Building Plots Getting Scarce in Germany

In Germany’s cities, building land is becoming scarce despite the availability of free land. Experts and the housing industry therefore recommend converting more agricultural land and other areas into building land.

“In principle, there is enough land,” said Michael Voigtländer, real estate expert at the Cologne Institute of the German Economy (IW). “But the legal requirements, the ownership structure and also the resistance of the citizens often make it difficult to win the urgently needed building land.” The Bavarian Housing Association speaks of a “huge problem”.

Shortage with paradoxical consequences

In the past 20 years, many municipalities have converted preferably unused industrial and railway facilities, Bundeswehr sites or other fallow land into building land. But these reserves are now coming to an end. “There are not many industrial wastelands and old barracks left that are relatively easy to build on,” says Kroner.

And not even the densely populated Munich is fully developed: About 20 percent of the city’s territory is open space, mostly farmland and forests. And there is plenty of undeveloped land around the state capital. The lack of land available for development has a paradoxical consequence: Less is being built on the few available areas in the cities than would actually be possible. In many places the purchase of land has become so expensive that the construction of apartment buildings no longer pays off.

“High land prices often no longer allow freely financed new housing construction at affordable rents,” according to a study published in mid-September by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR).

Protest against new development areas

As an antidote, the Institute’s experts pleaded, among other things, for the creation of additional building land on the outskirts of large cities — a view widely held in expert circles: “It is therefore important to create new building laws, for example by rededicating arable land, pastures or old industrial sites,” says IW expert Voigtländer. But that is difficult. The situation is often made more difficult by resistance from residents to new development areas. “With every construction project, citizens immediately raise protests, protests, protests”, says Kroner. “The conversion of agricultural land into building land is something that many communities are reluctant to tackle because it also immediately provokes protests.” And as long as building land prices continue to rise, Kroner believes there is little motivation for private landowners to sell it.