Düsseldorf – Mike Kammann, CEO of Bausparkasse Schwäbisch Hall, has identified the core issue hindering Germany’s housing market: not a lack of demand, but a significant deficit in the effective implementation of construction projects. With over 760,000 housing units approved but yet to be completed by the end of 2025, Kammann argues that the focus must shift from policy creation to streamlining the construction process itself. He advocates for faster new housing development through a combination of new construction and the modernization of existing stock, emphasizing that Germany faces a deficit of approximately 1.4 million homes.

The Paradox of Approved but Unfinished Homes

The stark reality of Germany’s housing shortage is underscored by a paradox: a substantial number of housing units have received official approval, yet they remain incomplete. This situation suggests that the hurdles lie not in the initial planning stages or market desire, but in the subsequent execution phases. Kammann, who has led Bausparkasse Schwäbisch Hall since 2024 and oversees areas such as corporate development and financial controlling, points to initiatives like the "Wohnungsbauturbo" (housing construction turbo), "Gebäudetyp E" (Building Type E), and a reorientation of the funding landscape as crucial steps. However, he stresses that these policies require a corresponding acceleration in planning, approval, and construction processes. The integration of digital solutions and increased efficiency are paramount to unlocking the potential of these approved projects.

A Call for Streamlined Processes and Practical Support

Kammann’s diagnosis highlights a critical need for practical, on-the-ground improvements. He argues that policies must translate into tangible progress, with planning, permitting, and building procedures becoming simpler, more digital, and significantly faster. The current timeline, where it takes an average of three years for new housing to emerge from reforms, is too protracted. This lengthy gestation period exacerbates the housing shortage and hinders economic development.

Furthermore, Kammann emphasizes the importance of accessible and economically viable support for the energetic modernization of existing buildings. He suggests that funding programs should aim to facilitate broad-based investments rather than exclusively promoting the highest efficiency standards. This inclusive approach would enable a wider range of property owners to undertake essential upgrades, contributing to both energy efficiency goals and the overall housing stock.

Background: The German Housing Market in Flux

Germany’s housing market has been under considerable pressure for years, driven by a combination of factors including population growth, increased household formation, and sustained demand, particularly in urban centers. The federal government has repeatedly set ambitious housing construction targets, aiming to alleviate the shortage and make housing more affordable. However, these targets have consistently been missed.

Several government initiatives have been introduced over the past decade to stimulate construction. These include streamlining building regulations, offering financial incentives for affordable housing, and promoting sustainable building practices. The "Gebäudetyp E," for instance, is designed to simplify and accelerate the construction of standard residential buildings. Similarly, the "Wohnungsbauturbo" initiative aims to identify and remove bureaucratic obstacles in the planning and approval process.

Despite these efforts, the construction sector faces numerous challenges. These include rising material costs, a shortage of skilled labor, complex zoning laws, and lengthy approval procedures that can delay projects for months or even years. Environmental regulations, while necessary, can also add layers of complexity and cost to construction projects.

The COVID-19 pandemic and subsequent supply chain disruptions further complicated the situation, leading to increased costs and longer lead times for essential building materials. Geopolitical events, such as the war in Ukraine, have also contributed to economic uncertainty and increased energy prices, impacting the viability of new construction projects.

Timeline of Challenges and Initiatives

• Pre-2020s: Persistent housing shortages in major German cities, coupled with a steady increase in construction costs and a growing awareness of the need for modernization. Early government efforts focused on setting targets and introducing some regulatory reforms.
• 2020-2021: The onset of the COVID-19 pandemic leads to initial disruptions in the construction sector, followed by supply chain issues and rising material prices.
• 2022: The Russian invasion of Ukraine significantly impacts energy prices and further exacerbates supply chain problems, creating a challenging environment for the construction industry. Government discussions intensify around new measures to boost housing construction.
• 2023: The German government introduces or reinforces initiatives such as "Wohnungsbauturbo" and "Gebäudetyp E" with the aim of speeding up approvals and simplifying construction. Debates around the reform of energy efficiency standards for buildings also gain prominence.
• 2024: Mike Kammann assumes his role as CEO of Bausparkasse Schwäbisch Hall, articulating his perspective on the implementation challenges. The number of approved but unfinished housing units remains a significant concern.

Data Supporting the Implementation Gap

The figures cited by Kammann paint a clear picture of the implementation gap:

• Housing Deficit: Germany requires approximately 1.4 million new housing units to meet current demand. This figure accounts for population growth, new household formations, and the need to replace older, less efficient stock.
• Approved but Unfinished Units: Over 760,000 housing units had received approval by the end of 2025 but had not yet reached completion. This represents a substantial backlog of projects that are technically sanctioned but stalled in the execution phase.
• Average Project Duration: The average time from the initiation of a reform or policy change to the actual completion of new housing units is estimated to be around three years. This lengthy timeframe highlights the bureaucratic inertia within the system.

These statistics underscore that the bottleneck is not a lack of market signals or official permits, but the practical realities of bringing a construction project to fruition. The reasons for this delay can be multifaceted, including:

• Bureaucratic Hurdles: Complex and time-consuming approval processes at federal, state, and local levels.
• Skilled Labor Shortage: A critical lack of qualified tradespeople across various construction disciplines.
• Supply Chain Issues: Persistent challenges in sourcing materials, leading to delays and increased costs.
• Financing Difficulties: While Bausparkasse Schwäbisch Hall is a major player, accessing affordable financing can still be a challenge for smaller developers or for projects requiring significant upfront investment.
• Planning Uncertainty: Evolving regulations and lengthy consultation periods can create uncertainty for developers, leading to project postponements.

Broader Implications for the German Economy and Society

The persistent housing shortage and the inefficiencies in construction have far-reaching consequences for Germany:

• Economic Impact: A strained housing market can hinder economic growth by making it difficult for businesses to attract and retain talent, particularly in high-cost urban areas. The construction sector itself is a significant employer, and a lack of consistent project flow can lead to instability.
• Social Impact: The inability to meet housing demand contributes to rising rents and property prices, making it increasingly difficult for middle- and lower-income households to find affordable housing. This can lead to social stratification and increased pressure on social welfare systems.
• Regional Disparities: The housing crisis is often more acute in dynamic economic regions, leading to outward migration from these areas and potential depopulation in less economically vibrant regions.
• Environmental Goals: While modernization is encouraged, a slower pace of new construction, especially of energy-efficient buildings, can impede Germany’s progress towards its climate goals.

Expert Analysis and Future Outlook

Kammann’s assertion that "implementation" is the key bottleneck resonates with many observers of the German construction sector. Industry associations have consistently called for deregulation and digitalization to accelerate processes. The challenge lies in translating these calls into concrete action across different administrative levels.

The "Gebäudetyp E" initiative, which aims to standardize and simplify the construction of certain types of buildings, holds promise. However, its success will depend on how effectively it is adopted and implemented by local building authorities. Similarly, the effectiveness of funding programs for modernization hinges on their accessibility and their ability to provide meaningful financial relief to property owners.

Looking ahead, the German housing market will likely remain under pressure. Addressing the implementation gap requires a concerted effort from policymakers, regulators, industry stakeholders, and financial institutions. A focus on digitalizing planning and approval processes, investing in vocational training to address the skilled labor shortage, and creating more flexible and efficient funding mechanisms will be crucial. Without significant improvements in the execution of construction projects, Germany risks falling further behind in its goal of providing adequate and affordable housing for its citizens. The words of Mike Kammann serve as a stark reminder that policy alone is insufficient; effective action on the ground is what will ultimately build the homes Germany needs.