The national administration embraces a plan to foster the development of environmentally-friendly dwellings.
"It's not just about more dwellings, but the right kind of dwellings," stated Housing Minister Klara Geywitz (SPD). This new initiative aims to motivate the construction of environmentally friendly and economical housing, avoiding excessive land consumption, all while helping to stabilize the construction sector. However, there's controversy surrounding the targeted nature of the funding and its potential impact on reducing rental prices.
From October onwards, builders and first-time buyers can secure subsidized loans of up to 100,000 euros per apartment under certain conditions. At launch, the interest rate for a 35-year loan with a 10-year fixed rate hovers around 2.0 percent. Also, loans with a 10-year term and a 10-year fixed rate will be up for grabs at an interest rate of approximately 1.0 percent. But, only modest apartments adhering to fundamental standards and devoid of luxurious features will qualify for funding. This is enforced through restrictions on maximum construction costs and floor space limits, leading to a cap on large four-bedroom apartments at 85 square meters. The federal government has no authority to dictate occupancy or cap rents for subsidized dwellings.
Another condition is adherence to climate-friendly construction, assessed by studying the emissions throughout the property's entire life cycle, including both construction and usage phases. This can be achieved through the deployment of sustainable construction materials, heating, lighting, and ventilation solutions. Beginning from January, projects showcasing exceptional climate-friendliness will be rewarded with an additional bonus subsidy and higher loan amounts.
The Housing Ministry estimates between 100,000 to 150,000 apartments or single-family homes might benefit from funding. This puts the new initiative in the spotlight as one of the most substantial current funding options for residential construction. Builders can also utilize an online calculation tool to ascertain if their project qualifies for financial assistance.
The new initiative, aimed at encouraging sustainable housing construction, is being spearheaded by The Union's Housing Ministry. This funding scheme, set to aid between 100,000 to 150,000 dwellings, is expected to position The Union at the forefront of substantial current residential construction funding.
