Thursday, May 17, 2018

Apartment Story

ARD (public TV, Channel One in Germany) did a short report this morning on statistical information coming out of the German government on construction of apartments in Germany.

It's a negative be honest.  For the first quarter of's roughly 1.7-percent fewer apartments being approved for construction (against 2017 first quarter numbers).

The national Federal Statistical Office put the number at 77,800 apartments approved for the first quarter.....with 1,300 permits issued.

Trying to explain it?

I would go with three basic reasons for the slow-down.

First, just about every construction company now complains over the regulation problems involved in getting permits, and the process....compared to twenty years ago....frustrates the motivated folks a good bit.  You are better off in dealing with the city government of 25,000, than the city government of 300,000 or more.

Second, most companies will hint that finding qualified construction manpower is now a problem.  You can interpret this in various ways.  Some are looking for the cheapest labor possible....meaning occasionally some illegal folks being on the site.  Some are suggesting that find qualified German electricians and plumbers are an issue now, and when you do find them....they've got a schedule and delays built into the process.  I noticed in Wiesbaden last year.....a project was underway, and they'd put some container apartments on the construction site, and had twenty-odd Romanians living there as the crew.

Third, city council groups are under some pressure to contain building expansions.  The public and neighborhood groups are capable of putting voting pressure into the 'game'.  If you go back thirty years ago.....unhindered growth was possible.  Today?  No....there's various environmental groups which make the process more complicated.

Where does this leave future apartment projects?  I think satellite towns (10 to 20 miles outside of urban areas) are the ones who will get more apartment projects.  This means some kind of mass transit growth will have to be part of the future planning process. 

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