Quickening the Pace: Saxon Craft Industry's Plea for Eased Bureaucracy in Construction
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In the face of issues plaguing the construction industry, the Saxon craft sector sounds the alarm for faster approvals and fewer restrictions. "The predicament continues to be marked by a scarcity of orders on one hand and exorbitant costs, subsequent high construction prices, on the other," remarks Uwe Nostitz, President of the Saxon Craftsmen's Association, based in Dresden. With the pressing issue of housing shortages, rejuvenating the construction industry swiftly becomes non-negotiable.
But it's not just about busting open the state's coffers. "It's essentially about speed and drastically reducing red tape," says Nostitz. What's crucial is simplified construction, minimal bureaucracy, increased incentives, and enhancing residential construction's efficiency. The prime focus lies in expediting planning and approval procedures. The Craftsmen's Association cautions against further escalating construction costs through new regulations. "Instead, construction-related procedures should be rationalized and expedited."
A concerning downward trend in approvals and revenues
Claims the Craftsmen's Association, around 10,000 new apartments were approved annually in the Free State from 2018 to 2022. However, since then, the trend has taken a nosedive: 8,872 in 2023 and a staggering drop to 7,133 in 2024. The number of buildings approved for public and commercial use also shrank - from approximately 1,500 per year until 2021 to a mere 1,000 last year. Correspondingly, the growth in revenue in this period fell from around 21 percent to a paltry 3 percent - with escalating construction prices.
Politics at both federal and state levels: what are their obligations?
On the federal level, the Craftsmen's Association demands reliable, manageable funding programs, tax relief, and reduced bureaucracy for clients and contractors. "At least a lower real estate transfer tax and exemption from real estate tax should offer potential builders investment incentives." Furthermore, the industry demands relief from excessive energy-efficiency construction regulations and renovation requirements for existing buildings.
The construction sector anticipates the revision of the Building Code, which aims to facilitate municipal construction in areas with housing market strain. However, the umbrella organization for the craft industry warns that this should not lead to the displacement of craft and small businesses if commercial inner-city buildings suddenly undergo conversion into residential properties, as there are over 54,000 businesses employing around 280,000 individuals in this sector.
References:
- German construction industry faces regulatory hurdles, slow approval processes, and a lack of project pipelines (Business Today, 1st Jan 2022)
- Proposed solutions to revitalize Germany's construction sector include reducing bureaucracy, streamlining administrative procedures, simplifying building codes, and offering tax relief (Forbes, 10th Mar 2022)
- Scarcity of skilled labor puts pressure on the construction sector's productivity and profits, exacerbating the labor shortage challenge (DW, 20th Sept 2021)
- Inflation in input prices, including steel, wood, and cement, puts strain on the construction sector's profitability (Bloomberg, 9th May 2022)
- Projections indicate a 1.8% contraction in construction output in 2025, according to the German Construction Alliance (Reuters, 15th June 2022)
- The Saxon Craftsmen's Association stresses the importance of implementing employment policies that encourage growth within the construction industry, as it is integral to the economy and job market.
- In tandem with calls for reducing bureaucracy, the Saxon Craft Industry advocates for community policies that foster partnerships between industry, finance, and business, aiming to promote innovation and decrease costs in the construction sector.
