Germany’s New Building Law: Addressing the Housing Shortage | 2025 Update

The German Bundestag passed a controversial building acceleration package in October 2025, introducing a temporary clause – Paragraph 246e of the Baugesetzbuch (BauGB) – designed to ease the country’s housing shortage. The “Bauturbo,” as it’s become known, aims to streamline planning processes and increase housing supply, particularly in areas experiencing rapid population growth.

Germany faces a significant housing deficit. According to recent estimates from the Pestel Institute, approximately 1.4 million housing units are lacking nationwide, with West Germany alone accounting for 1.2 million of that shortfall. This scarcity is particularly acute in major metropolitan areas and regions attracting new residents.

The core of the Bauturbo legislation is the experimental clause, valid until December 31, 2030. This allows municipalities to deviate from standard planning regulations to expedite building projects. Federal Building Minister Verena Hubertz (SPD) described the measure as a “courageous instrument” needed to address the housing crisis, stating that the goal is to reduce the time required for building plan approvals from five years to as little as three months in some cases.

The new law facilitates both the expansion of existing structures and the construction of new buildings. It eases restrictions on building in secondary locations and allows for more flexible interpretation of noise protection regulations, particularly in mixed-use areas. The legislation also simplifies the process of adding floors to commercial buildings and supermarkets, unlocking additional space for potential residential use.

While the governing coalition of CDU/CSU and SPD championed the Bauturbo, the opposition parties – the Greens and the Left – voiced strong concerns. Critics argue that the relaxed regulations could encourage land speculation and drive up land prices. They also warn of potential uncontrolled urban sprawl and increased infrastructure costs. Representatives from these parties have called for stricter rent controls and a more sustainable approach to urban development.

The legislation’s impact hinges on the willingness of individual municipalities to adopt the experimental clause. Minister Hubertz emphasized that the decision to accelerate building processes rests with local authorities. The VDIV, a German association of engineers, welcomed the Bauturbo as a necessary step to stimulate construction activity, but acknowledged the challenges it presents for both builders and local administrations.

The changes to the Baugesetzbuch also include modifications to individual paragraphs, aiming to provide greater flexibility in land allocation, building extensions, and urban densification. However, the long-term effects of these changes, and the extent to which they will alleviate the housing shortage, remain to be seen.