One cannot say that the times were kind to Klara Geywitz.

For almost fourteen months, the social democrat has headed the Federal Building Ministry, which was re-established as an independent department within the cabinet for the first time in twenty years.

The traffic light coalition wanted to emphasize the importance of creating housing.

It was propagated ad nauseam that 400,000 apartments should be built each year, 100,000 of them social housing.

But then a double whammy finally destroyed the already overambitious plans: the inflation-driven change in monetary policy by the central banks caused construction interest to quadruple.

And the outbreak of the Ukraine war caused the prices for building materials to skyrocket once again.

Matthew Alexander

Deputy head of department in the features section.

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While Klara Geywitz defiantly insisted on her target until December, the market reacted to the changed framework conditions at the new German pace.

New construction projects were canceled en masse.

The actors had little choice: if housing companies didn't want to pay more, they would now have to rent out their new buildings for twenty euros a month.

This is not politically communicable, at least for public sector companies;

and it overwhelms most prospective tenants financially.

For this reason, the municipal Frankfurt housing group ABG Holding has stopped all projects whose construction has not yet started.

And Vonovia even sees itself forced to sell 67,000 apartments because the interest burden has become overwhelming for the largest private housing group.

Responsibility without competencies

The development is even more dramatic for developers who sell their houses and apartments to private individuals. The banks refuse them the loans they need to pre-finance the projects.

The financial institutions do not do this haphazardly, but because the property developers cannot provide any reliable information as to how high the construction costs will be in the end and whether they can meet the completion dates given the lack of craftsmen and materials.

The banks are now also taking a closer look at potential buyers: the requirements for the amount of equity and creditworthiness have increased significantly when granting real estate loans.

It has long since hit the well-earning middle class: The Darmstadt member of the state parliament, Björn Kaffenberger, a party friend of Geywitz, reported in the summer that he had given up his long-cherished dream of owning his own home within a short time.

Even in the case of young civil servants who want to operate with a little less than twenty percent equity, banks are now giving the thumbs down.

It's no wonder that the promised 400,000 new homes per year are nowhere near the goal.

Final figures are not yet available for 2022, but it is expected that it will not even be 300,000.

A further decline to around 200,000 apartments is to be expected for this year.

The number of between 700,000 and 1.9 million apartments that are already missing, depending on how you calculate them, will continue to rise.

In view of this development, the question arises as to whether it was a good idea on the part of Chancellor Olaf Scholz to put the building department in the spotlight and to ostentatiously assume responsibility in an area where the influence of the federal government is limited.

But Geywitz is not easily discouraged.

She has now expressed the hope that the magic mark will be reached in 2025, i.e. in the election year.

Where she gets her optimism from is her secret.

It is unlikely that a turnaround in interest rates would help by then; according to the most recent statements by ECB President Christine Lagarde, the opposite is more likely.