Energy efficient building
The federal government is threatened with a wave of lawsuits after the KfW funding freeze
New buildings in Mainz. Photo: Sebastian Gollnow/dpa
© dpa-infocom GmbH
Funding for energy-efficient renovation of buildings was stopped overnight in January – to the displeasure of many builders. Now some real estate associations want to fight back.
After the reduction in housing subsidies, a wave of lawsuits from cooperatives and other housing companies could roll towards the federal government.
On Tuesday, the Bavarian housing industry association VdW advised its 490 member companies to have claims for damages legally examined, as did the North German sister association VNW the day before. The reason is the “sunk costs” – companies have already spent millions planning new apartments that probably cannot be built without subsidies. The Federal Association of Free Real Estate and Housing Companies (BFW) is also examining legal action because of the funding freeze, as it announced on Tuesday.
Federal Economics Minister Robert Habeck (Greens) stopped subsidies for energy-efficient construction and renovation from the KfW development bank in January shortly before the end of the application period. After strong protests from the housing industry, the ministry announced that applications received before January 24 will still be processed. This meant that housing companies and building owners still had a week to submit applications on time, because the so-called EH55 program was originally supposed to expire on January 31st. EH55 means the buildings use only 55 percent of the energy of a standard home.
Orders fall by the wayside
According to the VdW, the funding stop brought forward by a week means that at least 535 apartments cannot be built in Bavaria. “The housing companies have planned for the long term and have already invested 9.4 million euros in these new construction projects,” said association director Hans Maier.
According to an association survey, the BFW reported applications for 8,000 residential units that were to be submitted by January 31st. The majority had already been registered with KfW. Most of these construction projects with a total investment sum of around 2 billion euros and 175 million euros in funding are now on the brink, it said. The BFW is examining all legal options. Companies that were in contact with KfW before January 24th about a specific application for funding and who had a personal confirmation number for the application wanted legal certainty.
In the VdW Bayern 490 mainly socially oriented housing companies are united, mostly cooperatives and municipal companies. The association also criticizes the uncertainty of two other funding programs. The KfW program EH 40 for particularly energy-efficient buildings should be continued, but capped at one billion euros. According to the VdW, around 3,000 apartments have been planned in this program in Bavaria so far. “It’s going to be a big lottery,” criticized association boss Maier. And the future of the program for energy-efficient building refurbishment is also open.