This article was the Topic of the Week in the newsletter of KW 29 in 2025.

On June 18, the federal cabinet adopted the government's draft of the "Law to Accelerate Housing Construction and Secure Living Space". The aim is – as the name suggests – to advance housing construction more quickly and create living spaces. This is also an important issue for companies, as adequate housing is a central factor for attracting skilled labor. At the same time, the IHK organization fears that the planned regulations could place an enormous burden on industrial and commercial enterprises. Without sufficient commercial space, economic dynamics will fail – but this is exactly what Germany needs now to return to the urgently needed growth path.

Reforms instead of Privileging

The one-sided favoring of housing construction proposed in the draft law endangers the balance between living, working, and supplying on the one hand and the availability of commercial space on the other. This can promote urban sprawl and exacerbate infrastructure problems due to the lack of spatial planning control.

Instead of special regulations for housing construction, a comprehensive reform of building law is needed: Municipalities should be able to plan better, procedures must be simpler, and sustainable urban development should be promoted. Clear balancing criteria should be formulated to avoid usage conflicts. Moreover, noise protection regulations must be adjusted to allow harmonious coexistence between residential and commercial use. To build, investors primarily need clear, practical, and legally secure framework conditions.

Conflict-prone Living in Commercial Areas

If noise protection is relaxed, residential areas move closer to commercial enterprises – with the result that noise limits are exceeded, the character of the area changes, and businesses are subject to subsequent restrictions. To avoid such conflicts, the Technical Instructions for Noise Protection (TA-Lärm) should be made more flexible and the protection of existing businesses should be strengthened.

The planned amendment to the Building Code allows rooftop extensions in tight housing markets without changing development plans. This accelerates construction and enables urgently needed additional living space. However, the downside is that businesses could be displaced. Residential use increases the requirements for noise protection, which can restrict companies in their operations. In addition, property prices rise as a result. To prevent this, clear evaluation criteria, transparent procedures involving the economy, and preserving the character of the area are needed. Instead of permitting gradual changes in usage, municipalities should specifically adapt their development plans.

Also concerning is the planned special regulation allowing residential use in commercial and industrial areas: It creates little effective relief but endangers important commercial spaces and leads to usage conflicts. Residential use should only be permitted in mixed areas – with clear criteria such as minimum vacancy rates. Otherwise, businesses could be displaced and restricted by strict noise protection requirements.

Instead of individual permits, transparent procedures with mandatory involvement of the 79 German Chambers of Commerce and Industry (IHKs) and emission protection authorities should be implemented. As public interest representatives, the IHKs advocate for the interests of the economy in spatial planning procedures and ensure that companies have the necessary spaces to operate without hindrance and with planning security.

Conversion Protection Hampers Ownership Formation

Businesses also critically assess the planned extension of another special regulation for another five years until the end of 2030: This continues to allow states to make the conversion of rental apartments into owner-occupied apartments subject to approval in areas with tight housing markets. This conversion protection significantly complicates the acquisition of owner-occupied apartments. Especially in times when construction costs are high and completion rates of new buildings are low, existing apartments are an important alternative. However, the regulation hampers investments, prevents energy-efficient renovations, and keeps the homeownership rate low – and should therefore be abolished from the perspective of the commercial economy.