Germany’s property sector is pushing for a radical overhaul of building regulations to address soaring construction costs, potentially creating a two-tiered housing system and sparking debate over tenant rights. A consortium of industry associations, spearheaded by the GdW (Federal Association of German Housing and Real Estate Companies), is preparing to present a draft bill outlining a “cost-optimized basic living standard” to the Berlin government.
The proposal, detailed in a report by “Welt”, envisions a legally enshrined minimum standard focusing on functional and economical housing, significantly reducing building costs. This “basic living standard” would define essential requirements for heating, insulation, water and electricity supply, sanitation and soundproofing, codified within the Civil Code (BGB) and supported by implementing regulations.
GdW President Axel Gedaschko emphasized the core objective: not to amend exceptional cases of high standards, but to establish a lower, more affordable baseline as the default legal benchmark. The GdW, representing roughly 3,000 housing companies managing six million units, argues the current trajectory of construction costs is unsustainable, particularly for affordable housing projects.
The industry’s initiative contrasts sharply with the government’s ongoing efforts, spearheaded by Building Minister Verena Hubertz and Justice Minister Stefanie Hubig (both SPD), towards a “Building Type E” framework. This government plan, currently slated for legislation in late 2026, aims to limit liability related to deviations from recognized technical rules, effectively complicating legal challenges from tenants and buyers regarding lower quality standards.
The property associations view the government’s timeline as unduly protracted and lacking sufficient certainty. Gedaschko criticizes the existing proposals as “complicated, lengthy and ultimately prone to legal dispute”. The industry’s rapid push for a new standard raises critical questions about the potential for a divergence in housing quality, potentially creating a system where higher-end developments adhere to stringent standards while others operate under the new, more basic baseline.
Critics are likely to scrutinize the proposal’s potential impact on tenant rights and the overall quality of the German housing stock. While the industry maintains the move is essential for addressing affordability, concerns remain that it could erode consumer protection and normalize lower construction standards, ultimately impacting the living conditions of millions of Germans. The imminent presentation to the government and ruling coalition will undoubtedly trigger a contentious debate about the future of affordable housing and the balance between economic viability and social responsibility in the German construction sector.
