Construction crisis in Aichach-Friedberg: municipalities are fighting for investments!

Construction crisis in Aichach-Friedberg: municipalities are fighting for investments!

Construction activity in Bavaria faces major challenges. Especially in the municipalities of Aichach and Friedberg it is clear that the brisk construction activity that we have experienced in recent years has slowed down significantly. However, a look at the latest reports shows that the municipalities do not want to remain idle despite the current construction crisis. According to the Augsburger Allgemeine The sale of building plots is taking place more slowly than before. There are hardly any new projects in the pipeline in the public sector, which forces those responsible to focus intensively on financing ongoing projects.

Rising construction costs – a burden for communities

A central problem is the exploding costs in construction. These not only have a negative impact on current projects, most of which date back to times before the pandemic and the war in Ukraine, but are also putting a strain on the municipalities' coffers. Many of the municipalities in the district have difficulty covering ongoing costs. Here it is important to make countercyclical investments in order to stimulate the economy and increase the quality of life in the places. Projects such as the redesign of town centers and the construction of community centers are crucial for community support. But the constantly dwindling financial resources make it difficult to realize these projects.

Subsidized housing construction is stagnating and the funding pools are insufficiently filled. Given the increasing demand for affordable housing, it is becoming increasingly clear that it takes more than just subsidies to tackle the problem. The Haufe reports that new construction costs have almost doubled since 2020, while the need for social housing continues to increase. The municipal and cooperative housing companies responsible for this area are faced with the challenge of being unable to meet the increased demand for housing.

Prospects for housing construction in Germany

In order to overcome the crisis, Germany urgently needs new approaches. The ZDF reports an alarming decline in the number of new apartments. In 2024, with 251,900 completions, 14.4 percent less living space was created than in the previous year. The Minister of Construction, Verena Hubertz, is pushing to simplify the approval process and reduce construction costs - measures that seem long overdue. The average construction costs in major German cities rose by almost 50 percent to over 4,400 euros per square meter between 2020 and 2024.

The traffic light government has targeted a new construction quota of 400,000 apartments per year for 2024. However, given the current situation and the real numbers, this is a challenging goal. Without necessary improvements in funding conditions and tax incentives, the construction industry will continue to be under pressure.

Subsidized housing construction in Bavarian municipalities could benefit from a so-called amendment to building law, which promises, among other things, faster approval and simplifications in building regulations. Ultimately, it remains to be seen how those responsible will tackle the existing challenges and whether they show a good knack for future-oriented solutions. This is the only way to contain social discontent, which is seen as a threat to our democracy.