Berlin's Housing Construction Targets for 2025 Fall Short

The housing situation in Berlin remains tense as the city is projected to significantly miss its housing construction target for 2025. According to Bausenator Christian Gaebler, the number of new homes completed this year may be lower than in previous years, with estimates suggesting around 15,000 units may be finalized. The exact number, however, remains uncertain due to various influencing factors, including whether several large-scale projects will be fully completed in the current year.

Gaebler expressed hope that the final results for 2024 would not greatly deviate from last year's performance, although the final numbers for that year are still pending. Early projections for 2024 anticipated approximately 15,000 new units, a decrease from 17,300 and 16,000 in the preceding years.

The coalition agreement between the CDU and SPD had set an ambitious goal of constructing up to 20,000 new homes annually in light of the ongoing housing shortage. However, it seems likely that this target will also be unmet for 2025. Despite this, Gaebler views the overall progress in housing construction as a positive sign, noting that nearly 50,000 new homes have been completed over the past three years, providing accommodation for around 100,000 individuals.

He acknowledged the public's frustration with the pace of development, stating that while it is reasonable to expect more, it is also important to recognize the substantial progress made. He emphasized that the completion of 50,000 new homes is a significant achievement.

Challenges in the construction sector have compounded the situation, with rising costs and a shortage of materials and skilled labor making it increasingly difficult for developers to initiate new projects. A key indicator of this trend is the decline in building permits, which dropped from approximately 15,900 to 9,800 in the previous year, marking a 38.5% decrease. Meanwhile, the backlog of approved but unstarted projects remains high, with nearly 59,000 units awaiting construction.

In response to these challenges, the Berlin government is contemplating a more active role for municipal housing companies in addressing the housing shortfall. Gaebler indicated that discussions are ongoing with these entities regarding their construction plans, known as the 'Roadmap,' which aims to enhance their output. The six municipal companies--Degewo, Gesobau, Gewobag, Stadt und Land, Howoge, and WBM--are expected to deliver around 12,000 units in 2025 and 2026, with an additional 3,500 units planned for 2027.

Furthermore, Gaebler highlighted that efforts are underway to collaborate with private investors to initiate additional projects. He also mentioned the need to explore financial support options beyond current housing funding mechanisms to facilitate this growth.

While acknowledging the current market conditions that are inflating construction costs to levels that are untenable for rental purposes, Gaebler noted that the government is actively seeking ways to reduce expenses. Simplifying administrative and approval processes and reconsidering certain technical standards and regulations are among the strategies being discussed to expedite construction.

As the city grapples with these complex challenges, the focus remains on finding effective solutions to meet the growing demand for affordable housing in Berlin.