The feedback that the Association of the Southwest German Housing Industry (VdW Südwest) received from a member survey is clear: According to this, 70 percent of the housing companies in Hesse, Rhineland-Palatinate and Saarland want to postpone some new construction and modernization projects.

The reasons for this are diverse.

In an interview with the FAZ, association director Axel Thousandpound mentions uncertainties as a result of the federal subsidy policy, higher interest rates and, above all, the rising construction costs.

In May, for example, chipboard and reinforcing steel were more than 70 percent more expensive than a year earlier.

The premium for bitumen was 61 percent, and for cement it was still 19 percent.

And it is unlikely that they will return to pre-2020 levels.

Gunter Murr

Editor in the Rhein-Main-Zeitung.

  • Follow I follow

Several Hessian business associations have now presented proposals as to how the immense increase in construction costs could be slowed down, at least in part.

Politicians should no longer hinder the extraction of raw materials that are needed on construction sites, they say.

Not only is it becoming increasingly difficult to mine sand, gravel, basalt, limestone, natural stones or clay at all.

The disposal of construction waste also poses considerable difficulties for companies.

For example, the material from Hesse now has to be brought to North Rhine-Westphalia via the Rhine when the water level is low.

"This is going in the completely wrong direction in Hesse," said Thomas Reimann, Vice President of the Association of Hessian Entrepreneurs' Associations (VhU).

In view of the state elections next year, he and other representatives of the business associations also called for new landfill sites for construction waste to be designated and the recycling of excavated earth to be made easier at a press conference on Monday.

consequences of war

According to Reimann, around 50 million tons of mineral raw materials are needed in Hessen every year.

Only 35 million would also be won in the country.

Much more is possible if politics does not prevent this.

Supply is particularly difficult in view of the war in Ukraine.

At the moment, five million tons of raw materials, which have been imported from Ukraine and Russia, are missing.

Quarries and pits contribute to nature conservation, say stakeholders.

This is because the areas would only be used temporarily and would be recultivated once mining was complete.

In the meantime, endangered animal and plant species are being offered a dynamic habitat that is becoming increasingly rare to find in nature.

The nature conservation value of the areas often even increases.

Regional planning must ensure that the deposits of raw materials are secure in the long term.

Municipalities should be given incentives to enable the general public to mine raw materials in their districts.

Criticism of Bannwald law

Clear criticism is leveled at a law passed in the state parliament in February, which largely excludes the extraction of sand and gravel in protected forests.

This endangers the secure supply of sand and gravel in the greater Frankfurt area.

Longer transport routes for raw materials would contradict housing policy and climate protection goals.

Incidentally, the extraction of raw materials only affects 0.5 percent of the protected forest area.

According to the associations, earthwork caused the greatest increase in the costs of construction services.

They have increased by 62 percent in Hesse since 2015.

In the coalition agreement concluded in 2013, the CDU and the Greens announced that they would tackle the bottleneck in landfill capacity in order to create new capacity for the disposal of building rubble and excavated earth.

In the meantime, however, only an expert opinion had been commissioned.

The development of new deposits for the companies involves a risk that is difficult to calculate.

Approval procedures lasted up to 15 years.

In order to shorten the time, more staff is needed in the regional councils.

Reliable funding rules desired

The business associations are concerned with limiting the costs of all construction projects, i.e. housing, roads, railways and bridges.

The effects of the price increases are currently particularly serious on residential construction, which is subject to further strains.

Thousand pounds from VdW Südwest mentions the federal government's funding policy for energy-saving new buildings and energy-efficient renovation as a further problem.

He complains that there is a great deal of uncertainty in the industry, that more reliability is needed.

Only at the end of July did the federal government change the funding rules at short notice.

The funding rate for the energetic renovation of the existing building was reduced, and new construction is almost no longer funded.

There had already been massive criticism at the beginning of the year because funds from the KfW development bank were no longer available at short notice.

The VdW Südwest does the math: A year ago, a housing association came up with a cold rent of 10.62 euros per square meter for a typical apartment building with 24 apartments.

The increase in construction costs since then alone means that the rent is now 29 percent higher at EUR 13.62 – with the same return.

If you also take into account the increased financing costs, the calculated rent is 16.87 euros. "The market no longer accepts that," says Thousand Pounds.

While 12,441 apartments were approved in Hesse in the first half of 2021, there were only 11,205 in the first six months of this year - a decrease of around ten percent.

The goal is to build more.

"300,000 additional apartments will be needed by 2040 in the Rhine-Main metropolitan area alone",

said VhU Vice Reimann.

"The common goal of politics and business should be to counteract the drastically increased construction costs."