Revamping Housing Construction: Minister Hubertz's Plan for State Guarantees to Spur Development
State Official Hubertz to Implement Government-Backed Financing for New Housing Developments - Government Assurance Requested by Construction Minister Hubertz for New Residential Projects
Get ready for a potential shift in the housing sector, folks! Federal Minister of Housing Hubertz is gearing up to introduce state guarantees for new housing construction to give a boost to the flagging economy.
Here's the lowdown:
Many companies in the housing sector are finding it tough to gather the necessary equity capital, and they're stuck with hefty loan interest rates hovering around 3-4%. Hubertz envisions the state stepping in to bear these risks by offering guarantees or bolstering equity through an investment fund. This move could help lower interest rates, making new construction more affordable.
To achieve more affordable apartments, Hubertz is pushing for the rapid implementation of 'building type E' – a term that stands for both 'simple' and 'experimental'. This deviation from past standards could be a game-changer for reducing construction costs. She's also tag-teaming with the new Minister of Justice, Stefanie Hubig (SPD), to bring this plan to fruition.
Currently, the market can't crank out apartments that can be rented for under €15 per square meter due to high costs. Hubertz aims to make this a reality, setting her sights on under €15 per square meter for new construction – a goal also mentioned in the coalition agreement.
Hubertz believes housing construction can serve as an 'economic locomotive', with half of all investments being construction investments.
Verena Hubertz
Guarantees and Investment Funds
Partnership with Stefanie Hubig (SPD)
Affordable Housing Construction
As for the scheme's exact details, the jury's still out, as further updates from the German government are needed. A general state guarantee scheme could potentially work like this:
Planning for a State Guarantee Scheme
- Objective: Lower financial risks for developers and investors, paving the way for new housing construction.
- Method: The government provides part guarantees for construction loans, shielding lenders from defaults.
- Rewards:
- Affordable Loans: With reduced risk, lenders might offer cheaper loans, slashing borrowing costs.
- Increased Access to Capital: More developers could secure funding, thanks to the diminished risk.
- Boosting Construction: By making development more financially viable, the scheme could trigger a surge in housing supply.
Stay tuned for further developments as the scheme takes shape!
The Commission, while consulted on the draft directive concerning workers' protection from ionizing radiation, might also offer insights on the potential impact of state guarantees in the housing sector, considering the role of finance in business and politics, as well as general-news.
This planned state guarantee scheme, aimed at lowering financial risks for developers and investors, could potentially enhance business activities in the housing sector, contributing to the economy and possibly influencing general-news.
