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Measures to reduce construction costs
Article Building & Housing
Reducing construction costs and securing the supply of skilled labour.
Recent and current measures to reduce construction costs
The Commission to Reduce Construction Costs took up work in the last legislative period and is continuing its work in the current legislative term. In the run-up to the housing summit on 21 September 2018, the implementation of the Commission’s recommendations was evaluated. This resulted in the measures to reduce construction costs adopted by the federal states and the local authorities at the housing summit. The focus is on measures which, from the perspective of the Federal Government, the federal states and local authorities, help reduce construction costs.
The Office for the Reduction of Construction Costs, which has been established at the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), supervises the measures. It also provides technical and organisational support to the bodies involved. The measures are also supervised and supported by the research initiative Zukunft Bau. All new reports, expert opinions and research projects related to the measures to reduce construction costs are published on the website of the Zukunft Bau innovation programme.
Developing and harmonising building regulations law
Workable and comprehensible state building regulations are key for affordable building.
The housing summit showed that the federal and state governments agree that a far-reaching harmonisation of the building regulations law in the 16 federal states is necessary, in particular with regard to affordable building and housing. The federal states have exclusive responsibility for building regulations law and will seek to harmonise these regulations as far as possible, based on the Model Building Regulation of the federal states, as announced by the Conference of German Building Ministers in February 2019. The stance of the federal states is to be welcomed.
In addition, at its meeting in February 2019 the Conference of German Building Ministers adopted a regulation on type approval, which will be included in the Model Building Regulation and seeks to foster the use of serial and modular construction and to accelerate construction processes in general.
Promoting serial and modular construction
Serial and modular construction is a swift, cost-effective and high-quality response to the growing need for affordable housing – a response identified by the Commission to Reduce Construction Costs. The housing summit of 21 September 2018 adopted the Joint Federal, State and Local Government Housing Strategy, confirming the aim of promoting serial and modular construction.
In the same year, the Federal Association of German Housing and Property Development Companies, with considerable support from the Federal Ministry of the Interior and Community, adopted the framework agreement for serial and modular construction of multi-storey housing. From the perspective of the construction industry, this has laid one of the major foundations for extending production capacities. Housing development firms are making use of the new opportunities: only a few months after conclusion of the agreement, an initial project has been finalised; further projects are at the planning stage. The Institute for Federal Real Estate (BImA), with the support of the Federal Ministry of the Interior and Community, has meanwhile joined the framework agreement and is now planning to build housing for federal civil servants using serial and modular construction.
The implementation of the framework agreement is accompanied by expert bodies and supported by active communication with housing companies, local authorities and the general public. In addition, the implementation is evaluated in the course of departmental research carried out on behalf of the Federal Ministry of the Interior, Building and Community, so that experience and findings can be applied to residential construction by federal or local housing companies.
Simplifying procedures using the opportunities afforded by digital technology
The construction process, from planning to the finished building, will be designed more efficiently, optimising costs.
The federal and state governments use the opportunities afforded by digital technology. Planning application processes are key to the swift provision of housing. Fully digital planning processes will save property developers time and money; the authorities processing these applications may be able to increase human resource efficiency. The Federal Government therefore aims to make the digital planning application process, which is one of the most important administration services, available online. This is part of implementing the Online Access Act (Onlinezugangsgesetz, OZG). The Federal Ministry of the Interior and Community, the federal states of Mecklenburg-Western Pomerania (lead authority), Bavaria and Baden-Württemberg, interested local authorities and the lead agency XPlanung/XBau in Hamburg are working with users in a digital transformation lab to lay the foundation for digital planning application processes. The findings will be made available to all federal states and local authorities free of charge.
Furthermore, in an effort to accelerate the provision of housing, the law governing the awarding of public construction contracts has been streamlined. Procedural rules have been made more flexible and value thresholds have been raised temporarily. The changes took effect on 1 March 2019.
Limiting follow-on costs of regulation and standardisation
Like statutory regulations, standards and norms can lead to follow-on costs in the construction industry,
This view is shared by the Commission to Reduce Construction Costs and the Alliance for Affordable Housing and Building. In the Working Party on Standards in the Construction Sector, they discussed with associations of product manufacturers, planners and representatives from the construction and housing industry the problems associated with standardisation and the connection of standardisation, norms and costs, and made a critical appraisal. To do so, they conducted basic research, analysed data on standardisation and drew up a system to identify follow-on costs, enabling those concerned to translate the result into a recommendation for action.
The governing CDU/CSU and SPD, in the coalition agreement “Shaping Germany’s Future”, decided to introduce the assessment of follow-on costs associated with new construction standards.
At the initiative of the Federal Ministry of the Interior and Community, the Temporary Group of Experts on Construction Standards has drawn up a concept for the establishment of a central independent body. The aim is to assess norms and standards for residential buildings as to their cost impact and cost-effectiveness and to advise the federal, state and local authorities. At the initiative of the Federal Ministry of the Interior, Building and Community, there will be a pilot phase designed to provide further information to be included in the ongoing drafting and consultation process in the run-up to establishing the body.
This approach is welcomed by the Conference of German Building Ministers. The Federal Government and federal states will thus actively pursue the inclusion of impact assessments in the work of the German Institute for Standardization (DIN), as described in the Standardisation Road Map for Construction.
Cost-effective building technology services
We will limit both the purchasing and operating costs of modern building technology.
The Federal Government, the federal states and local authorities will push ahead with developing cost-effective and reliable building technology systems in select pilot projects.
The Federal Government will support this work through research. To that end, the Federal Government will be updating the building regulations applicable to housing provided to federal employees.
Introducing appropriate commissioning and operational management and the right building technology and installations could help to reduce operating costs. The Federal Government will analyse the potential of such measures to optimise operations in pilot projects, and it will carry out further pilot projects and research in collaboration with associations in the real estate sector.
The goal is to reduce operating costs to ensure financial benefits for tenants.
Securing the supply of skilled labour and expanding construction capacity
To ensure that the additional investment incentives lead to more housing being built in the short term, it is important both to make sure that more land becomes available and to secure the availability of sufficient skilled workers and construction capacity.
In December 2018, the Federal Government adopted a cross-sector skilled worker strategy, a key component of which is the draft Skilled Immigration Act adopted by the Federal Cabinet in December 2018.
Quality vocational training is extremely important in the construction industry. The Federal Government will soon start to revise the Ordinance on Vocational Training in the Construction Industry in cooperation with the social partners in the construction sector (construction industry / building trade / Building Workers' Union). The lead authority here is the Federal Ministry for Economic Affairs and Energy. Broad-based basic training in the three main trades (building construction, finishing work, civil engineering) and the relevant specialist training courses ensure that qualifications meet the needs of the market and are future-proof. Digital transformation in the construction industry will play a major role here. These are key aspects when young people choose a dual vocational training course and thus for ensuring a sufficient supply of skilled workers in the construction industry.
According to the construction industry, it has considerably increased employment and vocational training in recent years and will continue to do so in the coming years.
