The Liberale Immobilienrunde e. V. (LIR) welcomes the German Government’s initiative to reduce construction costs in Germany through the new ‘Building Type E’ Act. However, in the LIR’s view, the draft bill as presented does not go far enough. Instead of a fundamental simplification of the construction process, there is a risk of additional documentation requirements, new liability risks and persistently high construction costs.
The Federal Government is promising savings of ten to 15 per cent on construction costs with the ‘Gebäudetyp E’ scheme. This is to be achieved, in particular, by allowing contractors to contractually waive certain comfort standards.
“Fewer sockets and doing without towel radiators will not solve the housing crisis in Germany. We must finally tackle the real cost drivers: excessive technical requirements, complex planning permission procedures and ever-increasing local authority regulations,” explains Petra Müller, former Member of the Bundestag and Chair of the Board of the Liberale Immobilienrunde e. V. (LIR).
Legal certainty instead of additional bureaucracy
The LIR is particularly critical of the lack of legal clarity. If developers and construction firms are required in future to document in detail which technical standards they are deviating from and what savings this results in, there is a risk of a considerable additional bureaucratic burden.
Added to this is the unresolved question of the extent to which reduced comfort standards will remain legally valid vis-à-vis future tenants.
“A law intended to simplify construction must not lead to more complicated contracts and new liability risks. We need clear statutory minimum standards that building owners, planners, contractors and tenants alike can rely on,” says Müller.
The actual cost drivers remain untouched
The Liberal Property Group is therefore calling for the reform to be much more comprehensive. In addition to reviewing technical standards, energy efficiency requirements, special local authority stipulations, infrastructure costs and compensation obligations under nature conservation law must, in particular, be assessed for their economic impact.
Safety, health protection and necessary quality standards must not be compromised in the process. However, it must be possible to dispense with non-essential comfort requirements without creating new legal uncertainties.
Building Type E must become a genuine reform project
The LIR calls on the Federal Government to use the ongoing legislative process to fundamentally simplify the building process.
This includes, in particular:
• clear and, as far as possible, uniform minimum standards across Germany for cost-effective construction
• legally secure exemptions from technical standards that are not safety-related
• clear safeguards under tenancy law for agreed building standards
• the removal of unnecessary documentation and evidence requirements
• a critical review of cost-driving public-law requirements
“Germany does not need a new name for construction that remains expensive. Germany needs the political courage to actually simplify standards. Affordable housing is not created by an ever-increasing number of regulations, but by construction projects that are economically viable,” Müller concludes.
