticism also comes from the opposition

The opposition also reacted with harsh criticism to the funding freeze announcement. Jan-Marco Luczak, construction policy spokesman for the CDU/CSU parliamentary group in the Bundestag, spoke of the biggest housing crisis in Germany for decades. "But instead of taking decisive countermeasures and breaking the downward spiral, the traffic lights are arguing and delaying important decisions to make building faster and cheaper. Now the funding for climate-friendly new builds is also being scrapped." This is a slap in the face for companies and private builders.

NRW Construction Minister Ina Scharrenbach expressed similar sentiments. Uncertainty is the enemy of investment, the CDU politician told the German Press Agency. "After the KfW funding chaos last year, this is the second major crash landing by the federal government." The government is damaging housing construction and energy efficiency. "The federal government's bumbling approach is exacerbating the housing crisis."

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1. The SPD's Construction Minister Klara Geywitz acknowledged that the demand for the funding program for climate-friendly new builds has surpassed expectations, leading to the near emptying of the KfW's funding pot.
2. The federal government and the Bundestag are currently working on finding solutions to plug the billion-euro gaps in the 2024 budget, which will allow for new applications for climate-friendly new builds.
3. Peter Hübner, President of the Federation of the German Construction Industry, criticized the federal government's decision to suspend funding for new builds, stating it further exacerbates uncertainty in the housing sector.
4. In Germany, the construction and housing industry is facing significant challenges, with almost every second company in the residential construction sector suffering from a lack of orders.
5. According to Axel Gedaschko, President of the Federal Association of German Housing and Real Estate Companies, the funding freeze for climate-friendly housing is leading to planning uncertainty and hindering companies from making investments in housing construction and renovation.
6. The KfW Banking Group, the state development bank responsible for disbursing funds for climate-friendly new builds, has granted more than 18,000 funding approvals, supporting around 46,000 climate-friendly housing units in Germany.
7. The opposition parties in the Bundestag have joined in the criticism, with Jan-Marco Luczak from the CDU/CSU parliamentary group stating that the federal government's actions are contributing to the ongoing housing crisis in Germany.

Source: www.stern.de