The construction turbo is coming in Germany! Draft law to accelerate residential construction and provide housing

On a positive note, it should be emphasized that there will be significantly fewer hurdles for residential construction projects once the new law has been passed. The draft law provides for generous exemption and deviation options from existing planning law, as long as they serve the purpose of residential construction. Accordingly, the draft law allows liberal exemptions from the provisions of the development plan and from blending in with the immediate surroundings, even beyond individual cases, while generally observing the traditional planning law structure. In addition, the draft law provides for an even more far-reaching possibility to push back planning law, insofar as this serves the purpose of housing construction and is done with the consent of the municipality. This clause is to be introduced as an experimental clause and will therefore initially be in place for a limited period of approximately 5 years.

The key element of the draft law is the provision which states that the approval of a project may, with the consent of the municipality

“deviate from the provisions of this Code [BauGB] or the provisions issued on the basis of this Code [in particular the BauNVO and development plans] to the extent necessary if the deviation is compatible with public interests, taking into account neighbouring interests, and serves one of the following projects:

• the construction of buildings for residential purposes;
• the extension, alteration or renovation of permitted buildings if this creates new apartments or makes existing living space usable again;
• the change of use of permitted buildings for residential purposes, including any necessary alteration or renovation.”

We appreciate that the so-called “construction turbo” or “housing construction turbo” has been designed to be far-reaching and therefore covers a wide range of projects. It not only applies to new construction projects, but also deliberately includes alterations and changes of use. The latter option of simplified change of use offers great potential, particularly for the conversion of commercial space into residential space (Reimagining Real Estate: Repurposing in Germany). New construction projects are likely to benefit above all in redensification situations. The application of this new provision will also mean that larger buildings can be constructed as it will be possible to exceed the framework of permissible building sizes set by an existing development plan or by the “integration requirement” in unplanned inner areas.

It is also to be welcomed that the initial restriction to new construction projects “with at least six apartments” has been dropped and that the provision is therefore likely to benefit all residential construction projects.

The “outdoor area” under planning law will also be carefully opened up for residential use by allowing only those projects that represent a further development of existing buildings. It is to be noted that the provision only exempts from building law, not from nature conservation law, which is of particular importance in outdoor areas.

Nevertheless, it must be taken into account that the approval under this key new provision  is subject to certain restrictions: Firstly, the deviation must be “necessary” in terms of scope. This wording obliges the competent authorities to examine the proportionality of the accelerated and simplified procedure in each individual case. Secondly, the project must be “compatible with public interests, taking into account neighbouring interests”. With regard to the case of change of use, the reasoning of the draft law highlights healthy living conditions and ensuring the mobility of residents through appropriate infrastructure as relevant public interests. Public interests are also to prevent a deviation in accordance with the planned provision if the project is likely to cause “additional significant environmental impacts” according to the result of “a rough assessment”; in some cases, an environmental impact assessment will still be required for larger projects in outdoor areas. These requirements are mandatory under EU law and cannot be modified by the German legislator.

Another relevant restriction is the requirement for the municipality's consent. Obtaining this consent is necessary to ensure that this new provision does not undermine municipal planning sovereignty. If the municipality considers the project to be incompatible with its ideas of urban development and order, it has a right of veto that cannot be replaced by the building supervisory authority. The municipality can attach conditions to its approval, which is in particular likely to play a role in cases where the preparation of a development plan is no longer required, but the municipality still has an interest in the implementation of its building land models with mandatory quotas for “social housing” or the bearing of follow-up costs. The draft law also provides for a presumption of consent, which generally occurs after two months, to ensure rapid processing of consent requests by the municipality. This period is extended by a maximum of one month if the public is involved.

The construction turbo provision is initially to be introduced as a so-called “experimental clause” until the end of 2030. As is common practice in such clauses, an evaluation will be carried out one year before it expires; this could result in an extension of the period of validity.

The German government is anticipating between 18,000 and 74,000 applications per year for the construction turbo provision. This means that one in four construction projects could benefit from this new regulation. It is also expected that 70% of applications will relate to unplanned areas and 30% to development plan areas.

So far, it is known that the first reading of the draft law is planned before the summer break and that the law should be passed by the German parliament (Bundestag) by the autumn of  2025. The approval of the German Federal Council (Bundesrat) is not required, meaning that the amendment can be expected to enter into force quickly afterwards.

Authored by Sabine Adams, Carolin Bartz, and Damian Sternberg.