The German federal government has unveiled plans to introduce Building Type E, a new simplified construction standard designed to make housing more affordable by eliminating unnecessary requirements and reducing building costs. The letter 'E' stands for 'einfach,' meaning 'simple' in German, representing a fundamental shift toward streamlined construction practices.
Two Social Democratic Party (SPD) ministers, Verena Hubertz (Housing, Urban Development and Construction) and Stefanie Hubig (Justice and Consumer Protection), presented the initial framework for Building Type E along with a model contract in Berlin on Thursday. The initiative aims to address Germany's housing shortage by focusing on essential elements: compact floor plans, robust materials, and eliminating expensive add-ons that drive up construction costs.
Minister Hubertz emphasized the new approach would concentrate on what's truly necessary, citing pilot projects that demonstrate significant potential savings. These projects featured window ventilation instead of complex systems, less massive walls, and serial construction with streamlined designs. Hamburg successfully achieved approximately 30 percent savings in construction costs using lower standards, highlighting how Germany's current building requirements may be excessively high.
Building Type E is not intended as a fixed building class but rather as an opportunity to deviate from today's usual and very high building standards that drive up costs and construction time. According to the framework document, the building type should apply to both new construction and existing buildings. In areas where states' technical building regulations provide no specific rules, only simple standards would be required, the ministries explained.
The initiative represents another federal government effort to quickly create affordable housing amid Germany's ongoing construction crisis. While building permits increased by almost 60 percent to 24,400 units in September compared to the previous year, the September 2024 figure represented the lowest monthly value since January 2012. Last year saw the construction of 251,900 new apartments, with industry estimates predicting further decline this year.
The Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) estimates the need for new construction at around 320,000 apartments annually. Housing demand exceeds supply particularly in cities, with regular analyses of rental offers showing consistent slight increases. Data analysts at Bulwiengesa project that new construction rents in Germany's largest cities will continue rising, potentially reaching an average of more than 21 euros per square meter by 2029.
Construction costs also depend heavily on municipal requirements, which often demand expensive additions like daycare centers or specific numbers of parking spaces for neighborhood developments. Minister Hubertz has already launched the 'Bauturbo' (construction turbo) initiative and is supporting social housing construction with more than 23 billion euros through 2029. The government has also extended rent control measures, with additional legislation addressing indexed rent, furnished housing, and short-term rentals expected this year.
Justice Minister Hubig described Building Type E as 'a bit like a construction price brake and construction turbo in one.' She noted that Germany currently builds almost always according to gold standards, when good and safe housing can often be achieved more affordably. The Building Type E contract aims to open a practical path to forgoing high building standards when all contracting parties agree.
The construction industry has praised the initiative with reservations. Felix Pakleppa, Managing Director of the Central Association of German Construction Industry, said Building Type E could become an effective instrument for making construction affordable again, provided it's implemented consistently. He emphasized the need for freedom to build cost-effectively and innovatively without getting lost in sometimes over-ambitious standards.
The Main Association of the German Construction Industry called it an important step but noted a drawback: these important changes are only possible within a specific contract model, not generally for simple construction. Managing Director Tim-Oliver Müller warned against creating an unjustified stigma for a particular building class. Michael Halstenberg, a lawyer for the Federal Association of Independent Real Estate and Housing Companies, praised the framework as progress while noting that relief measures are tied to introducing a new contract type.
The framework will undergo extensive consultation with states and business associations. Minister Hubig stated the goal is to approve a draft law in cabinet by the end of 2026, which would then require parliamentary deliberation and approval. Details regarding the scope of application and terminology still need clarification as the initiative moves forward through Germany's legislative process.
