Coalition agreement between the CDU and SPD

Following consultations between the CDU and SPD over the past few weeks, the coalition agreement between the two parties was presented in Berlin this week. The outcome of the negotiations provides positive impetus in some areas, but the potential for a decisive change of direction has not been fully exploited. For example, the agreement provides for the continuation of large parts of the Red-Red-Green government's construction policy program, which was characterized by excessive regulation and bureaucracy.
Yet a rethink of Berlin's housing and construction policy is particularly important at this point in time. The real estate industry is currently facing major challenges: geopolitical conflicts, massive upheavals in the energy and raw materials markets, rapidly rising interest rates on the capital and financing markets, and, last but not least, increased demands for sustainability in real estate projects in conjunction with regulatory uncertainties have led to increased volatility in the market. In order to successfully tackle the key tasks of the future—the climate-neutral transformation of the building stock, the development of sustainable and livable urban concepts, and the creation of sufficient living space and modern workspaces—constructive pragmatism beyond ideological trench warfare is required. At JAAS, we see the following points as key levers for advancing the urban design of a sustainable Berlin:

Market orientation:
When selecting suitable investment targets, both private and institutional investors are already anticipating new requirements for contemporary living and working spaces and basing their decisions on ESG criteria. Project developers and portfolio holders are also responding quickly to new impulses from society. Free market mechanisms are an efficient design tool, provided they operate within an intelligent framework that enables planning security while leaving room for innovation. Such a framework needs to be implemented in Berlin. One thing is certain: no one builds as efficiently as the private sector.
Continuing to favor state-owned housing companies through preemptive rights, etc., and expanding municipal purchase programs does not do justice to this. We also consider the consideration of a commercial rent index and the creation of a rent register to strengthen the rent cap to be market-damaging interventions that further weaken Berlin as an investment location. Expanding cooperation:
As developers and investors who create cost-efficient, modern living space and modernize Berlin's existing housing stock, private companies play a prominent role in the urban development of the capital. They should therefore be more closely involved in political decision-making processes as important partners in achieving housing construction goals.
Although the current coalition agreement provides for the further development of participation formats, it continues to focus primarily on user groups rather than on those responsible for the projects.

Reducing bureaucracy:
Lengthy approval processes must be accelerated. On the one hand, this can be achieved by streamlining fragmented regulations in favor of overarching objectives. On the other hand, bureaucratic processes must be consistently supported by digitalization and automation. The great advances in the field of artificial intelligence should be put to use as quickly as possible.
The planned introduction of binding administrative deadlines in the context of building permit procedures only makes sense if the underlying processes can be accelerated accordingly. The revision of the building code planned as part of the “Faster Construction Act” to reduce the complexity of building regulations is a positive step toward speed and efficiency. Openness to technology:
In order to make the implementation of sustainable new construction projects and renovations of existing buildings as simple and efficient as possible, the entire range of technologies available to us must be utilized. It should be left to those responsible for the project to decide which measures are the best option in each specific case, both from an ecological and economic perspective.

Acquisition of building land:
Building plots, suitable conversion sites, and existing sites are available in Berlin and only need to be activated. Simplifying the land allocation process, supported by a digital real estate and building register for potential residential space, would facilitate this. The rezoning and conversion of real estate must also be made easier.
The resumption of the debate on the development of the Tempelhofer Feld is an important signal that demonstrates the positive effects of building land development in conjunction with innovative usage concepts. We also welcome the coalition's goal of removing legal hurdles to the addition of stories to existing buildings and the conversion of attics. However, the expansion of environmental protection areas and the associated increase in approval requirements is a step in the wrong direction, as it slows down the necessary expansion and conversion of existing buildings and thus hinders the creation of living space.
Overall, as a project developer, real estate investor, and portfolio manager based in the capital, we see the black-red coalition as an opportunity to realize the vision of Berlin as the “city of the future.” To achieve this, however, the course already set out in the current coalition agreement between the CDU and SPD must be pursued even more consistently and expanded.